Railways: East Coast Main Line

Lord Shipley Excerpts

Thursday 27th November 2014 Lords Chamber

[Baroness Kramer]

My Lords, there are enormous practical barriers relating to the basis on which funding is provided to the public service operator differing from that available to the private operators in the bid. It is crucial to ensure that we get the best ideas, innovation and investment in the service for the people who are going to use the east coast and that is exactly what this franchise delivers.

[Lord Shipley (LD)]

My Lords, I welcome the Minister’s announcement. It is the right decision. It delivers more services, greater investment, more trains and new routes. In addition, the trains for destinations on the east coast main line will be built in the north-east at Newton Aycliffe. The staff of East Coast do a magnificent job. Can the Minister confirm that they will all be guaranteed their jobs on current terms and conditions of service?

[Baroness Kramer]

The way in which this franchise has been set up is a sale of shares. All staff will remain on their existing contracts. They will continue effectively to be employed by the same employer. Whatever those terms are will continue. It is important to notice the ambitions in this franchise to improve training and opportunities for staff. Virgin has been clear that, with new services, it is going to need to train and hire new drivers and new on-board staff. There are no plans to close ticketing, although much friendlier services will be opened up.

Queen’s Speech

Lord Shipley Excerpts

Thursday 5th June 2014 Lords Chamber

[Lord Shipley (LD)]

My Lords, a number of speakers have said that this debate on the gracious Speech gives us an opportunity to assess the success of the coalition Government as they enter their fifth year. The speech reminds us that the Government have a long-term plan to rebuild our economy which, if it is to be achieved, requires further reductions in the deficit and continued low interest rates. I subscribe to that aim. The Government’s overall debt continues to rise and the only way of controlling and reducing it is to reduce the annual deficit. Of course, the deficit will be reduced if tax revenues rise but for tax revenues to rise we need growth, and growth will be encouraged by continuing low interest rates. That is particularly important for those parts of the UK which have higher than average unemployment rates. That is why I am pleased that the Bank of England did not seek to raise the base rate when unemployment fell below 7% nationally. The continued recovery needs low interest rates to encourage business investment.

In this respect, I am particularly impressed by the recent performance of the small business sector and welcome the small business, enterprise and employment Bill which, for the first time, specifically addresses the needs of the country’s 4.9 million small businesses. Small firms have been responsible for four in five jobs created during the three years between 2010 and 2013. In addition, nine out of 10 unemployed people either found work in a small firm or started their own business in that period. I welcome the proposals to help small businesses grow, not least in procurement policy, where Whitehall has been too keen to push procurement contracts towards large national companies, mostly headquartered in the south-east, and away from regionally based companies which are smaller but nevertheless have excellent track records in delivery and localised training. The test of that Bill will be whether the Government deliver their procurement ambitions. The Government say that they want to provide small firms with fair access to the £230 billion spent each year in the form of public procurement contracts, so I hope it will become clearer how this will be done when we discuss the detail of the Bill.

Overall, the recovery cannot just be about cutting the deficit and I welcome the emphasis in the gracious Speech on growth, infrastructure investment and access to finance, not least because the outcomes from Funding for Lending have been lower than we would wish. The Bank of England recently reported that Funding for Lending had fallen by £2.7 billion. In recent months, it has been only for business lending and not housing. However, the evidence seems to be that lending to SMEs has not been boosted. It could be that crowd funding and peer-to-peer lending are rising and accounting for part of that gap but it is vital that small businesses can borrow more from the banks.

The potential of the small business sector is very great. A few days ago I visited a small but fast-growing precision engineering company, Chirton Engineering, which is to host the new North East Advanced Machining Academy. The academy is the product of work by Tyne Metropolitan College, working in collaboration with Chirton Engineering, Tyne North Training and North Tyneside Council, and it will enable students to be trained to the highest of standards on specialist machines and ensure that apprentices are job-ready for their first day on the factory floor. What particularly impressed me was the integration of an expanding business with training and apprenticeships in engineering, and with excellent linkages to local schools.

I spoke earlier about the opportunity that this debate gives us to comment on the Government’s achievements, and apprenticeships are one of them. I congratulate Ministers, particularly BIS Secretary of State Vince Cable, on their determination to give young people the opportunity to learn on the job. Some 1.6 million apprenticeships have been created since the 2010 election, and I welcome the plan to build that further to 2 million apprenticeships by 2015. I do not want to be overcritical of the previous Government, but the Future Jobs Fund was expensive. Each placement cost up to £6,500 and created short-term placements, predominantly in the public sector. Half of Future Jobs Fund participants went straight back on to benefits after the six-month job ended. What this Government have done, and are continuing to do, is proving much more sustainable.

A number of speakers today have talked about the commitment in the gracious Speech to increase housing supply. I welcome that because the shortage of affordable housing, both to buy and to rent, is becoming critical. While there is some evidence that Help to Buy is not by itself creating a bubble in London and that it seems to be working in the regions, the fact remains that the affordability gap has risen to almost 10 times average salary in 2013. That is not sustainable.

The problem is a shortage of supply. Rightly, the Government plan to increase supply, but the question is whether they will provide the means at the same time as they desire the end. It is not just about reforming the planning system or, as the noble Lord, Lord Sawyer, pointed out, garden cities. It is about providing decent homes for all, which, together with a good education and a secure job, are the foundations of an inclusive society. The Government are planning to do something. It is good to see that they will provide support to smaller builders to develop new homes with a £525 million builders’ finance fund, which will deliver up to 15,000 homes on small sites. The problem is that too many small construction firms—two-thirds of them—closed down when the recession hit. It has become clear that more competition with larger firms is in the public interest. I am also pleased that the Government will introduce a £150 million repayable fund to support up to 10,000 new service plots for custom-build homes, and that there will be further reform to make it easier for empty buildings to be converted into new homes, supporting brownfield regeneration.

Welcome as all these initiatives are, I fear that they will not be enough to deliver the 250,000 homes that the country needs each year over the next few years to meet demand. The Government simply must use every means at their disposal to get councils building again. We have heard what happened in the 1950s and it is entirely possible to do that all over again. As a start, I hope that the remaining cap on local authority borrowing can be removed in its entirety. That would help.

There is mention in the gracious Speech of Scotland, the case for Scotland staying in the UK and the implementation of new powers. The gracious Speech says:

“My government will continue to implement new financial powers for the Scottish Parliament and make the case for Scotland to remain a part of the United Kingdom”.

It is the first part of this that I want to look at more closely because I think it has profound implications for English local government. I declare my interest as vice-president of the Local Government Association. The issue is going to be this: once the referendum is done and dusted, who raises what taxation? Too often over the past two to three decades, the issue has always been that money is disbursed from London. We have heard from my noble friend Lord Flight about the £70 billion that is effectively transferred from London and the south-east, in terms of public spending, to other parts of the United Kingdom. That is a very large sum of money. The time is coming when all parts of the UK, if we are not to have a continued centralised state in London, are going to have to take greater responsibility for raising the sums that they spend.

There has been devolution in the past three years to local enterprise partnerships, to local councils and to combinations of local councils in the form of combined authority, but that question of who raises what taxation is rising up the agenda. I think that there is greater awareness of this now in England; there certainly is in Wales. There are pilots, of course, not least the Greater Manchester earn-back model, which gives Greater Manchester a half share in the increase of all taxation. However, English local government now needs to be fleet of foot and help to define and drive forward the devolution agenda, because we know from European experience that devolved power drives faster growth and we need to replicate that across the UK.

Devolution in transport funding is well under way and Ministers and the DfT should be congratulated on that. For one thing, it will require local areas to prioritise their projects. Wish lists are all very fine, but if local government wants to make a success of devolved powers it simply must be able to prioritise across council boundaries.

In conclusion, I shall say three things. I have been very impressed by the contribution of the Governor of the Bank of England. His points about inequality, the overdominance of London and the potential of a housing bubble in London have been well made. I am much more positive about London than some other speakers have been. It is possible that part of the growth of London is cyclical, but clearly not all of it is. London is producing high tax revenues that get recycled to others and a large number of jobs for people across the United Kingdom. For me, London’s success is a success for the United Kingdom. We have to bear in mind that London has a very strong economy, but the part of the UK that has highest rate of child poverty is immediately adjacent to the City of London and is the London Borough of Tower Hamlets, so the problems of equality are not just between London and the rest of the country but within London. These are major issues for politicians of all parties. There is clear evidence that, even if you take out expenditure on Crossrail, more capital infrastructure funding has been spent in London than in other parts of the United Kingdom. That needs to be reversed.

I note the comments that have been made about devolution. This Government have done far more than any previous Government on devolving to the constituent parts of England. However, it takes time to be a success. The process has been going for just over three years. One of the things I have learnt in the work that I have been doing is that you need a structure to devolve to. It often has to be a structure that transcends individual council boundaries. I see the city deals process and the local growth deals as a step in a long-term process that moves greater decision-making out of London.

Finally, I think we are starting to see the green shoots of growth in a whole set of ways. The gracious Speech identifies the strengths that this coalition Government have produced. As long as we bear in mind all the warnings that we have heard about rising inequalities, that growth agenda can continue to be supported.

Railways: East Coast Main Line

Lord Shipley Excerpts

Tuesday 4th June 2013 Lords Chamber

[Earl Attlee]

My Lords, many noble Lords have privately approached me and said how well the east coast franchise is working under DOR. However, we need a longer-term investment plan for the future. The Brown review finds that franchising is a fundamentally sound approach for securing the passenger railway services on which so many people rely. The Government remain committed to benefiting from private sector innovation and operational experience in their railways.

[Lord Shipley]

My Lords, I am a user of the east coast service. Will a new franchisee be tied to the presently proposed trains, or may they be able to propose an alternative of a much cheaper rolling-stock package?

[Earl Attlee]

My Lords, the future for the east coast main line includes the intercity express programme to replace the existing high-speed trains, which are very old. There is an option to extend the IEP to include replacing the 225 trains. The Government will have to decide later this year whether to take that option.

Growth and Infrastructure Bill

Lord Shipley Excerpts

Wednesday 27th February 2013 Lords Chamber

[Lord Best]

My Lords, I have added my name to Amendment 22, which was prepared by the Local Government Association. I am grateful to the noble Lord, Lord McKenzie, for introducing this amendment and explaining its purpose and value. My overarching concern is that the intention of Clause 6, which is to see stalled development up and running swiftly, will not materialise without substantial changes to this clause. Indeed, the knowledge that central government may overrule legal agreements between local government and house builders may encourage exactly the wrong response from some elements in the housebuilding industry, and this measure could backfire.

The Clause 6 procedure offers relief for house builders where they have paid too much for a site and now wish to be excused from their obligations to provide affordable housing. Amendment 22 would mean that only agreements already made could be addressed by going down this Clause 6 route. The practice of developers speculatively outbidding others—including housing associations keen to buy a site and fulfil the affordable housing obligations on it—would not be perpetuated into the future. It would no longer be possible for developers to say, “Let us gamble on house prices rising, but if they do not do so, we can go to the Planning Inspectorate and secure a release from our Section 106 agreement”.

In my most charitable moments, I can feel some sympathy for the small builder who is unable to work on a swings-and-roundabouts basis of some highly profitable and some less profitable site purchases and who unwisely paid too much for a site at the height of the boom some four years ago. The bigger house builders are currently doing very well. Persimmon and Bovis have just reported huge increases in profits of more than 50% and more than 60% respectively. Some smaller developers, however, may have been caught out in 2008 or 2009, thinking house prices would rise inexorably when they have been pretty flat outside London and the hot spots. Nevertheless, surely we do not want to encourage continuing speculation on the basis that, from now on, the state will bail out those who bite off more than they can chew. Any developer entering into a Section 106 negotiation at the current time is clearly doing so with their eyes open to the economic realities of the day. These negotiations make use of viability appraisals and the signal must go out to house builders that they can no longer sign agreements in the expectation that they will not really be necessary to honour those agreements because central government’s planning inspectors will set aside their obligations if the developers can show that they will not make a profit of 20% or so.

This amendment draws a line under state intervention in these Section 106 agreements from the date that the Bill becomes an Act. I strongly support it. Alternative amendments for a sunset clause three years hence seem to miss the point. It is now that we want people to get busy and get started on sites that they own and are currently stalled. Every time a local agreement to produce more affordable housing is set aside, households on low incomes waiting for a home are forced to wait longer. We should ensure that this happens on only the rarest occasions. I strongly support an amendment that would stop the perpetuation of the opportunity for developers to renege on agreements that they have signed with local authorities from henceforth.

[Lord Shipley]

My Lords, I will speak to Amendment 28. I strongly support Amendment 22 and the principle behind it that only planning obligations agreed prior to Royal Assent should be included in the Bill. Amendment 28 is a sunset clause, and the Government have, through their own Amendment 32, accepted the principles of this. Our view is that no applications should be made under this section three years after its coming into effect. I accept that there may be a case to give power to renew or extend a subsection if economic circumstances demand it. However, I am not convinced that it should be open-ended and effectively give a power to the Secretary of State to extend it for as long as he would wish it to be extended. I am seeking from the Minister some clarification as to what the Government’s intention actually is with their Amendment 32.

I will be very precise about the questions to which I think the House should seek to secure answers. It would be helpful if the Minister could refine her amendment at Third Reading, so that any extension to the time limit should be for no more than two years from the date it is proposed. That would have to be before April 2016, so it would give an absolute time limit of five years. Secondly, would the Minister commit to presenting a report to both Houses before bringing forward regulations to extend that time limit? Would the Minister also commit to consulting with social housing providers and others prior to presenting that report, in order to inform its contents? Thirdly, will the Minister also commit to accepting the will of both Houses in any vote to extend the time limit?

The Government should still look to extend Clause 6 to include the full range of planning obligations. Not only would this challenge any perception that the Government viewed affordable housing as of secondary importance in planning terms; but if other obligations are causing the delay, that could remove significant impediments to that development. We will have a chance in a further amendment to look at that a little more closely, but I remain concerned that the Government’s amendment is too open-ended.

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Moved by

[Lord Shipley]

23: Clause 6, page 6, line 15, at end insert—
“(2A) An authority can only make a determination in accordance with subsection (3)(a) if it is satisfied, having regard to the development plan, that modifications to planning obligations other than the affordable housing requirements affecting the development or a reduction in the level of the community infrastructure levy payable would not be more appropriate.”

[Lord Shipley]

My Lords, I declare my vice-presidency of the Local Government Association.

This amendment is designed to assess why only the affordable housing element of a stalled development should be considered. To make a stalled development economically viable, it is important to look at the full range of planning obligations, not just affordable housing. Sometimes it might be sensible to vary affordable housing obligations, but at other times other matters, such as the scale of highway contributions or a developer’s community infrastructure levy liability, might have a greater impact on a development’s viability. This approach would reflect the Government’s desire to ensure that planning applications are not acting as a barrier to new development and would give much greater flexibility to planning authorities in their negotiations with developers.

I have read carefully the draft viability guidance on Section 106 affordable housing requirements. It says that the application and appeal process will assess the viability of affordable housing requirements only. It will not reopen any other planning policy considerations or review the merits of the permitted scheme. I believe it is very clear that only affordable housing requirements could be subject to negotiation.

However, it also says at a later point in the draft that the timing and level of off-site contributions may also be considered. Will the Minister define an off-site contribution? I take it to be something broader than simply the affordable housing requirement and might actually include the community infrastructure levy. I would like clarification of that because later in the draft viability guidance it says that the relevant sections, Sections 106BA and 106BB, do not provide an opportunity to reopen policy considerations or requirements for planning obligations other than for affordable housing. Again, the matter is clear. Therefore I am left wondering what an off-site contribution actually is, as presumably the affordable housing is on site.

It seems to me to be common sense that local planning authorities should be given the capability to consider other planning obligations as part of a Section 106 agreement beyond simply the affordable housing component. It could be that if there were a successful negotiation on those other matters, it would enable more affordable housing to be built as a consequence. For the reassurance of the Minister, I had not planned to move this to a vote, but I believe that the issue ought to be explored so that we have clarification of what is actually intended and why the Government feel that they cannot permit other planning obligations to be part of the consideration of the renegotiation of a Section 106 agreement. I beg to move.

[Lord Jenkin of Roding]

My noble friend Lord Shipley has raised an interesting issue, which has been raised at earlier stages, as to why only affordable housing is able to be renegotiated. He has also added to his amendment the question of the community infrastructure levy. Bearing in the mind the main purpose of the CIL, I would question whether that would be an appropriate reduction to seek. The CIL is after all intended to provide local authorities with the resources to pay for some of the infrastructure that would be necessary to support the housing requirements. It is true that affordable housing does not attract the CIL, but the rest of the housing development would. If one is going to have a community infrastructure levy, I would be very reluctant to see that negotiated down on the grounds of the developer saying that their scheme is not viable.

We have not had a full explanation of why only affordable housing is able to be renegotiated, because there may well be other obligations. I, too, read the sentence in the guidance about the other “off-site” obligations and I was not quite sure what that meant. When I first read it, I thought that it meant off-site affordable housing, but affordable housing is often not immediately on the same site as the rest of the development; it can be on a different site, so I do not think that that is what it means. I would welcome an explanation from my noble friend on the Front Bench as to what is involved. Hitherto, I have wholly supported the idea of renegotiation. Indeed, it has been the main burden of complaint of developers that they have agreed in different circumstances to affordable housing obligations and that it is that which makes their development unviable. That is why there has been, as was referred to earlier, a lot of negotiation going on with local authorities anyway. However, I am not aware of any local authorities which have negotiated reductions in other planning requirements that may have been necessary.

The draft affordable housing requirements guidance states:

“Timing and level of off-site contributions may also be considered”.

What does that refer to? I think that I took the guidance off my computer this morning, so it has come just in time. I would be very much against seeking to renegotiate downwards the community infrastructure levy.

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[Baroness Hanham]

My Lords, I think that it is explanations that are asked for rather than anything else. I was asked what “off-site” provision was. It is exactly what it says. As noble Lords will know, when an obligation is entered into for affordable housing, in many cases that affordable housing is not on the main development site but is being provided elsewhere. All the guidance says is that any affordable housing that is not on the particular site can be taken into account. I hope that explains that. We discussed this quite a bit in Committee but it should be quite clear that this clause relates only to affordable housing. That is the only element that we are seeking to address within this Bill.

Local authorities can voluntarily renegotiate Section 106 agreements already. Under the regulations that have just been laid, they can be required to look at the whole aspect. Often the affordable housing is quite a large aspect of the development obligations and it therefore makes sense not to go through the whole galaxy of the Section 106 review, but to take account of the affordable housing and go through a quicker process.

This is, of course, taken into account against the background of the development plan and has to be reviewed under those provisions together with what was taken into account when planning consent was granted in the first place. The development plans include policies for the delivery of affordable housing to meet local needs. These policies are usually applied in the context of individual site viability. The effect of the clause is to help to deliver these policies by bringing forward viable development; it does not require a revisiting of the plan policies.

The noble Lord, Lord McKenzie, made, I think, a moderate complaint about the fact that the proposals for establishing viability appeared only last night. I recognise that and I apologise that they were rather late. However, they are not very detailed and I think anyone with a lunchtime would have had an opportunity to read them. However, lunchtime does not exist in my life and maybe not in other noble Lords’ lives either, so I understand the noble Lord’s point.

The obligations that we are discussing were probably agreed at the time of the property boom and before the statutory tests for Section 106 were introduced in April 2010. Before then there was no statutory requirement to ensure that obligations were,

“necessary to make the development acceptable in planning terms”.

Therefore, there may be capacity to revisit a range of obligations that were required before the tests were in place.

A full review of all aspects of an agreement could be costly and time-consuming for both parties. We wanted a streamlined review process as a backstop whereby viability is an issue. Affordable housing obligations are often the most expensive element of the Section 106 agreement and are agreed subject to viability. Research from 2007-08 found that about 50% of all planning obligations were for affordable housing so this is quite a significant area. That is why we have focused on only the affordable housing element of a Section 106 agreement in the Bill. For obligations agreed since April 2010, the statutory tests should ensure that the local authority can require only those items that are,

“necessary to make the development acceptable in planning terms”.

Our approach will safeguard essential mitigation measures, such as transport, open space and education provision, which are required for the scheme to go ahead, and would be part of the overall Section 106 agreement but would probably take a great deal longer to negotiate. To open up the clause to these other obligations would add complexity to the review and could make the development unacceptable in planning terms.

I turn now to community infrastructure levy payments, which I am not sure the noble Lord, Lord Shipley, mentioned but my noble friend Lord Jenkin did. It is not very helpful to bring them into consideration here. The community infrastructure levy is non-negotiable so it cannot be taken into account as it cannot be renegotiated. The levy is up front—developers know what they will have to pay and it is predictable. It is set at the local level in accordance with local viability. Local authorities do not have discretion to waive or reduce the community infrastructure levy once the payments are set. The regulations make provision for exceptional circumstance relief but only subject to very strict criteria.

With those explanations and going back to the indication that this clause relates only to affordable housing in this Bill, that Section 106 agreements can be renegotiated voluntarily and that the regulations for post-2010 are now in place, I hope noble Lords will realise that there is a package here and will not press their amendments.

[Lord Shipley]

My Lords, I thank the Minister for her reply and for her explanation. I am sure that we share the aim of wanting to build more affordable housing. In accepting the Minister’s assurances about the Government’s desire to get housebuilding on-site, I beg leave to withdraw the amendment.

Amendment 23 withdrawn.

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[Lord Shipley]

My Lords, I support the amendment so ably moved by the noble Lord, Lord Best, and would like to speak in particular to Amendment 31, to which my name has been added.

I regard this as a public interest matter and I am not currently assured that this is being addressed adequately in the Bill. It seems to me that taxpayers have a right to secure clawback if, following a renegotiation, there is a rise in the value of the land. That clawback should be spent on affordable housing because it was the inability to build and the requirements around the level of affordable housing that caused the renegotiations to take place initially. There is a public interest issue here on behalf of the taxpayer, who should be able to share in the rise of the value of land.

On Amendment 31, it is reasonable that an applicant, having renegotiated successfully, must commence development within six months of the final appeal decision. Otherwise, if they do not get on with it, what is the point of that appeal having been made? It seems to me that the public interest requires a developer to get on with the building, having successfully renegotiated the arrangement.

I read very carefully the draft liability test and I am very concerned about the failure of the Government to define “commencement” as at present it can only be defined in terms of the case law that exists. I find Amendment 35 to be extremely helpful because it seeks to define what commencement means. Also, in terms of securing an outcome—renegotiation—which is in the public interest and in the interest of taxpayers, it seems reasonable to have a tighter definition of what commencement means.

[Lord Deben]

I wonder whether my noble friend could help me. It may be that I am extremely stupid about this, but I do not understand why it is not possible for the local authority, as part of its renegotiation, to insist upon these things in any case. Why can it not say, “As part of the agreement we want to do this, but the deal is you do actually get started in the way that we between us decide is a start.” Is there anything illegal in doing that?

[Lord Shipley]

My Lords, I am grateful for my noble friend’s intervention. The Minister will be in a better position to reply, but it seems to me that, where there is agreement, these matters can be satisfactorily resolved. The problem arises when there is not agreement, as a consequence of which a decision has to be made. The case law definition of commencement will then be used; it will enable a whole set of minor things to be done and the developer is deemed in law to have commenced development. Amendment 35 defines much more closely what commencement actually means.

Growth and Infrastructure Bill

Lord Shipley Excerpts

Wednesday 30th January 2013 Lords Chamber

People rightly feel that politics is too distant; they do not have enough power over their own lives and the places where they live. We should also take the opportunity to build on the momentum which flows from the first and second rounds of city bids, while embracing the wise counsel on this issue of the noble Lord, Lord Heseltine, in his report on growth, to which the noble Lord, Lord Jenkin, referred. This report set out the case for a major reconfiguration of responsibilities for economic development between central and local government, and indeed between government and the private sector. In this context, the call for a report would seem extremely modest and I hope that the Government will accede to it.

[Lord Shipley]

My Lords, in speaking to this amendment I first declare that I am a vice-president of the Local Government Association and, as your Lordships know, a government adviser on cities policy. This amendment would extend the city deals structure, potentially to all councils, and it would be a practical manifestation of what we passed in the Localism Act. I welcome that. The aim of this amendment is to boost economic growth, based on the core package for wave 2 cities. As the noble Lord, Lord McKenzie, explained there will be a confirmation, I think within a few weeks, of those wave 2 cities. However, the core package will be derived from the experience of those in wave one. I expect that that announcement will be made during March; I certainly hope it will be before Easter.

The amendment would mainstream the core package of the city deals. When the Deputy Prime Minister launched the wave two process at the end of October, he said that,

“while it’s too early to talk exactly about what a third Wave might look like, I very much see this”—

wave two—

“as a step in a journey”.

I have concluded that the door is ajar and that this amendment may well represent a means of providing it with a gentle push, for all the reasons that my noble friend Lord Jenkin outlined. There is a very clear base of evidence that if you localise, decentralise and devolve, you will actually drive faster economic growth if you provide local councils and their local enterprise partnerships with the statutory means of delivering that economic growth.

I have one caveat. Councils will need to show governance structures demonstrating their stability, their ability to manage risk and their ability to pool thinking and resources with their local enterprise partnerships and neighbouring councils so that driving growth in an area is seen as a collaborative process rather than a competitive one. I am particularly impressed by the governance structure that is in place in Greater Manchester, where the combined authority—enabled under legislation from 2009—provides a model that could be built on in other parts of the country.

Finally, on timing, if wave 2 city deal announcements are made later in 2013, this amendment will be implemented some time around the summer or autumn of 2014. As my noble friend Lord Jenkin said, this gives the Government an opportunity to consult and think further—but then to come forward with a means whereby the powers that are being given to a number of cities will actually be available to all of local government.

[Lord Smith of Leigh]

My Lords, I must follow the noble Lord’s compliments to Greater Manchester by speaking at this point. I need to declare my interests, which I repeat from Second Reading, particularly to mention that I am the chair of the Greater Manchester Combined Authority. I therefore support this amendment, which gets to the heart of the Bill’s Title—it is what the Bill should be about.

I took part in the negotiations with the Government over the city deal. It was a very interesting process. Obviously, we developed ideas on our own and in conjunction. The noble Lord, Lord Jenkin, is absolutely right that it needs to involve not just local authorities but the local business community. It takes a very special skill for many businesspeople to rise above their day-to-day work to have that comprehension of local economic policy, but in Greater Manchester we are fortunate to have many people who can do that. We rely on them and other partners such as universities, which are very important, too. On the key partners, we need to remind the Government that this is not a financial issue for local authorities. We are actually asking for devolution—not necessarily for more money but to have the money spent at a local level, where many of us believe it will be spent more effectively. In some cases, no money is involved at all; it simply gives us permission to do what we currently have to do.

The city deals work. They can harness the strengths of local partners and build on local knowledge, and they can be addressed to the local circumstances. I am sure that the city deal for Greater Manchester is different from the city deal for Newcastle, because the issues are clearly different. We will have some similar issues. No doubt skills are a very important part but, for us, transport was a key issue. As the noble Lord, Lord Jenkin, rightly said, this amendment mirrors the report of the noble Lord, Lord Heseltine. It is really beginning to address this point about freedom. At a meeting of the Greater Manchester Combined Authority on Friday, we were pleased that we were beginning directly to fund local businesses to take on new workers and expand, so the measure is working practically on the ground. It is not a theoretical thing, and I will be very glad to see the rolled-out programme.

Like the noble Lord, Lord Shipley, I am a bit concerned about the wording of the amendment because I would not like every local authority to have to have its own deal with the Government. That is not what the spirit of this measure is about. What we did very carefully in Greater Manchester was to think about the functional economics. What is an economic area that makes sense? As important and lovely as the great city of Manchester is, its geography is a very odd shape. It is very long and thin. It is not a functioning economic area. The centre of Manchester and the centre of Salford are very close together, so we need to go over local authority boundaries. I hope that in passing some version of this amendment, we can encourage local authorities to be co-operative, as the noble Lord, Lord Shipley, said, to work together to think about what is in the interests of their communities and to make sure that we start to deliver what all noble Lords want, which is more growth, more employment and more opportunities in the country.

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Moved by

[Lord Shipley]

60A: After Clause 12, insert the following new Clause—
“Planning permission required for development
(1) Section 57 of the Town and Country Planning Act 1990 (planning permission required for development) is amended as follows.
(2) Subsection (3), after “Where by a development order (or a local development order)” insert “issued by the local planning authority.”
(3) After subsection (3), insert—
“(3A) Where a local planning authority propose to make an order under this section they shall first prepare—
(a) a draft of the order; and(b) a statement of their reasons for making the order.(3B) The statement of reasons shall contain—
(a) a description of the development which the order would permit; and(b) a plan or statement identifying the land to which the order would relate.(3C) Where a local planning authority have prepared a draft local development order, they shall consult, in accordance with regulations, persons whose interests they consider would be affected by the order.”.”

[Lord Shipley]

In moving Amendment 60A, I shall also speak to Amendments 60B and 60C, as well as Amendments 71 and 71A. I present the apologies of the noble Lord, Lord Tope, who is unavoidably away today. Amendment 71A, in the name of the noble Lord, Lord McKenzie, is in practice virtually the same as Amendment 60A in our name, but the grammar in his is better than the grammar in ours.

Amendment 60A would allow local authorities to set their own permitted development rights. It is a logical extension of the Localism Act, because what is and is not permitted development should be decided locally. The current system allows central government to set out permitted development rights and provide local authorities with limited mechanisms to amend this. We noted the debate in your Lordships’ House on Monday about free schools and the powers of government over permitted development rights, and the limited powers that local authorities can sometimes have. We shall debate that issue further, but allowing permitted development to be managed by a local authority at a local level would mean that individual local issues and differences such as between rural and urban, suburban and city and town centres could be considered.

I accept that the proposal is a significant change to the planning system, and there may be concerns about that both from professionals and from the Government. Any change would need to be accompanied by robust consultation before commencement, but there is a principle behind this that permitted development should be decided at a local level.

Amendment 60B would remove the need for the Secretary of State to give approval for local development orders. Local authorities can currently restrict or extend permitted development rights via the use of an article for direction or a local development order. That can be important when, for example, a council could better support local economic growth. But the procedures that have to be followed are complicated and time-consuming and rarely used by local authorities. I have been concerned by the length of time that it can take to get a conclusion to a consultation on an Article 4 direction from the beginning of the consultation. Removing the need for the Secretary of State to give approval for each and every local development order as it is implemented across the country would make the procedures quicker and more effective.

Amendment 60C would remove the need for an individual annual report on all local development orders. I question whether those annual reports are necessary. If there was a problem with the local development order, I think it is inevitable that councillors and planning officers would know about that. However, Schedule 4A to the Town and Country Planning Act 1990 states that an annual report must be produced detailing,

“the extent to which the local development order is achieving its purposes”.

The schedule also states:

“The Secretary of State may prescribe the form and content of the report”.

This is very centralist, and I think that the provision could be safely removed from the statute book in order to speed up the process of extending and relaxing rights better to support growth. At a time of constraint in local authority staffing and planning departments, it would also free up considerable local authority resource and time. As I said a moment ago, councillors and planning officers will know whether a local development order is not working properly.

In the absence of the noble Lords, Lord True and Lord Tope, both of whom are unavoidably unable to be here, I wish to comment on Amendment 71. This amendment would offer local discretion on permitted development reforms. As I am sure my noble friend the Minister knows, there is great concern about this. The amendment would offer councils the local choice of whether or not to introduce the permitted development changes which the Government are seeking to introduce. It is not clear to me, and has not been throughout the process, why the Government want to do this. It is supposedly to have a positive impact on growth. It is not clear to me how the Government’s proposals would have a positive impact on growth. I have concluded that permitted development rules should not be changed by Whitehall, since such a move cannot take account of significant local differences. As I said a moment ago, city centres, suburbs, town centres, urban areas and rural areas may all have different requirements, and councils are best placed locally to make these judgments. This is a very important issue, and there is a very important principle at stake. If we believe in localism, surely we should permit a planning authority to have local discretion on permitted development schemes. I beg to move.

--- Later in debate ---

[Baroness Hanham]

My Lords, I appreciate that proposals and applications for extensions will always be different because it will depend on the nature of the property—for example, whether it is terraced or detached. Permitted development rights are being removed for small-scale and reasonably small-scale developments.

[Lord Shipley]

My Lords, I thank the Minister for her detailed reply. She may be right to say that there will be a desire to return to some of these concerns on Report. For the moment, I beg leave to withdraw the amendment.

Amendment 60A withdrawn.

Railways: High Speed Rail

Lord Shipley Excerpts

Monday 28th January 2013 Lords Chamber

[Earl Attlee]

My Lords, I am grateful for the support of the noble Lord, Lord Faulkner of Worcester. I have no difficulty at all in paying tribute to the work of the noble Lord, Lord Adonis. This project is going to cover the life of certainly several Parliaments and maybe even several Governments.

The noble Lord talked about speed on the conventional system. One of the problems if we do not do HS2 is that we will have to do upgrade projects on the west coast main line that might look attractive in terms of a business case but, actually, one will eventually run out of capacity on that line, having spent billions of pounds on those projects. The noble Lord is right. I am not sure of the technical points on how we will reduce the journey times from Scotland to London to three hours, but I will happily write to him on that.

[Lord Shipley]

My Lords, I welcome the announcement very strongly. I have two questions for the Minister. The first relates to the date on which the second phase of the high-speed track north of Manchester and Leeds will join the east and west coast main lines near York and at Wigan respectively. Will the Minister assure the House that this will be done at the very same time as the link to Manchester and Leeds is opened? Otherwise, there might be a flight of investment capital from developers who wonder whether points north of Manchester and Leeds will actually be brought within the high-speed framework. The solution to that problem is for a guarantee to be given that it will be done in 2033, when Manchester and Leeds open. Secondly, I simply ask for confirmation that there will be no reduction in the plans for upgrading the east coast main line in the next 20 years, pending completion of the second phase of HS2.

[Earl Attlee]

My Lords, my noble friend asked me some important questions about opening events occurring at the same time. Unfortunately, I cannot give the assurance that the noble Lord wants; the date is too far away. However, I will take the point on board. My noble friend also asked me about the upgrading of the east coast main line. It is important to keep that line working properly, but of course we are talking about something quite a long way ahead. I therefore cannot give my noble friend any specific assurances, other than the key one that the HS2 project will not divert resources from the conventional railway system.

Police Service: New Governance Structure

Lord Shipley Excerpts

Thursday 1st November 2012 Lords Chamber

[Lord Shipley]

My Lords, I, too, thank the noble Baroness, Lady Henig, for initiating this debate. She was right; we debated the proposals for police and crime commissioners at great length last year, and many views were expressed about the nature of the commissioner’s role, the powers that would be vested in them, their relationships with chief constables and local councils, and how checks, balances and scrutiny would be preserved. We on these Benches urged that pilots should be undertaken before final decisions were made.

I do not seek to revisit all of those issues, but I will identify what is of concern to me as elections for police and crime commissioners are about to take place. These concerns relate to: the nature of the elections and the public’s engagement with them; the location and extent of powers; and the need for early and continuous review.

Polling day is two weeks away and postal votes are going out. I hope for a high turnout, because the elections need to be a success, and those elected need to feel that they have a mandate. Given what we learnt recently about Hillsborough, strengthening public oversight of policing matters greatly. However, I fear turnout may not be high. The reason is that many people do not understand what they are being asked to do, and the amount of publicity given to voters has been woeful. I have lost count of the number of people who have asked me why the elections are being held, why most candidates are party political, and why so little has come through their letterbox. I can direct people to the leaflet delivered with poll cards, but that is mostly about procedures. Voters who can access the website discover comparatively little about the candidates and about their plans if they are elected. I do not understand why a booklet was not sent to every voter, as it was with the London mayoral election. I hope that turnout will be high, but if it proves to be very low, the Government, and particularly the Home Office, should ask themselves why they have wished an outcome—namely, greater democratisation of policing—without delivering the full publicity campaign needed to ensure that it happens as it should.

Commissioners will be entrusted with great power. They will set priorities through a five-year plan, in consultation with the chief constable. They will hold the chief constable to account, set the force budget and the local precept, and, where necessary, appoint a chief constable and, if required, suspend them. They need a very clear democratic mandate to justify this degree of power. The police and crime panels that will scrutinise the commissioner remain comparatively weak. In the Electoral Commission leaflet delivered through my front door, they were not even mentioned. They cannot veto the commissioner’s police and crime plan, or the budget, or the dismissal of a chief constable. They will be consulted on the plan and on any proposal to dismiss a chief constable, but their powers do not include a veto. They will of course be able to confirm or veto the commissioner’s appointment of the chief constable, and confirm or veto the level of the council tax precept—though only with a two-thirds majority.

With good will and mutual understanding between commissioners and panels, the structure could work reasonably well—and probably will in most places because the people involved will want it to work. However, that structure could very easily cause conflict. We will start to discover quite soon what will happen, because budgets and precepts will need to be set for 2013-14. Formal plans will need to be put in place quickly to underpin those budgets and the precepts asked for. Because a number of chief constable appointments are pending, we will see very soon how the procedures for appointment will work. Above all, we must ensure three things: first, that we do not politicise the police but preserve their neutrality, even though party-political candidates dominate the ballot papers; secondly, that we do not produce conflict in electoral mandates between commissioners, panels and local councils; and, thirdly, that the allocation of resources and operational command is impartially delivered. Making sure this happens will require early and continuous review.

I understand that the Electoral Commission will report on the conduct of the elections—and, frankly, the earlier the better. I suggest that reviews are then conducted over the next few months in these areas: the success of the appointments process for chief constables where there are currently vacancies; the success over the next few months of the procedures that are followed for the creation of the policing plan, the budget and the precept; whether any changes should be introduced for 2014-15; whether the make-up of police and crime panels ensures that they represent the spread of opinion geographically and politically in their force area; and whether the training of all members of those panels is adequate. It would be helpful to hear from the Minister what research and evaluation will be undertaken, and by whom, and to what timescale, to ensure that this new governance structure turns out to be a success. In the mean time, we should urge people to cast their votes as part of this major constitutional and governance reform and opportunity.

Local Government Finance Bill

Lord Shipley Excerpts

Thursday 19th July 2012 Grand Committee

[Baroness Lister of Burtersett]

My Lords, in moving Amendment 80, I will speak also to Amendment 81 as they are linked in terms of their objectives.

The Government’s recent report on the 2010 child poverty targets noted that one reason why the child poverty target was not met was that,

“not enough families got the support that they were entitled to”.

It cited the 2009 Child Poverty Unit report that estimated that,

“there were 400,000 children living in relative income poverty as a result of their families not receiving all the benefits and tax credits to which they were entitled. Improving take-up and support for families with children was identified as an important element of the agenda to tackle child poverty”.

However, the report continues:

“DWP take-up statistics show a downward trend in the take-up of most major benefits among families with children since 1998”.

Amendment 80 is drafted to address this concern, although it is not confined to families with children. Whereas in the past increasing take-up has always been a win-win situation for local authorities, improving living standards for their residents and helping the local economy, under the new cash-limited council tax reduction schemes, it is a zero-sum game, in which improved take-up for one group, particularly pensioners, means less money available for others. We have already had a preliminary skirmish around this issue involving in particular my noble friend Lady Hollis, who cannot be in her place today, and the noble Lord, Lord Greaves.

For the first time ever, we have an incentive to depress take-up written into the template of a statutory income maintenance scheme. That cannot be right. Take-up of means-tested benefits is a perennial problem and take-up of council tax benefit is among the lowest. The latest government statistics show that between 31% and 38% of those entitled did not claim council tax benefit, although that may be a slight overestimate of non-take-up. In other words, it is possible that as many as nearly two-fifths of those eligible are not claiming. Take-up is particularly low among pensioners, of whom between 39% and 46% are not claiming, and among couples with children, of whom between 41% and 48%, nearly half, are not claiming. Overall, the trend in take-up of council tax benefit has been downward. Since 1993-94, take-up has fallen by at least 6 percentage points for pensioners, by around 7 percentage points for non-pensioners, and by a massive 15 percentage points for couples with children. However, all those figures are approximate.

In its 2009 report, Take Up the Challenge, the Child Poverty Unit set out what it called,

“a strong argument for local authorities and partners to focus on increasing take up of benefits and tax credits by poor families with large unclaimed amounts”.

It explained that take-up can contribute to tackling child poverty and related issues such as social exclusion and health inequalities. There are also benefits for the local economy with money claimed in benefits and tax credits being spent in local communities. It continued:

“Furthermore, improving take up will help local authorities and partners to ensure that hard to reach and vulnerable families are receiving support, and are in contact with services”.

It pointed out that:

“A significant amount of benefits go unclaimed by people who are working”,

so that the:

“Lack of awareness of in-work financial support available through benefits and tax credits can be a barrier to parents entering and sustaining employment”.

To the extent to which the new localised schemes will still cover working people, improving take-up will reinforce the Government’s aim of tackling poverty through paid work.

The report concludes that,

“spending on increasing take up can provide good value for money”.

Given that, it was disappointing and surprising that in a Written Answer to my noble friend Lord Beecham, to which he referred in an earlier session, the noble Lord, Lord Freud, stated that the Department for Work and Pensions,

“does not promote benefits … The department has not spent money in the 2011-12 financial year on promoting the take-up of welfare benefits, and we have no planned expenditure to promote take-up of welfare benefits for the next financial year”.—[Official Report, 23/4/12; col. WA 302.]

It was even more disappointing and surprising to learn the other day that the DWP proposes to cease publishing estimates of take-up of means-tested benefits. I found that out by accident. I did not find it out as a Member of this House; I found it out as a social policy academic. I also found that my colleagues here were unaware of that really rather serious step.

Can the Minister tell the Committee what the Government’s position is on improving benefit take-up? Do they still believe that take-up is an issue? It would appear that they are content for people on low incomes not to receive the money to which they are entitled, despite the arguments put by the Child Poverty Unit, and now it would appear that they want to bury the evidence of such non-receipt.

As the Government are, in effect, washing their hands of the issue of take-up, it is therefore left to local authorities and voluntary organisations to do what they can to improve take-up. Local authorities have an honourable history in this area. They played a key role in countering the impact of benefit cuts in the 1980s by instigating often very successful take-up campaigns. The Child Poverty Unit report and an earlier DWP best practice guide give examples of the kind of take-up work that local authorities still do, including improving take-up of council tax benefit. Indeed, under the Social Security Contributions and Benefits Act 1992, local authorities now have a statutory responsibility for council tax benefit take-up. Each billing and levying authority,

“shall take such steps as appear to it appropriate for the purpose of ensuring that any person who may be entitled to council tax benefit in respect of council tax payable to the authority becomes aware that he may be entitled to it”.

Amendment 80 builds on this and would write a similar, if differently worded, responsibility into this legislation.

It has been suggested that the change of name from a benefit to a reduction or discount could in itself improve take-up, especially among pensioners. The noble Lords, Lord Tope and Lord Shipley, suggested that in an earlier discussion. I have no objection to the change of name, which could be helpful, but at the same time I return to the fundamental point that the cash-limited nature of the scheme will, as many organisations have pointed out, create a disincentive to local authorities to encourage take-up. This is particularly with regard to take-up among pensioners, whose entitlement, as we have already discussed, is protected by law. As many noble Lords have warned, the more money is paid to pensioners the less there is for other so-called vulnerable groups and for low-income working people.

In the face of this dilemma, it will be very tempting for local authorities to keep quiet about council tax reduction schemes and it is therefore crucial that there continues to be some form of statutory responsibility placed upon them to encourage take-up, hence Amendment 80. Another element in the dilemma is that even lower take-up could exacerbate another problem identified by organisations such as Citizens Advice and the IFS, which is of more people not meeting their council tax demands and there being extra work for local authorities trying to collect the arrears. Already, according to a recent report in the Guardian, the Consumer Credit Counselling Service has seen a 27% increase in the number of people contacting it for help with council tax arrears between 2010 and 2011.

As long as local authority council tax reduction schemes are funded by central government on a cash-limited basis, the traditional presumption that it is in the interests of both authorities and those eligible for assistance that take-up is maximised will, as I have said, no longer hold. Personally, I believe it is unethical to establish an income maintenance scheme for people on low incomes on this basis and I hope that the Government will think again. If they are not willing to do so, however, there is one step that they can take to mitigate the double-edged sword that improving take-up would now become. The money transferred to local authorities, whether or not they are subjected to a 10% cut—it goes without saying that I am opposed to such a cut—should be based on estimates of the numbers currently entitled to council tax benefit, rather than on the numbers actually claiming. The difference is considerable. In 2009-10, between £1.7 billion and £2.42 billion was unclaimed in council tax benefit. This should be included in the money devolved to local authorities, whether or not they are subjected to a 10% cut.

Amendment 81 is designed to address this issue in a different way by requiring the Secretary of State to ensure that there is sufficient funding available to meet the council tax reduction for all eligible claimants, so that if take-up improves it does not pose the dilemma that I have outlined for local authorities. In the absence of such a provision, can the Minister tell the Committee what the Government’s advice to local authorities will be as to how they should deal with the take-up dilemma created by the cash-limiting of the grant they will receive to run council tax reduction schemes? I hope that in the interests of maximising take-up the Government will be minded to accept Amendment 80, or to introduce their own amendment to retain a local authority responsibility to promote take-up, but that in doing so they will also address the perverse incentive they have created to depress take-up through an amendment on the lines of Amendment 81. I beg to move.

[Lord Shipley]

My Lords, I support Amendment 80, so ably moved by the noble Baroness. I will also speak on Amendment 81, which is slightly more problematic. It perhaps does not cover all of the issues quite as it might. First, there is an issue with the non-claiming of council tax benefit. There is a whole set of numbers; the noble Baroness mentioned £2.4 billion. These things are notoriously difficult to be certain about, but we can all agree that it is a very big number. A large number of people who are eligible to do so are not claiming council tax benefit. That gives rise to a conflict of interest for local authorities. That is a serious and important issue. That must be addressed. It may be in the financial interest of a local council not to promote or advertise the council tax support scheme. That cannot be right.

--- Later in debate ---

[Lord Shipley]

My Lords, I make a brief contribution on the amendment. I am strongly in favour of there being a report, but April 2016, although that is in the end no later than three years, is too far away. Indeed, if there were to be changes consequential to that date, implementation of those changes may take even longer. I would have thought that it would be possible to have a report no later than two years from the implementation of the Act, which would be April 2015. I hope that the Minister will bear that in mind in her response.

[Lord Deben]

My Lords, I have a real difficulty with the amendment because it seems to be another example of trying all the time to limit localism. There are too many mechanisms for that. One is to stop it being localised in the first place and the other is to make it so difficult for people by having to report in so many ways that you remove the whole advantage.

For me, the advantage is that localities make their own decisions. If there are circumstances in which the Secretary of State feels that concern is so widely held that he ought to find out more about it, he has all the powers to do that. We really do not want a situation where every time we give powers to localities, the clever Dicks from the centre say, “We can’t let them get away with it. We have to have a whole series of ways to make sure that they report on everything”.

My real objection is that this is all part of a pattern that we have seen for years. We promise localism, but do not quite give it to them. If we get away with a bit of localism, then let us make sure that that there is a whole lot of reporting, measurement and all the rest of it. I would like local authorities to make their decisions about this. Only if there is a real reason and a real concern should we take any further action at all. When there is a real reason and real concern, I am all in favour of immediate action, but putting this sort of thing into operation is otiose.

Local Government Finance Bill

Lord Shipley Excerpts

Monday 16th July 2012 Grand Committee

[Baroness Lister of Burtersett]

My Lords, it is always a pleasure to follow the noble Baroness, Lady Browning. What I have to say follows on very well from what she said. My noble friend Lady Sherlock asked some searching questions of the Minister. I want to pick up on the one about cumulative impact. Ringing in my ears are the words of the late Lord Newton, who reminded us in proceedings on several Bills that we have to look at these pieces of legislation together, not separately—yet we always look at them separately.

I have just been reading two relevant reports, which I would like to bring to noble Lords’ attention and which emphasise the question of cumulative impact. One is from Demos and Scope, and says:

“Disabled households are not benefits recipients—they are parents, employees, students, home owners, older people and citizens. They rely on the same diverse range of services as everyone else, but the Government’s failure to grasp the whole picture beyond the welfare reform agenda can lead to an underestimation of the cumulative impact these hundreds of individual cuts can have on each multi-service-using household”.

We are now potentially adding to those cuts, which is why it is so important that there is a proper impact assessment that takes the cumulative impact into account.

The other report, by Citizens Advice and the Children’s Society, says:

“We are very concerned that the scale of the cuts in support for some groups of disabled people has not yet been properly understood, because the changes have been viewed in isolation”.

Again, the danger is that we view the changes here in isolation.

The other point that I want to make refers to carers, who tend to get overlooked constantly. I was slightly bemused because the impact assessment referred to carers as one of the vulnerable groups that local authorities need to take into account, yet the DCLG document, Localising Support for Council Tax Vulnerable people—Key Local Authority Duties, does not seem to mention carers as a group whose needs need to be taken into account. Could the Minister explain which of the two documents local authorities are supposed to take account of, and why there is this inconsistency in the reference to carers as a vulnerable group?

[Lord Shipley]

I will make three very brief points on these two amendments. The first is simply to acknowledge that, given that council tax support is to be localised, it should therefore follow that local councils have the responsibility for deciding what their schemes entail. That seems a very important principle. We will debate later the role of the Secretary of State in defining any exclusions at all.

Secondly, a scheme agreed by a local authority would be inappropriate if it did not have regard to disabled people and carers, not least for the reason that it would not meet the need of an equality impact assessment if due regard had not been given. However, the list is not exclusive, and we shall shortly go further into the definition of vulnerability. One weakness of the Bill at the moment is that it does not actually define vulnerability adequately.

I agree absolutely with the noble Baroness, Lady Lister, on the cumulative impact and the Government’s understanding—and this is not a particular criticism of this Government, because it has always been the case. Governments are not very good at seeing the cumulative impact of their legislation and the whole picture. A number of us have become very reliant upon the Institute for Fiscal Studies and the Joseph Rowntree Foundation for pointing out some of these things to us, sometimes one would hope before the event but occasionally after the event as well. Governments should be smarter at understanding the cumulative impact of what they are doing.

However, in all this there is another option for local councils, which is to maintain their current schemes effectively and to make the cost of that a general charge on council tax. I might come back to that when we talk about vulnerability, because, where council tax will be localised, vulnerable people will have to be protected. How nice it would be if we had more than one additional band in the council tax banding—not just band I but maybe some further ones—because there is a real risk of redistribution occurring from those who are less well off to those who are better off, as the IFS and the Joseph Rowntree Foundation keep pointing out to us.

[The Deputy Chairman of Committees (Baroness Andrews)]

My Lords, there is a Division in the House and we will adjourn for 10 minutes.

--- Later in debate ---

[Baroness Lister of Burtersett]

I certainly do not want to be rude about local authorities. Some things should be locally determined, but this is not one of them. I am sure that my noble friend Lady Hollis will return to that much better than I could.

I want to raise one point that I know will cut absolutely no mustard with the noble Lord: the position of people who move between local authorities, which some government policies encourage them to do. If there is no national guidance on vulnerability, they will not know how they will be treated when they move from one authority to another. The researchers in the report that I quoted earlier by Demos and Scope, said that they were struck by an “oppressive sense of uncertainty” that many disabled people were living with which,

“clearly jeopardised their emotional wellbeing”.

Without clear guidance, that uncertainty will be aggravated.

It is not only disabled people who feel uncertainty; it is part of living in poverty. There is a sense of insecurity and uncertainty. At least national guidance would allow people to know how they would be treated when they moved from one authority to another.

[Lord Shipley]

Perhaps I may raise one issue that we have not pinned down yet: whether the failure to define “vulnerability” may prove to be a legal issue that could be challenged through judicial review? I would appreciate the Minister's guidance in reply as to whether the Government are really happy that the failure to define “vulnerability” may actually prove to be a difficulty.

I think that vulnerability includes the working poor. They may not immediately be regarded as a vulnerable group, but in terms of all the benefit changes in welfare reform that are being implemented, they may prove to be seriously vulnerable. The Secretary of State should issue guidance on what “vulnerable” means. I think back to several long debates in the Localism Bill about what “sustainable development” meant. It actually mattered that we reached a common understanding. Without a common understanding between different local authorities acting in the spirit of localism, which I applaud, I fear that you may end up with judicial review from organisations that believe that their council has not properly considered the definition of “vulnerability”. It would therefore be much better if the Secretary of State issued guidance. That guidance could be advisory as opposed to statutory, but there needs to be a government view about this. Otherwise, we will head for some difficulty in the months ahead.

Local Government Finance Bill

Lord Shipley Excerpts

Tuesday 10th July 2012 Grand Committee

[Baroness Sherlock]

But I hope that the letter will arrive any day now, despite the fact that I have never served as a councillor.

I do not support the principle of the localisation of council tax benefit—as my earlier speech may have made clear. Even if I did, under these terms I would not be happy about it. I would think that I had been sold a pup. One reason for differing views within local authorities—I hope that the Minister will help me understand this better—is that potentially there will be significant regional differences in the impact of this policy.

I will refer again to the report on council tax benefit of the Institute for Fiscal Studies. The IFS note that the pain of this cut will fall disproportionately on poorer areas. It states that in cash terms, the cut in funding will be larger in areas where council tax benefit spending is highest—the more deprived areas of Britain. The report goes on to point out that almost 90% of local authorities face a funding cut of between £10 and £25 per dwelling. It would seem that the risks described by other noble Lords are all downside. That must be of serious concern to local authorities. What does the Minister envisage happening? Will the Government be able to take account of the different positions?

I will give an example. The OBR forecasts a reduction in the number of people claiming passported benefits as a result of the combined effect of presumed economic growth and welfare reform—an increase, therefore, in the number of low earners. The effect on CTB would be to see fewer people claiming maximum council tax benefit or its successor, and more people claiming partial council tax benefit as a result of moving into work. Has any work been done by the OBR to see how even those cost assumptions would be? The most recent quarterly Northern Economic Summary from IPPR North showed two things that spring to mind. First, the number of young people not in education, employment or training is highest in the north of England, at 19%, compared to an average of 16% in England. Given the trends in youth unemployment, that could see more people moving into the unemployed category rather than out of it.

Secondly, the report found that the amount of time people are spending on jobseeker’s allowance is increasing. Almost half—47%—of those claiming JSA in the north have been doing so for more than six months. The average time people have been claiming benefits is more than double what it was during the previous 2008-09 recession. Here I am trying to tease out an understanding of whether the assumptions underlying the costings of the impact on local authorities, and the extent to which they have been future-proofed, have taken account of north-south divides and differences, and what assumptions have been made about changing patterns.

Finally—I will come back to this when we debate later amendments—the Minister will be aware that 85% of council tax benefit at the moment goes to the lower-income half of households, and that almost half goes to the lowest-income quintile. Inevitably, any cuts are bound to be borne by the poorest households. Given the combination of poor households and poor areas being hit, is the Minister not concerned about what will happen to the economies of those areas? I know from talking to at least one northern authority that such a significant proportion of its households are in receipt of a variety of means-tested benefits that cuts in the Welfare Reform Bill alone will, it is anticipated, produce a reduction of demand in the economy as a whole. Have the Government modelled any of those impacts on a regional basis?

[Lord Shipley]

My Lords, first, I do not share the concern of the noble Baroness, Lady Hollis, about the capabilities of local government and councillors. Councillors are perfectly able to produce fair and equitable council tax support schemes. However, one problem we have is that timescales are driving the publication of draft schemes very quickly. Inevitably, draft schemes that go out to consultation will be different. After all, lots of things that local government does are different. Council tax rates are different. It would not be surprising, given differences between local authority areas that there may be differences in council tax support schemes. However, timescales are likely to prove too tight. I think that there will be a problem over equalities impact assessments and the timescales that they require. I would prefer a start date of April 2014, but we will come to that in a moment.

The real issues remain financial support, the level of financial support going into those schemes, and the new burdens doctrine. Amendment 73A matters quite profoundly because we are having a debate about the 10% cut and how it should be applied, and I absolutely subscribe to the view that it cannot simply be loaded on to the working poor. I would prefer it, if it is to be applied, to be spread across council tax payers generally.

Secondly, it has become clear to me that 10% is at the low end of what the reality will be. It will be significantly higher than that and, for the reasons that my noble friend Lord Tope outlined, demand is likely to rise and the change of title from “council tax benefit” to “council tax support” is likely to produce more people applying for it. Economic conditions remain difficult and will continue being difficult for the next two to three years; therefore, more people are likely to be applying.

Thirdly, the fixed-grant system that the Government are likely to introduce seems dubious in terms of who will actually decide on which data the government estimates are based. I fear that the estimates of demand over the first two years of the scheme will prove to be understatement. Therefore, the Government should manage the risk. In the context of 28% front-loaded cuts in the current and previous financial years, which have had a great impact on councils’ ability to meet all their obligations, there is a major principle at stake. If we have a new burdens doctrine, it ought to be applied; otherwise there is no point in the Government having a new burdens doctrine. Given the sum of money involved—£500 million, 10% of the £5 billion annual commitment to council tax benefit—this is an acid test of whether the new burdens doctrine has a future.

I sincerely hope that the Government will look again at this whole issue. I have subscribed, in my role as vice president of the Local Government Association, to the view that if you are going to localise—we are trying to devolve and localise—it is entirely appropriate for local government to take responsibility for this. They are the ones who set council tax. Therefore, they are the ones who are capable and should be responsible for setting the level of council tax support, but they have to be able to do it in the context of knowing that that cash will be available and the risk will be managed against rising demand by a Government that is supportive of them.

[Lord Smith of Leigh]

My Lords, in principle I support the localisation of council tax benefit, but I do not support this scheme at all. It will have impacts, and my noble friend Lady Hollis has raised them clearly. She talked about the regional in-fighting that we will have. Certainly, we believe that it will be worse in the area that I represent and many other parts of the country—worse, even than the poll tax. When the poll tax was in place, it was relatively easy for me; I was only chairman of finance. When somebody came to me and complained about the poll tax, I could always say, “The Tories have introduced the poll tax”. We swept all the Tories off the council; it was very easy. But now, when they say, “What are you doing with my council tax benefit support?”, at the end of the day I will have to devise a scheme. That will be down to me.