Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2022

Lord Shipley Excerpts

Tuesday 8th February 2022 Grand Committee

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

My Lords, these regulations make changes to the way in which we calculate levy and safety net payments as part of the business rates retention scheme. The changes are necessary to ensure that the calculations reflect the current circumstances of local government and that individual authorities receive or pay no more or less than they should.

Under the business rates retention scheme, authorities that see their business rates income fall significantly in any year can receive a safety net payment. The cost of the safety net is paid for by recovering, through a levy on growth, a percentage of the business rates income of authorities that, in any year, have seen their business rates income significantly increase. The detailed rules about the calculation of levy and safety net payments are set out in the Non-Domestic Rating (Levy and Safety Net) Regulations 2013.

The regulations before the Committee make a number of changes to the 2013 regulations. They do four things. First, they update the 2013 regulations for 100% retention authorities. The Committee will recall that, since 2017-18, the Greater Manchester, Liverpool City Region, West of England, West Midlands and Cornwall authorities have retained not 50% but 100% of the business rates they collect. As a result, we made changes to the levy and safety net calculations to reflect authorities’ higher business rates income. These changes have been reconfirmed periodically in regulations as and when the Government have extended the 100% arrangements.

As things currently stand, the changes to levy and safety net calculations for 100% retention authorities apply in every year up to and including 2020-21. However, because the Government have now confirmed that the 100% arrangements will stay in place in 2021-22 and 2022-23, we need to extend the timeframe over which the changes to levy and safety net calculations apply. This is provided for in regulations.

Secondly, in Regulation 6 we amend the levy rate of the Greater Manchester authorities. Until recently, the Greater Manchester authorities were part of a pool with an authority that was not involved in the 100% arrangements, so the levy rate was calculated for the pool as a whole. The pool arrangements finished at the end of 2021. From 2021-22 onwards, therefore, these regulations will ensure that the levy rate that applies to the Greater Manchester authorities will be zero, bringing it into line with the levy rate in other 100% retention authorities.

Thirdly, the regulations make a number of changes to deal with the consequences of local government restructuring. When the structure of local government changes, some of the values in the levy and safety net calculations need to change so that they reflect the business rates bases and revenue needs of the new authorities. For the current year, 2021-22, amendments are needed in respect of the newly created authorities of North Northamptonshire and West Northamptonshire, and for the creation of the Hampshire and Isle of Wight Fire and Rescue Authority. These changes are made in Regulations 3, 5, 6, 7 and 8, with the updated figures set out in new Schedule 6.

Lastly, the regulations make changes to reflect the exceptional financial support that was made available to authorities in 2020-21 and 2021-22 following Covid. Noble Lords will recall that, in response to Covid, the Government exceptionally waived the business rates bills of the occupiers of eligible retail, hospitality and leisure properties and of eligible childcare providers, thereby helping those ratepayers to cope with the financial impact of the lockdowns and restrictions that were put in place to tackle the pandemic. Ratepayers’ bills were reduced by over £11 billion in 2020-21.

We have continued to provide support to retail, hospitality and leisure businesses and childcare providers, with an estimated £5.8 billion of relief to be given this financial year. Furthermore, we have recognised the strain on other businesses and have announced an extra £1.5 billion of Covid additional relief funding, to be allocated by local authorities in line with the needs in their local areas.

Of course, this unprecedented reduction in bills, although welcome to ratepayers, has deprived local authorities of a commensurate amount of business rates income. To support the delivery of local services, the Government have therefore compensated local authorities for every pound of business rates income that they have lost as a result of awarding additional reliefs to ratepayers. The compensation, via a grant from central government under Section 31 of the Local Government Act, has been paid up front to authorities to ensure that they had the cash they needed to deliver local services in 2020-21 and 2021-22. The further support, in the form of the £1.5 billion of Covid additional relief fund, will be paid to authorities as soon as possible.

If we did nothing to the 2013 levy and safety net regulations, the loss of income caused by the reduction of ratepayers’ bills and the additional reliefs awarded by authorities would mean that in some cases authorities would receive substantial safety net payments, even though they have already been compensated by means of a Section 31 grant. Therefore, in Regulation 7 we make changes to the 2020-21 and 2021-22 levy and safety net calculations to strip out the impact of income reductions that have been, or will be, compensated via a Section 31 grant. This means that those authorities will not be compensated twice for the same loss of income.

As well as compensating authorities pound for pound for the estimated £18.5 billion of support that we are providing to ratepayers over two years, we have taken further steps to help authorities through a tax income guarantee. Under that guarantee we are providing additional compensation to authorities for losses of business rates or council tax income in 2020-21. For business rates losses over and above those resulting from the reduction in ratepayers’ bills, authorities are being compensated for 75% of the additional loss. But, of course, in the same way as for the Section 31 grants paid to major precepting authorities, we need to change the regulations in 2020-21 to ensure that authorities are not compensated twice for the same loss of income. Regulation 8 and new Schedule 1B change the basis of the calculation of levy and safety net payments to ensure that losses of business rates income do not generate safety net payments if the authority is receiving support through the tax income guarantee.

In conclusion, these regulations make a series of very technical changes to the calculation of levy and safety net payments to ensure that they reflect current circumstances and that authorities will pay or receive the correct levy and safety net payments. I commend them to the Committee.

[Lord Shipley (LD)]

My Lords, I should first remind the Committee that I am a vice-president of the Local Government Association.

In the House of Commons, these amended regulations took just 15 minutes to be explained and approved, and that seems to be because they are appropriate in the circumstances. The revised levy rate for Greater Manchester looks right, since the pool arrangements, as the Minister said, have ceased. It is also right that the restructuring of a few local authorities has been reflected in new, updated figures.

We should support financial relief from business rates for businesses impacted by Covid being fully compensated to local authorities, in line with previous decisions earlier in the pandemic. It is, however, clearly important that the businesses rates retention scheme works as it was intended to. I think it would be wrong to give safety-net payments to some local authorities when they are already compensated by the Government directly, and the proposals on proxy figures for the limited number of 100%-retention authorities seems appropriate.

All the amendments in this statutory instrument today are technical and sensible. But the context is one of a system of business rates that is no longer fit for purpose. It does, however, generate a huge amount of income. I am left wondering what the Government are now thinking about the future of business rates—so anything the Minister can tell us on that would be most welcome.

Finally, I read the comments of the Secondary Legislation Scrutiny Committee published on 3 February, and I think the committee was right to raise the issue of whether the public are adequately protected against fraud, given public concern about false claims in other areas of Covid support payments. This is, of course, a relief scheme, and relief schemes are part of normal local authority systems and subject to normal audit systems. However, the Minister might wish to confirm that the Government feel adequately protected, given that it is their money that is helping to fund the cost.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for his introduction to this instrument, which, as we have heard, makes various changes to the business rates retention scheme. As we also heard from the Minister, each change is very technical, including amendments to levy and safety-net payments, the restructuring of certain local government areas and the payment by central government of specific grants to local authorities. I will not cover any of the technical detail: the noble Lord, Lord Shipley, amply covered that and asked the questions in these areas that needed to be asked of the Minister, so I will not repeat them.

I will briefly say that Labour supports these changes. However, in the other place when the matter was discussed, some important points were raised about business rates and our high streets. The Minister may remember that yesterday, in the Statement on levelling up, I talked of the need to completely reform and replace the current system of business rates. I appreciate that the terms of the SI before us today are very narrow and that this is not the place to debate that, but I ask the Minister to take our concerns about the current system back to his department. The Government have spoken already about the need to reform the business rates system and have conducted a review, but we have seen little progress to date beyond narrow technical legislation such as that before us today. I encourage the Minister to give his department a nudge. Having said that, we are very happy to support the regulations.

[Lord Greenhalgh (Con)]

My Lords, I thank the noble Baroness, Lady Hayman, and the noble Lord, Lord Shipley, for their contributions. I thank them both for raising similar issues. While this is a very narrow statutory instrument, it is probably worth saying, thinking about the future business rates is very much a matter for the Treasury. There is a recognition that future business rates need to be thought through. Obviously, there is a review and, self-evidently, there needs to be reform.

Equally, there is the issue alluded to by the noble Lord, Lord Shipley, on what we do about local government in the context of the income for local authorities being council tax and business rates, and business rates fundamentally needing to change to reflect the changing dynamics of our high streets. There is an intellectual debate that can be had about whether we continue to resource equalise, or whether we think about life as a race, whereby we ensure the start line is level and fair and then you get places essentially to compete and, through competition, raise the game. That is an intellectual debate that is entirely proper, not for this statutory instrument, but it one that I like engaging in with people who have a very deep knowledge of local government and care about its future. It is really hard to be fair if you have officials working formulae that only they seem to understand to determine whether a place gets x money or y money. It is job of work that, necessarily, the Secretary of State will be looking at—it is far above my pay grade—but I have been a huge advocate of ensuring that local authorities can be set free to be able to determine their own destinies, rather than being necessarily being always funded from the centre, in the relationship we have today. That is how it has always been, for over 20 years, in my time in local government—but that is not really a matter for today’s debate. I am sure that we will have many debates about this in the Chamber over the coming years.

I have something else on this as well. Local authorities are responsible for the administration of release and provide us with assurance on the use of release. These are not grants but reflect a discount on the liability of a business. Local authorities can take action against any relief that is fraudulent. Does that help the noble Lord, Lord Shipley?

[Lord Shipley (LD)]

My Lords, that is what it says in the Explanatory Notes. This issue is whether everybody is auditing it very carefully. That was my question really.

[Lord Greenhalgh (Con)]

Clearly, we need to ensure there are proper controls in place, both at the local authority level and the Government need to look at it as well. I think that is very wise advice, and we will take that away from this debate.

In conclusion, these regulations are necessary to ensure that the rates retention scheme continues to operate as was intended and that authorities receive the safety-net payments to which they are entitled or make the levy payments due from them. Without these regulations, the amounts paid or received by authorities will be wrong and will impose additional costs on local government as a whole. The regulations ensure that this does not happen, and I hope the Committee will join with me in supporting them.

Building Safety Bill

Lord Shipley Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Shipley (LD)]

My Lords, I agree very strongly with what the noble Lord, Lord Young of Cookham, said. First, I remind the House that I am a vice-president of the Local Government Association. I welcome the Bill strongly. I think I will be happier if it includes, in addition to residential buildings over 18 metres, all high-risk buildings, and I hope we will take that further in Committee.

The disaster at Grenfell represents one of the biggest failures of public policy in recent decades. The report of Dame Judith Hackitt in May 2018 said that the current system was not fit for purpose, so it is vital that this new system works. This Bill represents a fundamental reform of the building safety system. It may have taken four years to get to this point—which is a long time—but it seems to me that it is four years well spent. Of course, even the best systems for securing safety will depend on the people who carry out the new processes. I will say something more about that in a moment.

But first, I want to approach the Bill from the perspective of a new occupant of a high-rise residential block. I would want to feel confident that I knew the following before I moved in: is there more than one lift and more than one staircase? Are there secure emergency exits? What are the evacuation rules? Have they been tested and does everyone know what they are—or do we stay put in a fire? Are there high-quality fire doors in common areas that are kept closed, and high-quality fire doors as part of my own property, such as my front door? Are there sprinklers—and if not, why not? Have the building materials been tested properly and are they safe? Who is responsible for safety? Is there a named person monitoring my block to whom I can go with concerns? Are there regular residents’ meetings to raise issues of concern? Are the results of fire safety inspections public for residents to read? Is it clear what I have to do myself to maintain safety, and what penalties might there be for non-participation? Are there regular electrical safety checks, and who undertakes and registers these?

We will explore many of these issues in Committee, and some, of course, lie in the Fire Safety Act 2021. But the success of this Bill will all depend on the people carrying it out: their training, competence and understanding of their role, and the golden thread of information held in one place, which is a such an important part of the procedures in the Bill. In the end, of course, it is everybody’s responsibility to make sure that Grenfell can never happen again.

As the Minister said in his letter of 20 January, this is a complex and technical Bill. Importantly, there are a lot of new roles in it, and they all seem to be necessary. There are responsible persons, accountable persons, principal accountable persons, duty-holders, clients—who will have to approve the competence of the principal designer and the principal contractor—other designers and contractors, building safety managers, registered building inspectors, building owners, insurers, and the new homes ombudsman. And there will be others, not least the national regulator for construction projects. It will be vital that everybody knows who is responsible for what exactly, and that there is a regular review of them undertaken through the building safety regulator and the Government.

The crucial role will be that of the new building safety regulator within the Health and Safety Executive, who will have the key role in bringing together the fire and rescue services and local authority experts, including the building control staff, to make regulatory decisions. It will be critical that the regulator drives ahead with improving competence within the sector and within the unified building control profession common to the public and private sectors. This system will work only if everyone working as part of it has the required set of knowledge and expertise.

Much will depend on the gateway structure—which I strongly welcome—so that the risks are evaluated at every stage of a new building’s design and construction. In particular, in terms of gateway 1, I would like to be clearer about what actions are being taken to improve training. It will matter because it relates in part to the planning system, both in terms of application and the permission itself. I submit that local government planning authorities will need to give some substantial thought to the training of councillors.

I wish the Bill well. It is really important and I commend all those involved in getting us to this position because it is a substantial achievement. I hope that the Minister may agree to some system of annual reporting to Parliament on the working of the new structure, that roles are clear and that the blame culture has been significantly reduced, if not eliminated. I hope he will give further thought, too, to how competence will be assessed and reported.

Perhaps I may raise one other issue, which relates to permitted development rights. Are the Government thinking of restricting those rights when office blocks are converted into residential flats of whatever height?

I hope it will not prove the case that too much is being left to secondary legislation. It would be helpful to see as much further information as can be brought forward in Committee and on Report as possible; otherwise there will be a great deal of work to do in assessing that secondary legislation. That said, I commend the Bill.

--- Later in debate ---

[Lord Shipley (LD)]

It was the 1970s.

[Lord Greenhalgh (Con)]

The 1970s, okay. One of the things it taught you was to really distil your arguments down and to learn things over time. The noble Lord specifically asked whether we could review this on an ongoing basis. I take that suggestion as a very sensible one. Any Government—this Government in particular—need to do things and then see whether they work, review and reflect, and try to take that on board. I do not know whether I have overstepped the mark as a Minister, but I think that is a very sensible suggestion.

We will ensure that we improve competence. One of the things we must recognise is that, to improve competence, which was raised by the noble Lord, Lord Shipley, you need to establish what competence is. That is one of the things we are doing very carefully; it is being done by officials and the shadow building safety regulator. You then have to find out how the accreditation will work, and I know that UKAS and others want to step forward and do that. That will all happen as a result of this Bill.

The noble Lord, Lord Aberdare, gave a really thoughtful speech on something that was new to me, so I appreciate his contribution on cash retention. The Government continue to work with industry on the future of retention payments in the construction industry. However, I am told that there is not a clear consensus as to what may replace the practice, so there is more work to be done. I thank the noble Lord for raising an important issue.

The noble and learned Lord, Lord Etherton, raised Part 5 and the duty on landlords, and asked whether we were going to cause litigation by setting unreasonable demands on landlords. He also came up with a solution. I really appreciate him raising that issue; leaseholders need as much protection as possible. We are requiring landlords to seek claims only where reasonable, but we note the noble and learned Lord’s suggestions for the guidance, and we will take them on board as we continue with the passage of the Bill.

The noble Baronesses, Lady Jolly and Lady Young of Old Scone, the noble Lord, Lord Jordan, and my noble friends Lady Eaton and Lord Naseby all mentioned the Safer Stairs campaign. As someone who has an elderly father—sadly, my mother did not survive the first wave of Covid—I worry. The thing I worry most about, as someone gets frailer, is staircases. I almost have to declare a personal interest. It is important that we look at staircase standards and recognise how best to achieve that end point, so that new builds have the right level of minimum standard. That does not mean it has to be enshrined as a maximum standard, but we have to work out what we would be proud of as a minimum standard in regulations. I thank noble Lords for raising this issue.

I think it is ironic that one of the sponsors of this campaign is Berkeley homes, because Richmond House, which someone mentioned, is of course a Berkeley build, as is Worcester Park, which really was a shoddy building, although luckily there was no loss of life there. Some developers who normally build good stuff have built things that they should be ashamed of. It is ironic that Berkeley is sponsoring what is a very noble campaign—none the less, I support it.

The noble Lord, Lord Foster, raised electrical safety. I am sure we will work through some of his suggestions—along with pretty much everything else he is interested in—in Committee. I have the briefing and I understand the issue; it is something that we have debated many times.

The noble Baroness, Lady Pinnock, raised building safety managers, and I have the note that was prepared by ARMA and IRPM on this. I hear the concerns about cost, and we take those concerns extremely seriously. There is not a one-size-fits-all approach, and if you are not prescribing how you do it, we do not see why you cannot have a property manager continue to discharge the functions of a building safety manager, going to the expertise only when it is needed. Think of the equivalent in healthcare: you typically go to a GP but see the specialist only when required. I have some sympathy with the issue, but I think that we are not being prescriptive about it, and so it should not be used as an excuse by managing agents to whack up the prices for leaseholders.

I welcome the clear cross-party support from so many noble Lords. There is broad support for the principles set out in a Statement by my right honourable friend the Secretary of State in the other place, on 10 January. We will continue to work with your Lordships —even the noble Lord, Lord Kennedy—and by working together we will ensure that homes are safe for future generations. It is a worthy ambition. I commend the Bill to the House.

Building Safety

Lord Shipley Excerpts

Tuesday 11th January 2022 Lords Chamber

[Lord Greenhalgh (Con)]

The noble Earl is right that this is a crisis of epic proportions that has affected hundreds of thousands of leaseholders and has been caused over many decades. I have probably visibly aged while holding this brief, because some of the stories from leaseholders are simply harrowing. That is one reason why I am delighted that the House collectively feels that we are making a big step in the right direction.

I also agree that we should challenge some of the practices that have led to this, such as value engineering, which is essentially a way of cutting corners and trying to inflate profits, often by compromising the integrity of the building. These practices simply must stop. Making the polluter pay and doing so at the individual building level is the way to ensure that the quality of the buildings in future will be far better than what we have seen in the past 30 years in this country.

[Lord Shipley (LD)]

My Lords, the Minister said that this may take time, but what assessment has been undertaken to unlock mortgages, which at the moment are a huge barrier to the sale of properties?

Council Tax: Second Homes

Lord Shipley Excerpts

Thursday 4th November 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, the Government support the sharing economy, but the noble Lord will be pleased to know that we recognise the concerns about the uneven regulatory requirements in it. In the Tourism Recovery Plan, published in June 2021, we committed to consult on the introduction of a tourist accommodation registration scheme in England.

[Lord Shipley (LD)]

My Lords, the Minister referred to a consultation, but does he accept that every residential property should pay council tax and parish precepts, whether it is a main home, a second home or a holiday let, as a contribution to local services?

[Lord Greenhalgh (Con)]

I point out that 96% of second homes pay council tax in full, even though they may use local services only on an occasional basis. We believe that, in the sharing economy, where people run businesses and meet the threshold, it is reasonable for them not to pay council tax and to be subject to the business rates regime. No local authority has lost out, because they are covered by various grants in the business rates retention scheme.

Leaseholders: Safety Remediation Costs

Lord Shipley Excerpts

Thursday 4th November 2021 Lords Chamber

[Lord Shipley (LD)]

My Lords, I agree with the right reverend Prelate the Bishop of London that those responsible for the cladding crisis should pay for the remediation. I found the proposal made by the noble Lord, Lord Young of Cookham, for an extra levy and a Treasury grant to be particularly convincing, and I hope it will command broad support in your Lordships’ House.

I congratulate my noble friend Lord Stunell on his wide-ranging and forensic examination of the key issues in relation to the cladding crisis, the need for fire and building safety remediation, and the desperate position of so many leaseholders who are being asked to pay large sums of money, when they were not responsible, for cladding on their properties having to be replaced or for other essential fire safety work. I subscribe to all that he has said.

But in my contribution today, I want to look at government housing policy more generally in the context of the second part of the Motion, which refers to the need for safe, green and affordable housing. When I say affordable, I mean housing that is affordable to those on average incomes, rather than housing that is priced at 80% of the market rate.

I look forward to hearing from the Minister when he replies. He has a new departmental title, of course, in that he represents the Department for Levelling Up, Housing and Communities. Very recently, the department was the Ministry for Housing, Communities and Local Government, and just before that it was the Department for Communities and Local Government. These constant name changes cannot disguise the failure of the Government to build enough homes. Low-paid workers have been priced out of buying a home in many parts of the country. Over recent years, property prices have risen well ahead of earnings, and the Government have been obsessed with encouraging demand to the detriment of increasing supply. Are the Government still committed to reaching 300,000 new homes a year by 2025? If so, how will they do that when a handful of developers control the timing of so much of our supply, which has led to their substantially higher profits? Do the Government have a plan?

On plans, what are the Government’s plans for the planning system? Over 40,000 responses were sent in as part of the recent consultation on the planning system. What is happening to all those replies? What lessons have the Government learned about subsidising demand through Help to Buy and stamp duty holidays? Both seem to have led to higher prices for buyers and higher profits for builders. Indeed, the stamp duty holiday has apparently cost just under £5 billion in lost revenue to the public purse.

As the noble Lord, Lord Barwell, who was Housing Minister from 2016 to 2017, wrote in a letter to the Times on 15 May this year:

“Demand-side interventions such as Help to Buy and stamp duty holidays, while helping some, fuel house price inflation, making it harder for others to get on the ladder.”


I agree with him, and I also agree with his later statement that we need more homes for rent which are affordable. What is the Government’s plan to meet the lengthening waiting lists for social housing, estimated by the Local Government Association—of which I am a vice-president—to be over 2 million households?

The affordability crisis has impacted on very many people. This has proved particularly acute recently in rural areas, where prices have risen by 14% over the year May 2020 to May 2021. I conclude that the Government need a clear strategy to deal with the shortage of homes. Again, I hope the Minister will confirm that there is to be no watering down of the commitment to 300,000 new homes a year.

The Budget announced some more investment in housing and specific funding for affordable homes on brownfield sites. That is all welcome. But what is the Government’s thinking on the need for more supported housing units? The National Housing Federation forecast earlier this year a shortfall of around 47,000 supported housing units by 2025. Why did the Chancellor refuse to proceed with an increase in the stamp duty surcharge for the purchase of second homes, as suggested by the Office for Budget Responsibility? It seems to have been seriously considered.

Are the Government still committed to ending rough sleeping by 2024, and is the plan for doing so sufficiently robust?

On greening our housing stock, is the sum of money announced in the Government’s Heat and Buildings Strategy sufficient to deliver all the changes needed for decarbonisation and retrofitting of buildings? Many experts claim that it is nothing like enough and that prices will not drop over the coming years as the Government hope they will.

I return to cladding. It was reported in the Times on Friday 29 October that Robert Jenrick, the then Secretary of State, had fought the Treasury for more money for two years to deal with the cladding crisis but that no extra funding was forthcoming. I do not know what Governments are for if they are not there to solve problems like this. A large number of leaseholders, through no fault of their own, have been landed with huge bills when owners and developers should be responsible. More than the £5 billion pledged so far will be needed, as the noble Lord, Lord Young, reminded us, so why are the Government raising developer contributions with only a 4% levy on company profits over £25 million and why is it seen as a contribution towards the £5 billion already announced as opposed to being an extra sum that would then generate £7 billion?

As all speakers have said today, the cladding crisis needs resolution.

Inequalities of Region and Place

Lord Shipley Excerpts

Thursday 14th October 2021 Lords Chamber

[Lord Shipley (LD)]

My Lords, I declare my interest as a vice-president of the Local Government Association. It is a pleasure to follow the right reverend Prelate the Bishop of Durham and I look forward very much to the maiden speech of the noble Viscount, Lord Stansgate. I am grateful to the noble Lord, Lord Liddle, for enabling this debate; I share his sentiments. We still await the Government’s plans for levelling up and devolution, and I hope we get an update about that from the Minister when he replies.

This Motion is about levelling up. That levelling up cannot come at the expense of London. The Government have raised expectations. They have created a term—levelling up—which now has the status of a title in the Department for Levelling Up, Housing & Communities. It is hard to understand what authority this new department has over other Whitehall departments. Do its powers extend to managing the spending policies of the Department for Transport, the Department for Business, Energy and Industrial Strategy, the Department for Digital, Culture, Media and Sport, or any other government department, including the Treasury? I doubt it.

You cannot level up places without levelling up people, and you cannot level up people by increasing taxes on the low paid, such as the increase in national insurance for health and social care, and in council tax—around 5% per year is now forecast for several years. Add those regressive tax increases to the rising energy costs and rising cost of living generally, and it is hard to see how levelling up can work if the incomes of so many people will be lower.

Paragraph 235 of the coronavirus report published earlier this week, on the lessons learned, says of test and trace that,

“in short, implementation was too centralised when it ought to have been more decentralised”.

You could say that about many policy areas managed by Whitehall. We cannot run England out of London. England’s population is 56 million. We must decentralise and devolve, but the Government insist on running a hub-and-spoke model based on Whitehall holding financial power. Far too many funds are complex, requiring a bidding process which is expensive for local government to manage when resources are so tight. Financial control needs to be decentralised because levelling up is not just about some Whitehall jobs being relocated in England. The ambition should be that at least 50% of public spending is controlled at a regional or more local level.

There has been reference to the National Infrastructure Commission report produced a few weeks ago. It says that, to deliver greater regional equality, the Government should give more control over funding to local areas to help their levelling up. Rightly, it criticised the Government’s policy of ring-fencing pots of money and demanding bidding and competition. It said that we should move instead to five-year devolved budgets so that local areas can develop their own infrastructures strategies.

The National Infrastructure Commission is right, but missing from the debate on levelling up is, first, the need for local government to have greater powers over sources of taxation; it cannot all be about government block grant. Secondly, the private sector has to be prepared to invest more in those areas needing greater investment, because it cannot all be done with public money. Private sector companies have social responsibilities to places and should not think simply in terms of shareholder returns. It might help too if the Government looked at some of the rules around the investment of pension funds, which could be an additional source of investment funding if more pension fund money could be accessed.

Finally, one trend could prove helpful to levelling up, and it is the consequence of the current dislocation of our supply lines. We should actively promote reshoring more production so that we make more, produce more and consume more sustainably, thereby in turn creating more jobs in areas that need greater support.

Levelling up requires a place-by-place plan, helping education, skills and new industries, but that will happen only if local places are empowered to lead it.

Council Tax

Lord Shipley Excerpts

Thursday 22nd July 2021 Lords Chamber

[Lord Greenhalgh (Con)]

Yes, it does. On that basis, grant enables areas with lower council tax bases to receive 16% more in core spending power.

I recognise the point made by the noble Lord about the disparity in valuations between the north and the south, but it is a system that works well to develop the funding that councils need at the moment.

[Lord Shipley (LD) [V]]

My Lords, I refer the House to my registered interests. What consideration will the Government give to the potential benefit of a proportional property tax, as recommended by the Housing, Communities and Local Government Committee to replace council tax and business rates in its report published earlier this week?

[Lord Greenhalgh (Con)]

My Lords, we have looked at putting on hold the reform of the local government finance system because of the pandemic, and further reforms will be potentially be brought forward as a result of the spending review. I note the idea that the noble Lord raises.

Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2021

Lord Shipley Excerpts

Thursday 8th July 2021 Grand Committee

[Lord Shipley (LD) [V]]

My Lords, I remind the Committee that I am a vice-president of the Local Government Association. I want to thank the Minister for his introduction to this statutory instrument. It is right to extend the pavement licensing system for a further year. We have learned a lot from it in the past year, which can help to inform future policy. The public have become used to the system and in the main appreciate it.

In our debate on this topic a year ago, of which mention has been made, I recall speaking about access issues and related matters, some of which seem to have been resolved and others not so effectively.

I recall also saying that sometimes I preferred conditions to be imposed by Governments rather than guidance when change is needed. One such matter may prove to be that raised by the noble Lord, Lord Faulkner of Worcester, and a number of other speakers, whose concerns I want to support. Smoke-free pavements are in the public interest, and I believe that the vast majority of the public do not want to sit on a seat in an extended restaurant or pub while suffering the disbenefits of second-hand smoke. I found the arguments of the noble Lord, Lord Faulkner, compelling and I hope we will hear more about them next week.

We have had a year’s experience of the regulation. We know that businesses have been helped and that people have had the benefit of more outdoor seating. It has added to a sense of community and neighbourliness in our towns and cities. There has been one other benefit that I have become aware of: it has reduced pollution, because extending pavement seating has encouraged some councils to move traffic further away through traffic calming measures. I welcome that.

A year ago, I recall the Minister, the noble Earl, Lord Howe, reminding us of the existing powers of councils on access, smoking and a range of other issues. Indeed, it is always better for councils to take responsibility locally rather than to expect the Government to decide everything for them. Sometimes, however, the Government have to take action and responsibility, and preventing second-hand smoke seems to be one of those occasions.

I want to make a suggestion to the Minister. His department has a year’s experience now. I hope that it is not planning to roll over these regulations for a third time in September 2022. Rather, we should build on current knowledge with a reformed but permanent pavement licensing system that builds on the achievements of the past year and addresses the problems that have arisen. There are permanent solutions that can be found but to achieve them means bringing together all the relevant parties to devise an agreed way forward on the pavement licensing system. That includes a solution to all the problems that have been identified by speakers today.

Social Housing

Lord Shipley Excerpts

Monday 24th May 2021 Lords Chamber

Asked by

[Lord Shipley]

To ask Her Majesty’s Government what plans they have to increase the number of social housing homes for rent.

[Lord Shipley (LD) [V]]

My Lords, I remind the House of my register of interests and beg leave to ask the Question standing in my name on the Order Paper.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

We have confirmed £12 billion over the next five years, which will be the largest investment in affordable housing in a decade. This includes our new £11.5 billion affordable homes programme; around half of its delivery will be for social and affordable rent. We expect our new programme to deliver around 32,000 social rent homes, double the number of the current programme.

[Lord Shipley (LD) [V]]

I thank the Minister for his reply. House prices have been rising steadily because of demand-side subsidies by the Government for owner-occupation, yet the National Housing Federation estimates that almost 4 million people need the security of a home for social rent because they cannot afford to buy. I ask the Minister whether he thinks that the Government have got their priorities right.

[Lord Greenhalgh (Con)]

My Lords, of course I think that we have got our priorities right. We are focusing on building homes of all types and tenures. That includes affordable and social rent and, importantly, giving people the opportunity to buy and own their own home.

Queen’s Speech

Lord Shipley Excerpts

Monday 17th May 2021 Lords Chamber

[Lord Shipley (LD) [V]]

My Lords, I remind the House that I am a vice-president of the Local Government Association. I too congratulate the noble Lords, Lord Coaker and Lord Morse, on their excellent maiden speeches.

This has been a challenging debate for the Government, partly because of what is not in the gracious Speech, such as local government funding reform, including business rates reform, the Government’s plans for reforming social care, or the plans they may have for greater devolution in England. It is partly also because of what is in the gracious Speech, such as the proposed planning Bill—which has not been properly thought through—and the elections integrity Bill, about which my noble friend Lord Teverson spoke so convincingly.

First, let me acknowledge the important principles behind the building safety Bill and the Leasehold Reform (Ground Rent) Bill; these are both welcome. I look forward as well to the details of the subsidy control Bill, which should permit local authorities to support key industries, together with the procurement Bill, which could encourage public-private sector working in which social value can be a factor. I welcome, too, plans to widen opportunities for the development of adult skills.

However, I was concerned to hear the Minister say earlier in relation to the private rented sector that a White Paper is planned for the autumn. I had been expecting a renter’s reform Bill, so can the Minister confirm whether this means that the timetable for promised reforms is about to slip significantly?

Moving on to the planning Bill, in his introduction to today’s debate, the noble Lord, Lord Greenhalgh, said that it is about modernising the system to make it quicker, simpler and streamlined. Simplification is always welcome as long as standards are not reduced. However, in simplifying planning procedures, the Government must not reduce local democratic accountability, which is part of the essential process for ensuring high standards. Poor accountability leads to lower standards. The Government know that we have suffered in recent years from a culture that has encouraged poor-quality building. The danger in this Bill is that local planning authorities will not be able to turn down poor-quality developments, which they currently can do. This is not in the public interest. The Government should not be reducing the powers of local planning authorities in the way they are attempting.

The Government are right to want to increase housebuilding but the truth is that this cannot be achieved without a substantial element of new building led by local authorities. New homes, whether for purchase or for rent, must be at prices and rent levels that people on average incomes can afford. We need more social homes to be built—around 100,000 a year for several years—which requires more financial freedoms for local authorities to achieve that. This should be the Government’s priority.

Instead, we are witnessing a boom in house prices caused largely by demand-side subsidies from the Government. The average cost of a new home has now reached £200,000. I submit that this is not the kind of growth the economy needs. Also, despite the need to build more homes, 1.1 million homes granted planning permission in England in the past decade are yet to be built. It is hard to see exactly what problem the Government are trying to solve with their proposed planning Bill. It does not seem to be the planning system that is responsible for not enough homes being built.

There are two other issues on housing. First, more than half of local planning authorities set no requirements for any accessible housing standards, so will the Government create a mandatory baseline for new homes broadly equivalent to the lifetime homes standard or category 2 in the building regulations? This is already the case in London, so why can this policy not be implemented across England?

Secondly, have the Government got their demand forecasts right? I ask because the Office for Statistics Regulation has recently been critical of the Office for National Statistics for its population forecasts, which in some places seem much too high. What is the Government’s response to this conflict of evidence?

Finally, I welcome the proposed levelling-up White Paper, which will set up new policy interventions for poorer areas. I suggest that this should include the role of the private sector in supporting levelling up through the use of the tax system to encourage its investment policies to be directed towards supporting all parts of the country.