(2 years, 6 months ago)
Grand CommitteeMy Lords, I remind noble Lords that I am a vice-president of the National Energy Action advisory board. I join others in extending thanks to the noble Lord, Lord Whitty, for this timely debate.
The rise in energy costs announced this morning and in the cost of living generally is now being described as a pending cost of living catastrophe. Unless the Government change course, even with this morning’s announcement, I fear that that is what it is likely to be. It most certainly is for those on low incomes, who face rising inflation, likely to be 7% in April, this massive hike in energy prices, rising taxation—not least national insurance, council tax and the freezing of thresholds—and rising interest rates, increased to 0.5% about two hours ago.
The StepChange Debt Charity has estimated that a third of households are now having difficulty meeting their bills and many of them are now borrowing to cover their basic needs. There is now a real risk of a national debt crisis. One partial solution is to restore the cut in universal credit—that seems essential—but there are others.
I hope that the Government will act on the need to reflect the true rise in the cost of living for those on low incomes. The CPI index does not reflect the rising cost of basic food products or the cutback in the value range of supermarket products. Perhaps the supermarkets might look at what they can do to keep prices down. There should be an index that does not include car costs or consumer goods, so I am glad that the ONS will be producing an inflation index based on tracking basic food prices. I hope that the Minister will confirm that the Government will want to use it.
We heard just now that the energy cap has been increased this morning by 54%. It is estimated that a quarter of UK households will be paying more than 10% of their budgets on energy in April, but many of the poorest households we will be paying much more than 10%. For that reason, it is welcome that the Government are introducing some further financial support. It is, however, inadequate. As the noble Lord, Lord Whitty, pointed out, it is only half the increase and other measures need to be taken to support people on low incomes. Loans are being used when it is estimated that gas prices are likely to stay twice as high as they have been until at least 2025.
The Government have a responsibility to help people on low incomes now, not to keep their costs high so that tax cuts can be delivered nearer the next election, which is rumoured to be the Government’s intention. I very much hope that the Minister will confirm that that is not the Government’s intention and that the people who need help now will be helped now.
The council tax discount at bands A to D is £150, but it will not be sufficient to meet the 54% increase in the energy price cap. I have concluded that we need a windfall tax on oil and gas companies. The announcement this morning of Shell’s enormous profits points to such a Robin Hood windfall tax being justified. As I understand it, Shell has announced $6.4 billion in profits over its fourth quarter. The priority must surely be to cut the heating bills of vulnerable and low-income households, perhaps by doubling the warm homes discount and expanding it to all those on universal credit. This should be funded through a one-off Robin Hood tax on the record profits of oil and gas producers and traders.
We know that the lowest-income households spend twice as much on food and housing as do better-off households, so the current crisis hits the poorer more than it does the better off. The national insurance rise should be abandoned. The public now see it as the equivalent of the cost of unused PPE and fraud in the business support system. Those two things are the same as the projected income from the national insurance rise and I think that the NI rise really cannot be justified now. The Government should use general taxation instead, as many commentators suggest.
Mention was made by the noble Lord, Lord Monks, of the Levelling Up White Paper, but you do not level up poorer parts of the country by increasing so substantially the amount of tax that people who live there have to pay. The noble Lord, Lord Howell of Guildford, reminded us of the need for back-up. We need that and more. We need to relaunch the green homes grant scheme, we need more local networks for renewable energy sources, we need greater investment again in insulation and we need much more research on how to store renewable energy. In the medium to longer term, those should be the Government’s priorities.
(2 years, 7 months ago)
Grand CommitteeMy Lords, I first remind the Committee that I am a vice-president of the Local Government Association—I do so because local authorities can have a substantial role as commercial landlords. I thank the Minister for his comprehensive introduction to the Bill and for his meeting yesterday with Peers who have an interest in the Bill to discuss its details. I like the opportunity afforded by this new system for debate; it is a most welcome change.
I welcome the Bill itself because it addresses the need to minimise bankruptcies of tenants and landlords. Many businesses have been kept afloat by reductions in their costs while closed during the pandemic, which have been important contributions by the Government to supporting those businesses. Many are viable businesses that simply need time to recover. However, as temporary protections for tenants are reduced, it is vital that the recovery of those businesses is not put in jeopardy by the actions of landlords. That said, landlords have not received £1 in every £6 that they should have over the last two years.
The Bill seems to balance the needs of landlords and tenants fairly. Binding arbitration clearly has very substantial support and seems the best way to proceed for businesses forced to close. A balance has been struck between the needs of landlords and the needs of tenants which should significantly reduce closures which are not in the interest of consumers or landlords. I am thinking here of the importance of the Bill to the retail sector and the high street, which needs all the support it can get. Empty shops just make the physical retail offer less attractive and will lead to even greater dependency on internet shopping.
I move to some specific questions on clauses that the Minister may be able to respond to today—if not, later in writing, if that helps. In Clause 2 there is mention of interest rates payable. My question relates to the levels of interest payable on unpaid rents and what controls the Government are planning, if any, on excessive rent charges. How are those to be prevented?
In Clause 9, there is a requirement to refer a dispute for arbitration within six months of the Bill passing—the Minister referred to this figure. Longer than six months may prove necessary, but I accept that the Government have built in a means of addressing that problem should it arise. In that context, does the Minister feel that there are enough arbitrators to meet the demand that is likely to be forthcoming? It is estimated that 7,500 businesses could need arbitration because there has been no resolution of the stand-off between the landlord and tenant directly. That is a large number; therefore, there is a question of capacity within the system as a whole.
On Clause 13, is the Minister satisfied that there are enough protections in place to ensure that an error is not made by an arbitrator on the viability of a business? I refer to alleged errors of judgment by arbitrators and whether they can be challenged by a tenant or whether they simply cannot be challenged at all, even with recourse to the law. I can foresee articles being printed in the press complaining about the actions of arbitrators where they are deemed to have made an unfair decision about the viability of a business. I recognise that these are difficult and sometimes complex issues, and there are issues of commercial confidentiality as well. Nevertheless, I would welcome the Minister’s assurance that in the defining of viability by an arbitrator, the rights of the tenant are protected.
Clause 14 requires rent debt to be paid within 24 months of a decision. I am not sure that that is long enough. It may be in most cases, but it may not be enough for a business which is viable but on the margins and which would benefit from a longer time period. How fixed is that 24 months in Clause 14?
I say in passing that I welcome Clause 27, which will enable the Secretary of State to apply the provisions of the Bill to business tenants forced to close by future coronavirus restrictions. It is wise that the Government are proposing to use the affirmative procedure. Clause 27 is very important.
I have two further issues, as I draw to a close. The first relates to case law, because there is going to be a great deal of new case law. The Minister referred to transparency in the operation of the Bill, and I welcome that intention. I am not quite clear how, with all the new case law that is established by all the binding arbitration, there will be a system in place to ensure that binding decision-making reflects that body of case law. Is it the Government’s assumption that there will not be any new case law? With 7,500 cases all being heard over a comparatively short period, how are we going to ensure that a decision made in one place by an arbitrator is actually similar to a decision made somewhere else by a different arbitrator?
These are imperfect systems—I fully understand that —but nevertheless I am not quite clear on the extent to which decisions and the reasons for them can be shared publicly for other arbitrators or the general public as a whole to see. I recognise that there are issues around commercial confidentiality, but are the Government satisfied that enough is going to be published about the reasons for decision for awards that are being made?
Can I just double-check the issue of fee levels with the Minister? This Bill is about businesses on the brink. Fee levels for binding arbitration will be important for a tenant. I hope that the Government have in place means of ensuring that fee levels will not be excessive.
The Minister has explained the context. The Government have taken a whole set of temporary measures to support businesses over the last two years, which I have welcomed, but the problems that we now face are, first, with the business rates system, worth £25 billion a year to the Treasury. It is expensive, and I read in the press that there is a stand-off between the Department for Levelling Up and the Treasury about whether retail premises on high streets in particular should, for a period at least, pay no business rates.
There is a huge problem then for local government, because income from business rates really matters. We do not have the right level of discussion about some of those big strategic issues, and I am not sure that it is something that can be dealt with by only one political party. That said, there is a business rate context; for many businesses on the brink, business rates really matter, but they are also facing rises in general inflation and rising energy costs. What this Bill does can actually help mitigate some of the cost pressures that viable businesses currently face.
I welcome this Bill, which is a huge step forward. The Government have protected themselves by enabling themselves, through the negative or affirmative procedure, to make changes to it—but I welcome it, and I commend what the Government are attempting to do.
(3 years, 4 months ago)
Grand CommitteeMy Lords, I declare that I am a vice-president of the Local Government Association. This very timely debate in the name of my noble friend Lord Teverson is about integration of policy-making in national and local government to achieve net-zero carbon emissions in the UK.
First, now the Government have resolved to reduce our carbon emissions even more quickly, the means of delivering their targets will require a genuine partnership between national and local government. Central government simply cannot run England out of a Whitehall which has so many silos. Effective delivery will require joined-up, local leadership and co-ordination.
Nevertheless, I welcome the Government’s announcement this week. It is the right thing to do, and it explains to some degree the absence of much detail in the Budget, which at the time seemed a missed opportunity to put a green recovery and a sustainable economy at the heart of post-Covid thinking. If the Government are serious about climate change, they need to produce a clear action plan for the next decade.
We need much more new investment in green industries. For that reason, I welcome the new infrastructure bank, with its commitment to climate action as a core investment priority, the requirement on the Bank of England to have the further aim of creating a sustainable economy aligned with the objective of net zero, and the proposals for green gilts and green savings bonds. Local councils in particular will welcome these. Some have already issued green bonds to local people to help increase solar installations and biodiversity improvements, so I hope we can build on that willingness to take practical action.
However, it is not always going to be easy, as the Government found out with the green homes grant scheme, about which we have heard a lot this afternoon. It was a disaster, to put it mildly. It was complex to understand, had to contend with a lack of trained workers to implement, which was not unexpected, and suffered from far too short a planned timeframe to deliver. Despite being announced last year to such a fanfare, it reached only 8% of its target, yet domestic homes contribute around a fifth of our carbon dioxide emissions. So what plans are there for its replacement, as we have too many homes that are poorly insulated? Will there be something else in its place? It would help in achieving our objectives and could remediate poor-quality housing, particularly in the private rented sector. There is also a huge opportunity for jobs generation, as the Government must realise, having promised 100,000 new jobs are recently as last September when the flagship scheme rolled out.
It has been claimed that a quarter of homes in the UK are in places with dangerous levels of pollution and that 8 million homes exceed at least one of the World Health Organization’s recommended limits for particulate matter or nitrogen dioxide. Too often, local residents do not know what the levels of pollution are near them. I suggest that councils need to publish much more data and need to have action plans to eliminate dangerous levels where those are found.
Three-quarters of local councils have now declared a climate emergency, and most are taking very seriously their responsibilities to reach carbon neutrality. That is to be commended. But in the year when our country hosts COP 26, we are in the strange position that not many local authorities have withdrawn their investments from fossil fuel companies. Many of those investments are in pension funds—and I declare at this point that I have a small pension from the Tyne & Wear Pension Fund.
Pension funds have a legal duty to maximise income. In 2015, there was a significant divestment campaign, but it was said that non-financial issues could be taken into account only if there was considered to be no financial disadvantage or material risk of financial disadvantage from doing so. In other words, income for the pension fund was the primary concern. But today, six years later, it seems to be the case that local authority pension funds can take into account broader issues in so far as those issues may become a greater risk to the income of the fund in future—so climate change and the direction of travel of policy are important considerations which may impact on the value of a pension fund. Thus, green investment funds can now be seen as safer investments than they were. That should be the direction of travel for local authorities. It needs discussion with the Government, but there should be a date agreed publicly for local authority disinvestment from fossil fuels.
In this context, I draw the Minister’s attention to a recent University of Oxford report which says that, as the world generally moves to cleaner energy, the cost of investing in renewable energy sources has dropped as they prove to be safer investments than previously thought. The Government have to lead thinking here; they must force the pace to make sure that public investment ties in with public policy objectives.
My noble friend Lady Randerson has said a great deal about public transport, but nevertheless I want to add something about it. I share her concerns about the budget cuts to Transport for the North—for example, in smart ticketing, which has been available in London for many years but is not available yet in the north of England. Currently, 10% of all journeys in the UK are made by rail but only 1.4% of emissions come from rail.
Secondly, the Government have announced plans for major investment in buses, as we have heard, which is welcome. However, they have just spent the last year telling passengers—understandably—to keep safe and avoid public transport, so people have either stayed at home or have gone by car. Now the Government must say the opposite as soon as they can, because compared to pre-pandemic levels, bus usage is now at only 55% of those levels, rail and tube usage is only at around 30%, but road traffic is back to 90% of pre-pandemic levels. This means that we could end up with a car-based recovery. If so, that would represent a massive failure of policy. Instead, green investment is essential in the transport fleet. For example, only 2% of the bus fleet is zero emission and there are 32,000 buses. My noble friend Lord Teverson talked about the need for a route map for net zero, and here is a good example of why one is necessary. What is the Government’s plan for greening our transport system over the next decade?
In conclusion, it is no longer enough to get other countries to plant trees to solve the climate crisis. As my noble friend said, we face an emergency and what counts in dealing with it is action. His proposal—supported by many others—for a Cabinet Minister for the climate emergency and, crucially, for a senior Minister in the Treasury, are both essential recommendations which should command broad support. If that happened, it would give local authorities a single route into Whitehall.
(3 years, 9 months ago)
Grand CommitteeMy Lords, I congratulate the noble Lord, Lord Darroch of Kew, on his excellent maiden speech and on his clear analysis of this trade agreement.
I am pleased that we are having this debate today and I say at the outset that this trade agreement with Japan is most welcome. I live in a region—the north-east of England—that has benefited significantly from Japanese investment in recent years and wants to go on doing so. The north-east has a long and valued history of trading with Japan, ever since the first official delegation from Japan came to the UK in 1862. The delegation visited two cities, London and Newcastle, to understand better the impact of the Industrial Revolution, where it met civic leaders, engineers and inventors. It was the start of a long and fruitful trading relationship over several decades.
Today, Japanese investment has generated many thousands of jobs in the north-east. Yet we still do not know what our trading relationship with the EU will be in just 36 days’ time. This matters profoundly. This trade agreement is good news in keeping tariffs down, but Japanese companies in the UK need markets to sell into without barriers to their trade. A week ago, in an interview with Reuters, Nissan’s chief operating officer said that its UK business would not be sustainable in the event of a Brexit that added major costs to its business model.
Many thousands of jobs are dependent on the Government securing a good EU trade deal. Is there going to be one? There are, as I said, just 36 days to go. The concerns of the North East England Chamber of Commerce, which we heard about earlier, are amply justified. This is the UK’s first trade agreement on a large scale and it is with our fourth largest trading partner outside the EU, with trade being worth £32 billion in 2019.
It is, however, unfortunate that Ministers were so tempted to engage in hyperbole by claiming that the agreement would increase UK-Japan trade by £15.2 billion over 15 years, somehow forgetting that the estimate of the growth in trade was actually based on the expected increases from before the introduction of the EU-Japan trade agreement two years ago when we were still EU members. Can the Minister confirm what the real increase is expected to be as a direct result of the negotiation of this agreement?
As we have heard, the agreement projects a growth in GDP of 0.07% over 15 years. It broadly replicates our existing agreement via the EU with Japan, with the addition of some important improvements in digital services and in the system of geographical indications. But today trade between the UK and the EU is 20 times bigger than that between the UK and Japan. This agreement will be of limited value if we cannot access EU markets as we do now.
As we have also heard, the EU will remain so much bigger a market for the UK for the foreseeable future, even allowing for possible further access to Pacific markets. Some 50% of UK trade is with the EU, compared with 2% with Japan; that is, £672 billion with the EU, compared with £32 billion with Japan. These are important figures for us to remember as we seek to develop our trading relations with Japan, which we can and must. But to do so requires continued access to EU markets, as we have it now and as so many speakers today have emphasised.
(3 years, 10 months ago)
Lords ChamberThe Government have worked closely with retailers throughout the pandemic and we continue to do so. Retailers were instrumental in the development of the Covid-secure guidance and we have invested a great deal to ensure that their premises are Covid secure. I welcome the British Retail Consortium’s campaign to encourage consumers to “Shop early, start wrapping, enjoy Christmas”.
My Lords, I remind the House of my registered interests. Footfall in high streets is down by well over a third compared to a year ago and despite business rates retail reliefs, the collection of business rates overall this financial year is still forecast to be down by more than £1.5 billion. Do the Government have a plan to meet this deficit without penalising the high street?
As I set out earlier, we will be announcing a review of the business rates system shortly but we have a number of other elements in place, which I outlined in answering the first questioner, to support the high street during this difficult time.
(3 years, 10 months ago)
Lords ChamberMy Lords, the Bill will represent a further stage in the eventual break-up of the United Kingdom should it proceed unamended. It centralises power away from the devolved Administrations, gives excessive powers to Ministers, and undermines the rule of law.
In the Minister’s opening address, in which he justified the Bill, he said that the Government wanted a coherent internal market in the UK, with control of subsidies and fair competition. This approach sits oddly with this Government’s negotiating position with the EU, where we are leaving a coherent internal market seemingly to do the opposite with regard to subsidies and fair competition, and, in the process, to override the devolution settlement.
The Minister referred to a huge transfer of powers from the EU to the devolved nations following Brexit. He neglected to say that under this Bill the devolved nations would lose some crucial powers. It is little surprise that the devolved nations have reacted as they have.
In the face of the coronavirus pandemic it has been beneficial to have the devolved Administrations devising and piloting different approaches. We need to encourage new thinking that tests potential solutions, not stifle it on the basis that Whitehall knows best. As an example, the Welsh Government are proposing a ban on the sale of nine single-use plastic products, while the UK Government are proposing to ban only three. This Bill would mean that in Wales the six other products could still be sold, because they have been made in England, Scotland or Northern Ireland. We would therefore have lower environmental standards—levelling down, not up.
The Bill should include derogations that limit the primacy of mutual recognition for matters of environmental protection. In 2011, Wales led the way in introducing a charge on plastic carrier bags. It worked so well that the other parts of the UK followed, and the outcome today is a higher standard of environmental protection for us all. Public health is another area where devolved powers really matter, because they can help to effect positive changes more quickly than centralised structures. We have seen devolved Administrations give the rest of the UK a sense of direction with policies that improve public health. One example is Scotland’s minimum unit pricing for alcohol, as the noble Lord, Lord Faulkner of Worcester, has mentioned. There are other examples. As it stands, however, the Bill could lead to poorer public health outcomes in one country because of the right of market access from others.
There is a solution: the Government could set out a general public health exception to the mutual recognition principle, along with the necessary derogations on matters of environmental protection. However, as the noble Baroness, Lady Finlay of Llandaff, pointed out, these are matters, first, for common frameworks. Market access principles should be considered only when discussions on common frameworks have failed. Even then, the power to introduce derogations would remain essential.
(3 years, 11 months ago)
Lords ChamberI thank the noble Baroness for that question. In relation to Cornish pasties, I have unwittingly watched television programmes from time to time that show the extraordinary variety of food that they eat in Japan. I am sure that against that background the Cornish pasty would be more than welcomed by Japanese consumers. In terms of the impact of this agreement, compared with the EU agreement, I ask her to await the publication of the agreement and of the report that we will produce setting out the differences in detail.
My Lords, the agreement is welcome but, a few days ago, British and European motor manufacturers warned of £100 billion in losses over the next five years if there is no trade deal with the EU. That is on top of an estimated €100 billion cost from the Covid pandemic. Does the Minister understand the implications for our motor industry and for Japanese companies if there is no deal with the EU, and the consequent danger to British jobs that inevitably would follow?
(3 years, 11 months ago)
Grand CommitteeMy Lords, I was not a member of the Science and Technology Committee, but I read the report and the Government’s reply with great interest.
My first concern relates to the availability of public money for research. Cross-subsidising research budgets by individual universities could never be a long-term solution to pressure on those budgets. There is now, at least in theory, a welcome commitment by the Government to increase research funding to 2.4% of GDP by 2027. The problem is that if GDP declines, so does research funding. This is unwise, because if the economy is stalling, investment in research becomes increasingly important to drive future growth. The GDP figure to be used for 2027 should be the 2019-20 GDP figure—before the coronavirus pandemic began—plus annual inflation. That seems a reasonable way of approaching the problem and it would give universities greater clarity on future funding streams.
This takes me to Horizon funding. A no-deal Brexit will imperil our leadership status in global research because we will not be part of Horizon Europe, worth £85 billion in 2021-2027. I cannot understand why the Government have failed to show clearer leadership on this vital issue. Associate status is a weak position to be in, and to secure awards will require us to contribute to the pool anyway. We should note that in Horizon 2020’s proof of concept awards, UK applicants secured 13 awards, the largest number of grants. In the current Horizon round, the UK has secured a fifth of the awards.
This is clearly of enormous benefit to our spending on research, the research status of our universities and the geographical areas that they are in. The Government rightly are committed to a levelling-up agenda across the whole country. Many universities play a central role in their local and regional economies, notably in jobs, research and investment. The Government’s industrial strategy talked of the importance of place and it is important to remember that this relates directly to the levelling-up agenda. I do not argue that research money should be spread thinly, because investment must relate to specific sectors and to excellence, but it is the job of a Government to lead research capacity building across the whole country.
Last week, the annual world rankings of universities were published in Times Higher Education. They showed a drop in the positions of some UK universities. The comparative improvement of some non-UK universities is an obvious reason, but we should not underestimate the importance of investing to maintain our world rankings.
In the early summer, London Economics reported that the five north-east universities could lose £118 million as a result of a predicted downturn in student numbers, both domestic and overseas, caused by coronavirus. Things may yet turn out a bit less severe, but the importance of the local income generated from students should not be underestimated, and nor should Horizon income, which in my own city of Newcastle-upon-Tyne alone has generated some £90 million over the past seven years.
I look forward to hearing the Government’s proposals for solving the problems that the committee has so clearly identified.
(3 years, 11 months ago)
Lords ChamberMy Lords, I welcome both maiden speeches this afternoon. I understand the need for the Bill to ensure the proper functioning of the Government’s procurement, to enable the rollover of EU trade agreements and to allow HMRC to have access to detailed trade data. I understand too the reasons for the new Trade Remedies Authority to advise on the conduct of international disputes and unfair trading. However, the Bill cannot just be technical. What is in the Bill and what is missing from it will be highly relevant to our consideration as it progresses. This should include food standards for imported agricultural goods and the exclusion of publicly funded health and care services from trade agreements. It should also include issues related to climate change and regulatory co-operation, and ethical considerations related to third countries.
I hope the Minister will clarify three specific issues. First, our Parliament should surely have the power to agree the Government’s negotiating objectives in any new trade agreement. It should also have the same statutory powers as exist in many other countries to scrutinise and ratify a finalised agreement. Secondly, there is also a need for better scrutiny of the Trade Remedies Authority. There seems to be a lack of accountability to Parliament in its structure and functions. At the very least, it should report annually to Parliament. Thirdly, could the Minister explain, in the context of the Agreement on Government Procurement, how it fits with the Government’s plans to enhance state aid within the UK and for the Government’s levelling up agenda, which will require very substantial public investment? What consideration have the Government given to areas of potential conflict in procurement?
Finally, do the Government accept the need to honour geographical indicators in future trade agreements? I ask because, in their agreement with the EU, the Government have rightly committed themselves to them “unless and until” there is a new trade agreement in place. But, if there is no trade agreement with the EU, we must continue to honour geographical indicators, which, in itself, is good news. But what discussions have there been with US negotiators on this matter, since it appears that they do not wish to be bound by them? Will we continue to honour our current agreements on geographical indicators, or will the Government give priority to securing a US trade agreement?
(4 years, 1 month ago)
Lords ChamberThe noble Lord is right to highlight the difficulties that many retailers are facing. There has been a big shift to online retailing as well—of course, many high street retailers do both—but we need to keep these matters under review. The high street is vital to many local communities, so we want to offer them as much support as possible.
My Lords, does the Minister agree that a high street business rates system based on open market rental value is no longer fit for purpose? When will the new system be introduced? Will it be in the next financial year, because it is urgently needed?
The terms of reference for the review were published on 11 March in the Budget. On 28 April, the Treasury set out the timelines for the tax policy consultations in the light of the crisis, and the call for evidence for this fundamental review will be published in the coming months.