Local Enterprise Partnerships: Funding

Baroness Penn Excerpts

Monday 11th December 2023 Lords Chamber

[Lord Leong]

To ask His Majesty’s Government what assessment they have made of the ending of local enterprise partnerships’ funding and the impact on local economic development.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

The Government are committed to empowering locally elected leaders to drive local economic development. From April 2024, government will support local and combined authorities to deliver the core functions currently delivered by LEPs; namely, the functions of strategic economic planning, business representation and ongoing delivery of specific government programmes. Revenue funding will be provided to local and combined authorities in 2024-25 to support this activity.

[Lord Leong (Lab)]

My Lords, Labour’s very successful regional development agencies were replaced with local enterprise partnerships in 2011. These will be abolished next year. From micro-businesses to multinationals, businesses cry out for certainty, consistency and competency, but, far from levelling up, all they get from this Government is chaos, confusion and closure. The best way to restore business confidence would be for this Government to shut up shop and call an election. Are these businesses wrong in their assessment?

[Baroness Penn (Con)]

Yes. I also disagree with the noble Lord’s assessment of RDAs. I would be interested to know, if they were such a successful way of delivering local growth, whether they would be re-established under future Labour plans. The Government are focused on empowering local leaders over geographies that make sense in local areas to deliver local economic growth. We are working to integrate the roles of local enterprise partnerships into local areas so that we have the best of both worlds, with local democratic accountability and strong business voices to drive economic growth.

[Lord Razzall (LD)]

My Lords, I well understand the arguments that the Minister made regarding the shifting of LEP funding. To return to the Question, which the questioner rather strayed away from and which is whether the Government are satisfied about the impact on local economic development, is the Minister satisfied that the existing schemes, which are often successful, will not be damaged? I am thinking particularly of the very successful work done by a number of combined LEPs on digital poverty and exclusion.

[Baroness Penn (Con)]

I assure the noble Lord that the Government are confident that, in integrating the work done by LEPs into local authority or combined authority areas, we will not lose the benefits of the great work done by LEPs since their establishment. The aim is to integrate that with local democratic accountability. It is part of our broader agenda on devolution and we will continue to see some of that great work delivered over similar areas to now.

[Lord Young of Cookham (Con)]

My Lords, is it not the case that, since the LEPs were set up in 2011, more and more of their functions have been transferred to mayoral authorities and combined mayoral authorities, and have been included in devolution deals, many more of which are still on the way? Is that not a more democratic solution than the unelected LEPs?

[Baroness Penn (Con)]

My noble friend is absolutely right. In taking this decision, we conducted an information-gathering exercise with local authorities and LEPs to understand the impact of our plans. That identified great overlap between some of the functions discharged by LEPs, local authorities and combined authorities, as well as confirming a high level of integration of LEP functions in mayoral combined authorities. That is why we are taking the direction of travel that we are. The Government’s view is that there is likely to be scope for both greater join-up and efficiencies, and clarity for the private sector, by these functions being discharged in a joined-up way, and greater local accountability.

[Baroness Wolf of Dulwich (CB)]

My Lords, LEPs and RDAs had in common that, while they referred to “local” and “regional”, they were, in fact, Whitehall appointed and Whitehall controlled. If their functions are gradually transferred to mayoral authorities, that will clearly take things closer to local enterprise, but it is not necessarily a great improvement if you move from a Whitehall bureaucracy to a mayoral bureaucracy. What is being done to ensure that these functions respond actively to local enterprises and to local and regional organisations, which are membership organisations and directly represent enterprises, businesses, communities and, indeed, consumers?

[Baroness Penn (Con)]

My Lords, the Government have published guidance for the transfer of LEP functions to local authorities. Further guidance will be issued in January. As part of our devolution settlements in different areas, there are also clear conditions around how business engagement should take place to ensure that the voices of local businesses and their representative organisations are well heard in those areas.

[Lord Haselhurst (Con)]

My Lords, is it not unusual that within local enterprise partnerships, some of those participating were rivals with one another? Is it not best to ensure that, after all this time, we take another look at Redcliffe-Maud and have stronger bodies and authorities, with more competent clerks, to make it a really good and efficient system?

[Baroness Penn (Con)]

One important aspect of moving LEP functions into local authorities and mayoral combined authorities is making sure they cover appropriate economic geographies so they can deliver for those areas. In having proper democratic accountability, it will be clear to local businesses and local people who is responsible for economic development in their area.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, is it not clear that in the Teesside mayoral area, on some of the economic development programmes, we have seen less democratic accountability and less transparency about what is going on? The Government instituted a review that was supposed to report in July on this and we have heard nothing yet. We want more electoral and democratic accountability and more transparency. When is the report going to come out?

[Baroness Penn (Con)]

My Lords, there has been a great deal of success in devolution to Teesside and the mayoral combined authority there. The noble Baroness is right that we have instituted a report into some of the processes that have been undertaken. I do not have a date for her, but we are looking at it very carefully and we will publish the report when we are in a position to do so.

[Lord Scriven (LD)]

My Lords, is the issue here not just talking about structural change to functions but the power of the functions themselves? The clear issue with saying that we are going to have proper regional economic development firing on all cylinders is that, in every country, every indicator shows that fiscal devolution is required, not just the movement of existing functions. Will the Government seriously look at fiscal devolution to ensure that proper economic development can happen in all regions across the country?

[Baroness Penn (Con)]

That is exactly what the Government are doing; they are seeking to combine the devolution of greater power with greater funding and greater responsibility for the funding. There are the trailblazer deals that look to integrate the different streams of funding for local areas into something much closer to a single settlement. That will allow those areas to make decisions at a local level about what should happen in their area.

[Lord Kirkhope of Harrogate (Con)]

My Lords, surely all this bureaucracy and red tape is not the answer for some parts of our country that are in need of development. As one of those involved in the establishment of development corporations in the late 1980s, I think we should be proud of such a model. Frankly, is it not about time we allowed local businesses and local people to have a stronger say in what they want to renovate and rejuvenate zones of that kind?

[Baroness Penn (Con)]

My Lords, by integrating LEPs into local authorities and mayoral combined authorities, we are looking to streamline the processes by which business can engage in their local areas. As a part of our devolution deals, we are also giving combined authorities the power to set up development corporations so they can use the voice of business to drive development and economic progress in their local areas.

Home-ownership Rates

Baroness Penn Excerpts

Wednesday 6th December 2023 Lords Chamber

[Lord Naseby]

To ask His Majesty’s Government what proposals they have to reverse the trend of falling rates of owner-occupation among the 25-34 age group.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

My Lords, the Government have a range of schemes to help people into home ownership, including First Homes, shared ownership and the mortgage guarantee scheme. We have raised stamp duty thresholds so that, for properties up to £425,000, first-time buyers pay no stamp duty and, for properties up to £625,000, they pay only 5% on the amount above the £425,000 threshold. We remain committed to making home ownership a reality for as many young people as possible.

[Lord Naseby (Con)]

I thank my noble friend for the Answer but, frankly, it is not working, is it? If home ownership is so fundamental to this age group, surely we should be more generous. First, we should remove stamp duty. Secondly, there should be a savings scheme so that people can save for a proper deposit in relation to the market price level. Thirdly, tax relief should be what it used to be, when I and others in this House bought our first houses, on the whole of the mortgage. Finally—I am quite prepared to help my noble friend on this—let us approach the mortgage lenders so that, when somebody starts on a mortgage, there is a discount from the mortgage lender in the first few years.

[Baroness Penn (Con)]

My noble friend puts forward a number of approaches to tackling this problem. I agree on a great many of them; that is why, as I pointed out in my Answer, we have cut stamp duty for first-time buyers. We also have a savings scheme in place to help people with their deposits, because we know that is another barrier. The lifetime ISA applies a 25% government bonus to the savings that people put into that scheme. As for working with mortgage lenders, we have the mortgage guarantee scheme, which looks to expand the availability of 95% mortgages in the market, and we have worked closely with lenders in the current market to ensure that those who struggle to pay their mortgages are properly supported.

[Baroness Taylor of Stevenage (Lab)]

My Lords, by abandoning the housing targets, the Government have made home ownership for young people an ever more distant dream. Hard-working young people are increasingly priced out of their areas, squeezed by rents and having their ambition to buy a house taken from them. Can I urge the Minister to reinstate housebuilding targets and to consider a new, more comprehensive mortgage guarantee scheme?

[Baroness Penn (Con)]

My Lords, since 2010, more than 2.5 million additional homes have been delivered and, since 2018, we have had four of the highest annual rates of housing supply of the last 30 years. We are building more homes, because increasing supply is fundamental to helping more people on to the housing ladder—but there is more to do. We have our new affordable homes programme, which will deliver even more affordable homes to buy and for rent to help people on to the housing ladder.

[Lord Young of Cookham (Con)]

My Lords, further to my noble friend Lord Naseby’s Question, I point out that average house prices in London are now 13 times average earnings, and multiples have gone up throughout the country. As a result, many people have to rent, even though they would prefer to be home buyers, because they cannot afford the deposit. Many now pay more in rent than they would on a mortgage. Therefore, in addition to the schemes mentioned by my noble friend the Minister, do we not need some more ambitious schemes to enable more of these people to achieve their ambition of home ownership?

[Baroness Penn (Con)]

My Lords, the Government completely recognise the issue that my noble friend has set out. The mortgage guarantee scheme is relatively new; it opened in April 2021 and was recently extended to June 2025. It extends the availability of 95% mortgages, which helps with that deposit issue because it reduces the amount that people need to save for their deposits. More than 39,000 households have been helped through that scheme already, and I expect many more to be helped in future. To give a sense of scale on the lifetime ISA and its predecessor—the Help to Buy ISA, our other main scheme to help with saving for deposits—I say that under the Help to Buy ISA we supported over 550,000 property completions, so these are not insignificant support schemes to help people in these areas.

[The Lord Bishop of Manchester]

My Lords, in cities such as mine of Manchester and Salford, in terms of home ownership, many people in this age group aspire to an apartment yet, however many years we are on from the Grenfell fire disaster, too many properties still remain unmortgageable. I am grateful to the noble Lord, Lord Greenhalgh, for the support he has given to campaigners over the years, yet still people cannot get a property because they cannot get a mortgage on it. When will the Government put an end to this scandal?

[Baroness Penn (Con)]

Let me reassure the right reverend Prelate that we continue to make progress on the cladding issue. It has gone on for too long; we have made significant changes to the legislation and other measures to address it, and we will continue to work until everyone in that position has the resolution they need.

[Baroness Thornhill (LD)]

My Lords, shared ownership is promoted by the Government and is designed to be a pathway to getting a secure home and a foot on the property ladder. Does the Minister agree with me and the HomeOwners Alliance that this is proving a very complex and confusing financial model, with several significant drawbacks. The Government are increasing the funding for this type of tenure, but what are they doing to analyse these shortcomings, not only to quantify them but to rise to the challenge of meeting them so that more people can access a home through this method?

[Baroness Penn (Con)]

My Lords, the noble Baroness is right that shared ownership represents an important part of our affordable homes programme and is an important part of helping first-time buyers, particularly younger first-time buyers, on to the housing ladder. We conduct extensive evaluations of our affordable homes programme and will always seek to learn what we can do to improve those schemes, including the users’ experience of them and whether their complexity creates problems further down the line. We will always look at improving where we can.

[Lord Brooke of Alverthorpe (Lab)]

My Lords—

--- Later in debate ---

[Lord Jackson of Peterborough (Con)]

My Lords, my noble friend Lord Naseby is undoubtedly right that the mortgage market is broken. Do we not also need fundamentally to look at the planning system as well as fiscal incentives via the Treasury, particularly for small and medium-sized builders that were wiped out in the financial crisis of 2008, so that urban extensions and new garden towns and villages can be delivered to provide much-needed residential accommodation for young working families and young people generally?

[Baroness Penn (Con)]

My noble friend is absolutely right that planning is key. Many measures in the Levelling-up and Regeneration Act are targeted at supporting the planning system. We also had announcements at the Autumn Statement about improving the efficiency of the planning system and putting more resources into it. My noble friend is also right about small and medium- sized builders; part of the key to supporting them is ensuring that, when we have more difficult market conditions, we continue that supply chain and increase supplies. For example, the affordable homes programme can provide an important role in making sure that builders do not go out of business in tougher conditions.

[Lord Brooke of Alverthorpe (Lab)]

My Lords—

[Lord Best (CB)]

My Lords, in the longer term it would clearly make homes more affordable for first-time buyers if there were enough homes to go round and current acute shortages were eased. In the short term, does the noble Baroness agree that it is ridiculous that so many young people pay more in rent to private landlords than they would pay for a mortgage to secure a home of their own if only they could persuade the banks and building societies to lend more sensibly? If she agrees, will the Government look at extending the new and useful mortgage guarantee scheme to reassure lenders and at the DWP’s support for mortgage interest scheme, which needs to be a benefit and not a loan, to pick up those rare cases where there are serious arrears?

[Baroness Penn (Con)]

My Lords, I have good news for the noble Lord on the first point. The mortgage guarantee scheme has been extended to June 2025 to allow more 95% mortgages to be available to first-time buyers. We have also made changes on support for mortgage interest. Since April, we have allowed those on universal credit to apply for a support for mortgage interest loan after three months rather than nine. However, it is right that it remains a loan rather than a grant in these circumstances.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, may I finally get in with a question? The noble Lord, Lord Naseby, mentioned the benefit of complete full relief on all mortgage interest that many of us had when we were purchasing. Why cannot young people have that?

[Baroness Penn (Con)]

My Lords, we consider all different routes to supporting young people into the housing market. One drawback may be that support is less targeted at those who face the greatest affordability challenges when getting into the housing market. We have sought to refine in our programmes over the years where we can get the biggest impact for the investment that we are making on behalf of the taxpayer.

Residential Leasehold for Flats

Baroness Penn Excerpts

Thursday 30th November 2023 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

My Lords, on behalf of my noble friend Lord Kennedy and with his permission, I beg leave to ask the Question standing in his name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

My Lords, I declare my interest as a leaseholder.

The Government are extending the benefits of freehold ownership to more home owners. Reforms in the Leasehold and Freehold Reform Bill will help leaseholders to buy their freeholds and will end the sale of new leasehold houses so that, other than in exceptional circumstances, all new houses will be freehold from the outset. For flats, the Government remain committed to reinvigorating commonhold to give developers and home owners a viable alternative to leasehold should they choose it.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank the Minister for her Answer. Of course, we welcome the reform of leasehold, but with 5 million leasehold properties in England, 70% of which are flats, there is disappointment that they are not included in the Bill. Also, it does not appear that the Bill bans the sale of leasehold houses, either. The Times is reporting that the Minister’s department did not have time to include the leasehold ban before the Bill was introduced this week. Can she please clarify whether it is the Government’s clear intention to ban leasehold? If so, when will we see the relevant clauses?

[Baroness Penn (Con)]

My Lords, I can reassure noble Lords that it is the Government’s intention to bring forward clauses to ban the sale of new leasehold houses within this Bill. We intend to bring forward those clauses during the Commons stages. When it comes to flats, on the other hand, reform is more complicated. They have shared fabric and infrastructure and therefore require some form of arrangement to facilitate management. This has traditionally been facilitated by a lease. Therefore, banning leasehold flats is inherently more complicated. We will be taking forward, at a later date, reforms to the commonhold system to allow that to replace the leasehold system.

[Lord Lisvane (CB)]

Does the absence of these clauses lead the Minister to draw a conclusion which has general application—that Parliament is asked to consider far too much legislation, to be proceeded with at far too great a pace?

[Baroness Penn (Con)]

I do not draw that conclusion. Leasehold reform is complex. We have consulted widely and are taking time to get things right. I understand the desirability of bringing forward these clauses as soon as possible for Parliament’s scrutiny and that is what the Government intend to do.

[Lord Young of Cookham (Con)]

My Lords, I very much welcome the provisions of the leasehold Bill, which provide a better balance between the interests of freeholders and leaseholders. However, the Bill does not do what Michael Gove said it would. He said:

“I don’t believe leasehold is fair in any way. It is an outdated feudal system that needs to go. And we need to move to a better system and to liberate people from it”.


He wanted to replace leasehold with commonhold, but the Bill does not even mention commonhold. So will my noble friend be surprised if some of us seek to amend the Bill to deliver what her Secretary of State actually wants?

[Baroness Penn (Con)]

My Lords, I have tried to learn not to be surprised by any amendments tabled to government Bills by your Lordships’ House, but I would like to reassure my noble friend that this Bill is focused on helping leaseholders now by making existing leases fairer and more affordable. We have focused on legislating where we can make a genuine improvement to leaseholders’ daily lives right away. For example, we are making it cheaper and easier for leaseholders to purchase the freehold of their building or a 999-year lease on their property and take control of their building’s management from the freeholder. When it comes to reforms to commonhold, we continue to consider the Law Commission’s report in detail to find the best way forward and we are committed to taking forward that additional work.

[Lord Goddard of Stockport (LD)]

My Lords, one of the most expensive consequences of being a leaseholder, especially in flats, is the service charges that freeholders can level against you. They are completely unregulated and can be totally exorbitant. Does the Minister agree that we need to abolish service charges, especially for flats, and replace them with a commonhold system, which would be much fairer for leaseholders and would stop unscrupulous freeholders from ripping off hard-working families?

[Baroness Penn (Con)]

I can reassure the noble Lord that the Bill does contain provisions to bring greater transparency around how service charges are brought for leaseholders, so that there is greater accountability for what those charges go to and leaseholders have a greater ability to challenge them if they think they are unfair.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, as the Minister will know, the most frustrating thing for those of us who are leaseholders is the lack of control. There is a tried and tested formula for residents’ control, which is recognised in the Bill, and that is freehold. At the very least, will the Government consider a really simple, cost-free change to the Bill, which would be a mandated share of freehold for all new flats? That would at least prove that they are really committed to tackling the issue of getting rid of toxic leasehold for ever.

--- Later in debate ---

[Baroness Penn (Con)]

My Lords, as I have said, we believe that commonhold provides a potential way forward to move away from leasehold for flats, but there is reform of commonhold that needs to take place so that it will be fit for purpose. I reassure the noble Baroness, as I have others, that there are significant measures in this Bill that do exactly what she pointed towards, which is giving leaseholders greater control over the properties that they own and live in.

[Lord Adonis (Lab)]

My Lords, the wider problem, of course, is that there are far too few new homes, either leasehold or freehold. Is the noble Baroness aware that France, with a population of about the same size as ours, now has 12 million more homes than Britain, and has built more than twice as many new homes as we have over the last 13 years? There has been a net addition of 2 million homes, a high proportion for social lease. I know that Ministers are not talking to their European counterparts at the moment, but does she not think that learning something from our European partners could be valuable in tackling the housing crisis?

[Baroness Penn (Con)]

My Lords, the Government are absolutely committed to increasing supply. The noble Lord is right that that is part of the solution, particularly when we have in place the provisions to ban new leaseholds in new houses. But the Government are delivering on that promise. We are on track to deliver our commitment to 1 million new homes during this Parliament. We are investing £10 billion in increasing the supply of homes, and in the last few years we have seen some of the highest rates of home delivery in decades.

[Lord Cormack (Con)]

My Lords, will my noble friend convey to Mr Gove the most generous offer made by the noble Lord, Lord Young of Cookham, on behalf of the House, which was apparent from the reaction to his question? Why does she not tell him that this House can put right what he has not yet got right?

[Baroness Penn (Con)]

I am sure that this House will communicate its views to the department as we progress the Bill throughout the scrutiny. It will go through the Commons first and I look forward to debating the provisions in detail when it reaches the Lords.

[Lord Shipley (LD)]

My Lords, commonhold is used widely across the world, so why has it taken the Government so long to consider what works so successfully across the rest of the world?

[Baroness Penn (Con)]

My Lords, this Bill, and the other reforms that we have made in this space, are comprehensive and complex. We have taken time to look, consult and bring forward the proposals that will have the biggest impact on leaseholders today, while also committing to ongoing reform in the future.

[Lord Jackson of Peterborough (Con)]

My Lords, the Autumn Statement contained a commitment to take forward reforms to residential estate investment trusts. Will my noble friend take forward the support the House has for leveraging significant private sector funding into much-needed residential accommodation via REITs?

[Baroness Penn (Con)]

Yes, the Autumn Statement set out the way forward we are going to take on that issue. We need proper financing to support our ambitions for more homebuilding. Some of that comes through government support, but the private sector is a key partner here and we need to do everything that we can to unlock investment.

[Lord Kamall (Con)]

My noble friend mentioned there were complications in extending freehold to leaseholders in flats. She does not have to answer everything right now, but I wonder whether she could write to me, and deposit a copy in the Library, about some of those complications, so noble Lords can better understand those barriers to extending freehold?

[Baroness Penn (Con)]

I would be very happy to write to my noble friend but, as I said, in looking at the distinction between houses and flats, the majority of houses have always been provided as freehold, and there are few justifications for building leasehold houses. We have seen, in recent years, this practice being exploited by developers to levy unfair charges on home owners. Flats, on the other hand, have shared fabric and infrastructure and therefore require some form of arrangement to facilitate management. Traditionally, this has been facilitated by a lease, but, as we discussed, commonhold is an alternative way to do this.

General Elections: Party-political Spending

Baroness Penn Excerpts

Wednesday 29th November 2023 Lords Chamber

[Lord Rennard]

To ask His Majesty’s Government what assessment they have made of the case for increasing the maximum limit for political parties to spend at general elections.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

It has been a long time since campaign spending limits were last adjusted for inflation—some have not changed since 2000. This means that as prices rise over time the limits are, in effect, reduced. Parliament anticipated this when the limits were set, which is why the legislation allows for them to be adjusted to account for inflation. The Government have now begun making these adjustments to ensure spending limits are restored in real terms.

[Lord Rennard (LD)]

My Lords, none of the last five Governments has seen fit to increase these spending limits for political parties, so I wonder what was different about this Government? In the last five elections, only one party—the Conservative Party—has come close to spending towards the election expense limit, so why does it now have to be increased by 80%? Which party will benefit? Boris Johnson managed to win the last general election spending £16 million, so why do this Government seem to think that they need to spend up to £36 million to try to be re-elected? What will their donors expect in return for this cash?

[Baroness Penn (Con)]

My Lords, this is not an unusual exercise. In fact, uprating has been done under successive Administrations of all political colours and is done regularly for other matters too. It is provided for in the original legislation passed by this Parliament. By using those powers, we are simply restoring the levels of spending limits that were provided for by Parliament.

[Lord Swire (Con)]

What is the view of the Government about the allegations that some political parties or political operatives are seeking to lure away existing elected Members of the other place with promises of money? Is that something that the Government will be looking at?

[Baroness Penn (Con)]

I am not sure of exactly what my noble friend refers to. None the less, it sounds like a serious matter that I would want to speak to him about after this Question.

[Lord Watts (Lab)]

Given the past scandals of money going into the Tory party over the last few years and influence that has been given to those people as a result, should we not reduce, and not increase, this amount of money?

[Baroness Penn (Con)]

Perhaps the noble Lord will be reassured that a process of consultation went on in regard to uprating these spending limits. Members of the Parliamentary Parties Panel were first consulted by the Cabinet Office in 2020. Since then, we have uprated the limits for local government elections, which I believe has passed without problem. In September 2022, the Government again wrote to members of the panel. There is a need for change; some of these limits have not changed for over 20 years. We are simply restoring the levels that were previously set out in law by Parliament.

[Lord Hayward (Con)]

My Lords, in relation to the last question, the accusations of providing money in dubious circumstances have applied to all political parties, unfortunately, at one point in recent years or another. I refer my noble friend back to the answer that she gave. She identified that the limits have changed in local government; we are now looking at limits in national elections. Does that not confirm that it is about time that we looked at consolidating all election law so that we do not have to deal with these things in different stages? I am not asking my noble friend to make a commitment to do so, but I ask her to acknowledge and take the message back.

[Baroness Penn (Con)]

My noble friend is absolutely right that the procedure for uprating spending limits has to be done through multiple statutory instruments because different procedures are attached to different limits for different elections. I know that he has been a great advocate for simplifying and consolidating electoral law. I am sure that he will continue to advocate that, and I very much look forward to engaging with him on it.

[Baroness Taylor of Stevenage (Lab)]

My Lords, the Government’s rejection of amendments to the National Security Act means that foreign donations can still be made to political parties here in the UK. If the department is going to consider reviewing political financing, does the Minister agree that it is time to end this security loophole to prevent covert foreign donations to political parties?

[Baroness Penn (Con)]

My Lords, I believe that as a result of the debates on that Act the Government took forward a commitment to ensure information sharing between the police and other relevant authorities with a view to finding a way to improve that process. The sharing of information could improve the ability of relevant authorities to identify any individuals making or facilitating donations from foreign powers and sanction them. We have a commitment to report back to Parliament next year on that work.

[Lord Harries of Pentregarth (CB)]

In recent elections there has been concern on the part of non-political campaigning organisations about the limits on their expenditure. Have the Government reviewed what non-political campaigning groups are able to spend at election time?

[Baroness Penn (Con)]

I believe that the rules regarding third-party campaigning organisations will also be uprated as part of this work.

[Lord Wallace of Saltaire (LD)]

My Lords, there are a number of proposals for limiting the size of donations. Have the Government taken any issue with that? I have looked at the reports on donations for the first six months of this year, and the three largest donations to the Conservative Party were two individual donations of £5 million and one of £2 million. One was from a British-Egyptian national who was a Minister in a previous Egyptian Government and whose interests appear to be based primarily in Dubai. Another was from someone listed with Companies House as an Indian national— I assume therefore resident in London—whose interests are primarily in Thailand and Indonesia. Is it not time that the Government became much stricter on the size as well as the origins of individual donations?

[Baroness Penn (Con)]

My Lords, the Government have no plans to limit the size of donations made. We have procedures in place to ensure that there is transparency over those donations and, as we are discussing today, spending limits for candidates and parties in elections. That is how we govern the use of money in our political system.

[Lord Blunkett (Lab)]

My Lords, I hope that the House and the Minister will forgive me for asking a tangential question. Is it not time that the Government restored the special fund that put those with disabilities on an equal footing in campaigning in a general election?

[Baroness Penn (Con)]

I hope that the noble Lord will forgive me for acknowledging that it is a slightly tangential question; I may need to write to him with a fuller answer. I remember the establishment of the fund; it was established for very good reasons, so I am happy to take that away and look at it further.

[Lord Forsyth of Drumlean (Con)]

My Lords, further to the questions from the Liberal Benches, would they not carry more credibility if their party had not taken £3.5 million from a fraudster who is a fugitive from justice? Any respectable political party would have paid that money back.

[Baroness Penn (Con)]

My Lords, all political parties should seek to abide by the rules and, if they have not, they should definitely return the money that they owe.

[Lord Sikka (Lab)]

My Lords, general election spending is funded by big corporations and the rich. They do not actually donate money; they invest—they expect a return. In the interests of transparency, would the Minister consider introducing a law to require political parties to state what returns they have promised and to whom?

[Baroness Penn (Con)]

I completely reject the premise of the noble Lord’s question. We have transparency in our system so that people can see who donates to political parties. The alternative to donations to political parties is government funding of political parties and campaigning. That is not something that we on these Benches wish to see.

[Lord Cormack (Con)]

My Lords, in view of the influence that the press very often has on elections, will my noble friend the Minister read the admirable article by my noble friend Lord Hague in yesterday’s Times, which indicated that it would not be a service to democracy for one of our notable daily papers and one of our notable weekly magazines to be bought by foreigners?

[Baroness Penn (Con)]

I always enjoy reading articles by my noble friend and I will undertake to read that one.

[Lord Anderson of Swansea (Lab)]

My Lords, to prove the honesty of the intention of donors and the lack of any self-interest, would it not be a good idea to ask any donors of that sort to disentitle themselves from honours?

[Baroness Penn (Con)]

My Lords, that is an interesting question for all sides of this House. Donors to political parties of all colours make huge contributions to our society—not only to our political parties but to many other good causes. They are often leaders in their fields. We should encourage participation in our democracy and not discourage it.

Levelling Up: Project Delivery

Baroness Penn Excerpts

Thursday 23rd November 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

My Lords, the department has implemented several measures to support local authorities in their delivery of levelling-up projects. These include committing over £65 million for capacity support to unblock delivery issues and giving authorities greater flexibility over spending decisions. The National Audit Office report covers the progress of projects up to March 2023, and in the eight months since then the department has paid out over £1.5 billion of further funding to local authorities.

[Lord Kennedy of Southwark (Lab Co-op)]

I thank the noble Baroness for her comments. The report from the National Audit Office makes shocking reading: it tells of money allocated but not spent, contracts not signed and projects not delivered. Can the Minister explain to the House how a flagship programme of the Government is in such a mess?

[Baroness Penn (Con)]

My Lords, the report itself highlights a number of issues that have delayed some of the delivery, including rising costs and inflation and other outside factors. That is why we are working with local authorities to address those issues. As I say, in the eight months since the report, the department has paid over £1.5 billion of further funding out to local places. We have already seen several projects completed or near completion, which are making a difference to the lives of people in those communities.

[Lord Young of Cookham (Con)]

Further to the Question asked by the noble Lord, Lord Kennedy, the NAO was not entirely critical of my noble friend’s department. It did say that evaluation was better and that the grant management process had improved. But it also said that a number of projects would not be completed by the proposed deadline. Where there are good reasons for that delay, will there be some flexibility in those deadlines? Otherwise, some very worthwhile projects will be abandoned.

[Baroness Penn (Con)]

I thank my noble friend for drawing out some of the positives of that report, as there were indeed some. He is right that, while we are keen to see the delivery impact of this investment as soon as possible, there have been some delays. For example, we have talked about inflationary pressures, so for the levelling-up fund, the prospectus for both rounds 1 and 2 said that we expected all funding provided to be spent by March 2024 and March 2025 respectively. However, those deadlines can be extended by one year on an exceptional basis. Similarly, for the future high streets fund, we have given a six-month extension for the spend deadline, taking it to 30 September next year, giving local places additional time to deliver their transformational projects.

[Lord Shipley (LD)]

My Lords, I remind the House that I am also a vice-president of the Local Government Association. As has been pointed out, one of the reasons for the problems we have is rising cost pressures, both inflation and interest rate levels, and in some cases, of course, withdrawal of contractors. Will the Minister assure the House that, in such circumstances, it cannot just be an “exceptional case”? I quote the phrase that she used in her previous reply. The NAO has shown that there is an average delay of almost 10 months across projects as a whole. That is simply too much, and I ask the Minister to consider very carefully extra money to support the budgets of projects where there is a case and, secondly, for an automatic extension to the length of budgets, otherwise we will carry on having some of the problems that we have seen.

[Baroness Penn (Con)]

My Lords, as I have said, we are keen to see the delivery impact of the investment as soon as possible. That is why we have not moved to an automatic extension to the deadlines involved. However, we have moved to give local authorities more flexibility about how they spend their money without coming back to central government, to enable delivery. We have also put in place both more funding and more support to local authorities in the delivery of their projects, to help them meet their own deadlines.

[Lord Laming (CB)]

My Lords, the noble Baroness will know that some of the most difficult cuts in local government spending over the last decade were in the support for children and families. The probation inspectorate looked at the number of young people in secure accommodation and reported that many of these young people could be accommodated in the community with the right kind of support. That is not only in the interests of the young people but considerably cheaper. Could the noble Baroness do all that she can to make sure that the money that has been allocated is properly spent?

[Baroness Penn (Con)]

The Government are really focused on ensuring that the levelling-up funds deliver value for money and provide transformative outcomes for the local areas that they deliver for. The Government set out a really clear approach to the evaluation of these projects to make sure that they do just that.

[Lord Wigley (PC)]

My Lords, I draw attention to my interest chairing the slate quarrying levelling-up fund on Gwynedd Council, which is also facing the challenge of meeting the deadline of April 2025. If indeed the pressures arise from a systematic shortage—a capacity shortage—within the system, will the Government lean towards giving the flexibility of an extra year to ensure that worthwhile projects are not lost?

[Baroness Penn (Con)]

My Lords, as I have highlighted, the department is very happy to speak to any project that sees that it is facing perhaps unavoidable delays in delivery. Our first priority should be looking at what we can do to reduce those delays, but, as I have said, we have also put in place flexibility in the system to extend some of the deadlines.

[Lord Adonis (Lab)]

My Lords, will the noble Baroness tell the House how much damage to levelling up is being done by the cancellation of HS2 to Manchester? Is she aware that, once HS2 is built to Birmingham but not to Manchester, it will take 40 minutes from Euston to Birmingham but 2 hours and 10 minutes from Euston to Manchester? What does she think that will do to business investment decisions over the next generation, and does she not see that this will decimate the economic prospects of the north of England?

[Baroness Penn (Con)]

I am afraid I completely disagree with the noble Lord. There is a choice to be made about where that investment goes, and the Government have made the choice to invest in transport projects that will connect towns and cities within the north far better. It will deliver more improvements to more people faster than the continuation of further legs of HS2.

[Lord Scriven (LD)]

My Lords, is not the key finding of all this that centralised Whitehall one-off bidding is not the key to level up across this country?

[Baroness Penn (Con)]

My Lords, we deliver funding to local authorities in all sorts of ways. We are looking to deliver more funding to local authorities. That is why we are taking forward an approach of a single departmental settlement to those mayoral combined authorities in Birmingham and Manchester. We have a commitment to roll that out further to those areas that have directly elected representatives.

[Lord Sahota (Lab)]

My Lords, as the Minister knows, councils up and down the country spent millions of pounds preparing for their application to bid for the levelling-up funds. I am glad that the Government have changed the system now. Do the Government have any idea how many millions these cash-strapped councils have spent on preparing their applications—or maybe the Government did not ask that question because they did not want to know the answer?

[Baroness Penn (Con)]

My Lords, after announcing round 2 of the levelling-up funding, we recognised how many high-quality bids we had from councils that we were not able to meet during that round. That is why we took a different approach in round 3, looked at those existing bids and were able to make the allocations that were announced earlier this week. All in all, over 200 places have benefited from funding from the levelling-up funds. We recognise that there is a cost involved in bidding in these processes. That is why we provided those local authorities that were assessed as most in need in rounds 1 and 2 with additional funding to support the development of the bids in the first place.

[Lord Wallace of Saltaire (LD)]

My Lords, the Government have talked a lot about the need to reduce bureaucracy and to cut the size of the Civil Service. Yet this entire scheme is extremely bureaucratic and takes a great deal of Civil Service time for the competitive allocation of very small funds, and a great deal of local government time in preparing for competitive bids, some of which are unsuccessful. Has not the design been unfortunate? Would it not be better for the Government to do something about devolving spending decisions to local government in a much more thorough way?

--- Later in debate ---

[Baroness Penn (Con)]

My Lords, as I have set out, we took a different approach in round 3 of the levelling-up fund. Instead of having a competitive process, we looked at the existing bids that we had. That is all part of the Government’s funding simplification plan for local government that we published last year, which looks at streamlining the different forms of funding that go to local government, while making sure that it is spent in the most effective way, delivers value for money and that there is accountability for what is spent.

Levelling Up

Baroness Penn Excerpts

Wednesday 22nd November 2023 Lords Chamber

[Lord Stunell (LD)]

My Lords, this is a sad and disappointing Statement. It is another signal that levelling up, which was the flagship policy of the last Prime Minister but one, is on its dying breath. The Statement was delivered by a junior Minister in the other place. It rehashes announcements that have already been made. It glosses over failures of process and delivery, and it trumpets success when it is in full retreat. It starts with a boast about the £13 billion allocated to the levelling-up task, which is the same £13 billion that had already been announced five times before. But it overlooks what the National Audit Office said in its report published this week: much of the money will never be spent because of the overweening departmental bureaucracy and long ministerial delays in signing off projects with sponsors.

In fairness, the Statement does contain a sort of “sorry, not sorry” section about changing the process in the future, establishing a long-overdue but non-specific “funding simplification doctrine”, of which the noble Baroness just spoke. I am sure it will be a belter when it comes, but the benefit of the new doctrine will be lost by what is perhaps the most gobsmacking piece of double-speak in the Statement. Apparently rounds 1 and 2 have gone so well that, after learning from their successes, round 3 has been cancelled. Usually, back in the real world, if a project goes really well in its first two stages, everyone is eager to get on and do the third stage—but not this time. Instead, the approval threshold for projects is to be lowered and schemes previously rejected in rounds 1 and 2 will be reconsidered. There will be no round 3 and no chance for further bids to be submitted.

The National Audit Office reports that rounds 1 and 2 generated 834 bids, but three-quarters of them were rejected. I have no doubt that there will be some very good schemes among those rejected before that fully justify their approval now. Like the noble Baroness, I welcome the announcements made, but that has been done by pumping money originally intended for round 3 bidders back into the original pool for round 1 and round 2 bidders. This clearly demonstrates that the contention of these Benches was exactly right that the overall size of the pot was always minuscule compared to the need.

That leaves some of the most deprived councils, and the smaller and less well-resourced ones, stranded. They are the ones who did not bid in earlier rounds because they could not afford to take the risk of investing time and money in a bid that had only a 1:4 chance of success. Encouraged by the July announcement that a new and simpler process was ready to come into play, they have been ready to step forward and do so, but their chance has now gone. There will be no round 3, no new bids, and no levelling up for them.

I have two questions for the Minister. Will she publish the list of local authority areas that did bid in rounds 1 and 2 but will still not benefit from any funds from any of their bids, despite the clawback of round 3 money to help? I will call that list A. It would give a good map of where the Minister thinks that levelling up is not really needed. Secondly, will she publish a list of those local authority areas from which no levelling-up bids at all have yet been received? I will call that list B. That, I fear, would give a good map of small, under- resourced local authorities that have been left stranded by the cancellation of round 3 and are left out of the picture altogether. Publishing lists A and B would be a long-overdue first step to restoring transparency and trust to what, up to now, has been an opaque and desperately underfunded bureaucratic disaster. I look forward to the Minister’s answers.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

My Lords, I thank the noble Baroness, Lady Taylor, and the noble Lord, Lord Stunell, for their questions. I start by challenging a few of the assertions made in their responses to the Statement, particularly about underfunding and the minuscule amounts of money that have gone into this project.

Levelling up is at the heart of this Government’s mission: it has been backed with significant financing through the levelling-up funds and a number of other initiatives, and we have seen more in the Autumn Statement today. For those areas that have bid into the levelling-up fund and have been unsuccessful, it is not the end of the story: we have an agenda across government, whether through devolution, investing in skills, investment zones, freeports, or a whole number of areas where opportunities continue for areas to receive funding for projects that are important to them. On Monday, 55 projects were announced, but the total is 271, which is not an insignificant number of bids. These were across the country, representing areas that are diverse but also in need of this funding.

I also address the point around smaller, less well-resourced councils that felt unable to bid in earlier rounds. Some funding was made available for those who would struggle to put together bids to be able to participate in that process, so that is not the full picture. Also, the feedback that we received on the competitive process for rounds 1 and 2 informed the approach that we took for round 3 and informs our approach to the funding simplification doctrine, which acknowledges the valuable contribution of competitions for driving value for money and identifying the best projects for certain programmes. We will continue to deploy them where they make the most sense, but we encourage the use of allocative approaches where they can best achieve specific outcomes while minimising demands on local authorities. At the heart of that doctrine is our commitment to value for money, which will drive decision- making on the most appropriate choice of funding mechanism.

The Government have responded to the feedback they had in earlier rounds of the levelling up fund in their approach to round 3. I reject the Liberal Democrats’ proposition that the 55 projects that received funding in this round are somehow of lesser quality than projects that received funding in previous rounds. In fact, we found that a very high number of very high-quality projects had bid into this system, which allowed us to return to those projects for round 3 and make great allocations for very well-deserving projects. To reassure the noble Baroness, we touched base with local areas to ensure that those projects continue to be priorities for them and deliverable. However, having made the formal announcement, we will also recontact every single one of those successful local authorities to reconfirm that they are projects that they would like to pursue and, on the delivery point, meet a delivery timetable that is achievable given the changing circumstances.

Those changing circumstances were a factor acknowledged in the National Audit Office report. We have faced a time of high inflation, particularly for capital projects, and labour shortages. We also acknowledge some challenges in the way we ran the process in government too, so we welcome the work that the NAO has done and have taken significant action to address the points it made. I point out that the data that the NAO used in its report was cut off in March 2023 to allow it to analyse consistently across three different projects that the Government have been running. Since then, we have released a further £1.5 billion of levelling-up funding through the programme, so significant progress has been made.

We have also made changes to how the projects are run—for example, allowing greater decision-making for local authorities to flex their delivery programmes to meet the new circumstances they find themselves in. We have also made £65 million available to ensure that local authorities have the capacity to deliver the levelling up fund projects that they have successfully bid for. The Government acknowledge some of the challenges in the National Audit Office report. We have already taken steps to address some of those points and seen a significant increase in the amount of money disbursed.

Finally, on the funding simplification doctrine and what it will mean, it is a doctrine that will apply from central government to local government in its approach to levelling up. That is primarily from the Department for Levelling Up, Housing and Communities, but it applies across other departments’ delivery of and commitment to our levelling-up agenda with local authorities. We will evaluate the simplification pathfinders as quickly as possible. In all the work we are doing on these new projects and programmes, we seek to learn the lessons from them as we go along, ensuring that we have robust evaluation processes in place that allow us to continue to make these modifications and improvements as we deliver our levelling-up agenda across the whole of the United Kingdom.

[Lord Young of Cookham (Con)]

My Lords—

--- Later in debate ---

[Baroness Taylor of Stevenage (Lab)]

There is time. I asked questions about Northern Ireland, about inflation and about impact assessments. May I have a response to those in writing?

[Baroness Penn (Con)]

My apologies; I think I answered about the impact of inflation and the fact that we have adjusted the project delivery processes to help take that into account with local authorities. The pathfinders are under way and we will assess the outcomes of those as soon as we can, but I also said that we will seek to learn the lessons as we are implementing, not just waiting for the final evaluation at the end of the process.

On Northern Ireland, the noble Baroness is absolutely right that there were no allocations in round 3 of the fund; I reassure noble Lords that this funding has not been reallocated to other parts of the UK and will remain reserved for and be provided to Northern Ireland. We will continue to work closely with the projects that have already been awarded the £120 million in the first two rounds of the fund. We are working towards the restoration of the Northern Ireland Executive and will work with a restored Northern Ireland Executive to find the best approach for them going forward.

I am happy to have another look. If there are any points that I have missed, I will make sure that I write to both noble Lords on them.

[Lord Young of Cookham (Con)]

I apologise to the noble Baroness, Lady Taylor, for barracking her when she quite rightly asked a supplementary question. I warmly welcome my noble friend to her new responsibilities and say how much she will be missed at the Treasury. We hope she will be able to adopt a less restrictive approach to her new portfolio than the one she was obliged to adopt at the Treasury.

Many of us found the tone of the earlier intervention somewhat grudging, and I know these funds will be warmly welcomed by the communities to which they are targeted. Will my noble friend confirm that it is the Government’s firm policy to streamline all these different pots of money which go from central to local government, and really have proper devolution? The Statement mentions the levelling up fund, town deals, the shared prosperity fund, the future high streets fund and others. Can we streamline things without having a fund simplification pathfinder pilot? Perhaps it could be simpler than doing that.

Finally, the Statement refers to new funds and the principles that could be applied to them. Do we really need any new funds, given the ones we already have? The objective should be to reduce rather than to add.

[Baroness Penn (Con)]

I thank my noble friend for his warm welcome to this role. I reassure him that the department is absolutely committed to simplifying our funding approach when it comes to levelling up and local authorities. I reassure noble Lords that the funding simplification doctrine will be implemented from 1 January next year. Its aim is to embed our commitment to simplifying the funding landscape by ensuring that government departments consider the principles of funding simplification when designing new funding for local authorities. To the noble Baroness’s point, the idea is that it extends beyond the reach of my department alone. The doctrine will cover all new funds that are made available exclusively to local authorities by central government, but it excludes funding within the local government finance settlement and services mandated by statute. That gives a better idea of the shape of that approach.

However, it is right that where there are specific problems that may need to be addressed with specific parameters, the concept of a new fund is not entirely ruled out from that approach. The pathfinders, which are important in allowing us to make sure we learn as we go and then apply the approach more generally, are looking at what flexibilities can be applied across those different funding streams, and at putting local authorities in the driving seat in identifying where their priorities are and using the funding made available from central government more flexibly.

[Lord Walney (CB)]

I refer your Lordships to my entry in the register as director for the Purpose Business Coalition’s levelling-up goals. Are the Government still committed to the 12 medium-term missions set out in the levelling up White Paper of February last year? If so, what is being done across Whitehall to drive those missions? Will there be the annual update on them that was promised in that White Paper?

[Baroness Penn (Con)]

I assure the noble Lord that we are absolutely still committed to those 12 missions. There is a huge amount in today’s Autumn Statement that shows our commitment to delivering some of them—for example, through the allocation of further money to levelling-up partnerships and investment zones and pursuing greater devolution. We are taking other measures—for example, legislating to create a smoke-free generation that will help deliver the health and life expectancy-related missions—so there is work across government that will continue to deliver on those 12 missions.

[Lord Naseby (Con)]

Is my noble friend aware that, if we go back in time, the concept of levelling up when I was the leader of the London Borough of Islington was never even thought about? This is a huge step forward as a concept. When I first became a Member of Parliament, I represented a fourth-stage new town. The lessons learned between the experiences of first-stage new towns right the way through to the fourth stage were huge. The fourth paragraph of the Statement states:

“For instance, we have given local authorities greater freedom to adjust their town deal, future high street and levelling up fund projects”.


That is central today. Can my noble friend make sure that towns that have done it well are given huge publicity so that others can learn from success?

[Baroness Penn (Con)]

My noble friend makes an important point about learning as we go and understanding what is effective in delivering our mission to level up. We have put in place comprehensive plans and published how we will approach evaluating the success of some of these projects. Of course, as part of that we want to publicise those projects that have had the biggest impact so that not only do they get the recognition that they deserve but others can learn from them.

[The Lord Bishop of St Albans]

My Lords, I declare my interests as president of the Rural Coalition and a vice-president of the LGA. The 9.6 million people living in rural areas are glad that there is a mention of rural in the opening paragraph, but we cannot quite see how that rolls out. I wonder whether the Minister can help us a little. One of the crucial things about rural sustainability, improving levels of employment and offering healthcare in rural areas is digital connectivity, yet 17% of rural houses are not on superfast broadband, and nor are 30% of rural commercial premises. How does this relate to the need across the country to roll out a much higher level of rural connectivity? It has been done with a fantastic project in Cornwall and a lot was done in Shropshire at one stage, so it can be done. How do we get that sort of rural levelling up in digital connectivity?

[Baroness Penn (Con)]

The right reverend Prelate makes a really important point. I know that the Government have significant ambitions in rolling out access to superfast broadband and making sure we cover off the last mile, as it were, to the harder-to-reach places. I am not familiar with the detail of that programme as it lies in another department, but I will of course write to the right reverend Prelate about how we are doing on delivering that digital connectivity, in particular in rural areas.

[Lord Weir of Ballyholme (DUP)]

My Lords, can I press the Minister a little further on the situation as regards Northern Ireland? The rationale given by the Government for not announcing allocations to Northern Ireland in this round is the absence of a fully functioning Northern Ireland Executive, but that does not hold water for two reasons. First, these are allocations to local government authorities—I speak as a former president of the Local Government Association in Northern Ireland—and in Northern Ireland local councils have been functioning throughout. That has remained unchanged within Northern Ireland for decades as they are continually operating. Secondly, the Government did make allocations to Northern Ireland in the previous round in 2022 when, similarly, there was no Northern Ireland Executive functioning. Can the Minister explain why there has been a change in the position as regards the funding allocations to Northern Ireland between 2022 and 2023?

[Baroness Penn (Con)]

My Lords, the noble Lord is absolutely right that there was funding under previous rounds. However, it is right that the UK Government take a cohesive look at where investment is needed and, given the budgetary position faced by the Northern Ireland Executive and the absence of devolved institutions, we need to look at that very carefully. That relates to his question because the longer we have an absence of any Executive in place, the more keenly we feel some of those pressures and the need to be able to take those decisions in the round. As I have said, this funding remains there for Northern Ireland; it has not been reallocated elsewhere. We are extremely keen to work with the Executive as soon as possible when they return, so that we can address all the challenges that face public services in Northern Ireland.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I declare my positions as a vice-president of the Local Government Association and the National Association of Local Councils. The Minister has used the phrase “committed to simplifying” a number of times. Would the simplest thing not be for Westminster to get out of the road and simply agree a funding formula to the areas of the country most in need of what has been identified as levelling up—areas with the lowest healthy life expectancy or the worst levels of child poverty? Should it not allocate a multiyear long-term funding stream to those areas to allow them to decide what projects they want to spend money on to improve the life of their communities? Is it not wildly inefficient, not to mention rather curious in light of the number of Tory-held constituencies that end up with funding—perhaps currently Tory-held is a better term—not to have a fair and transparent system, perhaps even one that could be agreed across all political parties, so that people could be confident that this would go on for the long term and local communities could make decisions for themselves and invest consistently?

[Baroness Penn (Con)]

I absolutely reject the noble Baroness’s assertion that this funding has been allocated in an unfair or untransparent manner. Alongside the projects that have received funding, we have published a clear methodology note about how we have approached the allocations. Although I may have heard worries about the pace of delivery and the amount of money available, I think that overall both Front Benches opposite welcomed the announcement that we made on Monday. On the overall approach to local government finance, we have a system at the moment that recognises needs. It means that those councils with the most deprived households within them get 17% higher funding per dwelling than those with the fewest. I recognise the calls for wider reform to local government funding but noble Lords will know that, in the wake of Covid and other uncertainties, this Government made a commitment that while we should press ahead with that, it would not be for now but for the next Parliament.

[Lord Scriven (LD)]

My Lords, I welcome the Minister to her post and I will be quite parochial. As somebody who was born in Huddersfield and now lives in Sheffield, I welcome the allocation that has been made to the Penistone line. But living in Sheffield, which is the fourth-largest city in England, our eyes roll when there is talk about levelling up because in the middle of this levelling-up agenda, our direct train between Sheffield and Manchester Airport has been taken away. How does it contribute to the levelling-up scheme when a train from a main airport to the fourth-largest city is taken away in the middle of that? What pressure will the Minister now put to bear in her new role to ensure that the train is reinstated? The reason for taking it away was because of rail infrastructure issues and it is really important that the train is reinstated, particularly if levelling up is going to take place between those two great, dynamic cities.

[Baroness Penn (Con)]

Perhaps, given the strength of feeling that the noble Lord has on this issue, I could undertake to find out more about the rationale for that decision and write to him in particular on it. More broadly, one decision that we have taken recently, which I know has not been popular across the whole House, has been to not continue with the further leg of High Speed 2, to enable us to make sure that we are investing in transport projects that will provide greater connectivity to more people faster than would happen under the plans for the next leg of HS2. That shows this Government’s commitment to levelling up.

[Lord Berkeley (Lab)]

My Lords, perhaps I could ask the Minister a bit more about the costs to the local authorities that have been successful. Of course, I welcome all that. I have been involved in watching a very large award from the first round to the Isles of Scilly for a new ferry, and I am very grateful to the Government. But the cost of doing a strategic outline business case, an outline business case and then a proper business case was so high that, in fact, the Government have very generously allocated some extra funding to enable the councils to do it. This must apply to many other small councils in receipt of these bids. If they cannot afford to prepare the documentation for the next stage, or even to get there—because they will not get the money until the final business case hurdle is done—is there any way that the Minister can simplify the process without, of course, affecting the normal procurement rules of government?

--- Later in debate ---

[Baroness Penn (Con)]

The noble Lord has pointed to one of the solutions in his question. In some circumstances, it might be appropriate for government to provide support to those councils or areas that struggle the most with the process to give them the capacity to engage with it in the first place. However, there are also things that we can do to try to simplify the processes that local authorities go through, while still ensuring that quality is maintained. We can simplify them—or, for example, in our approach to monitoring and evaluation of a lot of these projects, we have taken the decision to remove the local obligation to undertake that and will provide a central function to do it. So we can provide central support for local government and we can provide direct funding to local government to be able to engage and participate, but we can also simplify the process to try to remove the costs and drive value for money.

[Lord Liddle (Lab)]

I am so glad to see the noble Baroness in her new place. Do the Government agree with the analysis of Andrew Haldane, the former chief economist of the Bank of England and now director-general of the Royal Society of Arts, that one reason why Britain’s growth and productivity performance is not as good as it should be is the widening regional differentials in England between London and the south-east and the city regions of the north? If the Minister does agree, what conclusions does she draw about what kinds of policies are likely to be most effective in closing that gap?

To speak personally, when I look at quite a lot of the projects that have been approved, they are smallish-scale projects worth £10 million to £20 million, a lot of which are designed to improve town centres. I am in favour of repurposing town centres, but I do not think that we can ever take them back to where they were. Should we not be looking for big, transformative projects? Of course, that is why the cancellation of HS2 was such a big blow.

[Baroness Penn (Con)]

My Lords, I agree with that central point: that is what is driving the whole mission behind our work to level up. We need to do both of the things that the noble Lord talked about. We need to fund projects that restore pride of place to towns where people live and give a strong sense of local community, but we also need to fund those larger-scale transformative projects. The amount of funding, for example, that has gone into transport projects in mayoral combined authorities and other areas over recent years is very significant. We also have projects to develop investment zones and freeports, for example. So we should not see the levelling-up fund, and the projects that take place through that, as the only way in which we are delivering our agenda.

On the point about funding, whether it is for large or small projects, I will just add that it is also about devolving power—something that the noble Baroness mentioned at the very outset. Today, in the Autumn Statement, we have confirmed four new devolution deals for Greater Lincolnshire, Hull and East Yorkshire, Cornwall and Lancashire. We are also deepening the settlements for our existing institutions, because we need both power and money to flow down to local areas so that they can level up.

[Baroness Bennett of Manor Castle (GP)]

My Lords, since we have time, and since the Minister is getting to grips with her new portfolio, I will raise a somewhat conceptual point. Has the Minister considered that levelling up also means that there is a counteracting force, namely the concentration of power, resources and development in London and the south-east, which they are struggling to cope with? In Cambridge, for example, a proposed development of 1,000 homes was recently turned down because there was not enough water supply for those homes. Does the Minister see that continuing overdevelopment—the pushing of money and resources into London and the south-east—is a countervailing force to attempts to level up?

[Baroness Penn (Con)]

I do not think that that is the way in which I will be approaching my new department and role. I think we can both continue to invest in London and the south-east as great places to live and work and an important part of our economy and also invest in levelling up across the rest of the country. I acknowledge, however, that when you have denser populations and more competition over resources, it adds pressure. Those are different forms of problems that big cities, with high development needs, might need to address versus rural areas, as was highlighted by the right reverend Prelate. We need the right approach for the right area, which is part of what devolving power allows us to do.

Local Government Finance

Baroness Penn Excerpts

Tuesday 21st November 2023 Lords Chamber

[Baroness Taylor of Stevenage]

To ask His Majesty’s Government what assessment they have made of the impact on local government finance of increasing demand for emergency and temporary accommodation.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

Local authorities deliver vital homelessness services and we recognise that the increasing demand for temporary accommodation places pressures on councils. That is why, taking together the 2022-23 and 2023-24 local government finance settlements, we have increased the funding available to local government in England in real terms. In addition, we are providing over £1 billion to councils over three years through the homelessness prevention grant.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I welcome the Minister to her new role and greatly look forward to working with her. Please can we express our very best wishes to the noble Baroness, Lady Scott, for her continuing recovery?

There has been a rapid and dramatic increase in homelessness, with over 104,000 households currently in temporary accommodation—the highest number since records began in 1998. This created a budget pressure of £1.6 billion for councils in 2021-22. So many well-respected sector experts, including the Local Government Association, the District Councils’ Network, Citizens Advice, Crisis and London Councils, have made representations to the Chancellor in advance of the Autumn Statement, pointing out that the key drivers of this increase are the failure to upgrade local housing allowance in line with inflation and a spike in Section 21 evictions. What assessment have the Government carried out of the impact of the freeze on local housing allowance?

[Baroness Penn (Con)]

My Lords, as with all benefits, we keep the local housing allowance under review. The noble Baroness also mentioned Section 21 evictions, which, as she knows, are being reformed through the forthcoming Renters (Reform) Bill that is making its way through the other place and which we will see here shortly. I return her welcome and look forward to working with her across the Dispatch Box. I also look forward to my noble friend Lady Scott joining me back on the Front Benches soon.

[Lord Scriven (LD)]

My Lords, throwing asylum seekers out of hotel accommodation at short notice only moves the issue to local councils, which are legally obliged to accommodate asylum seekers while their asylum applications are processed. What assessment have the Government made of the total cost of this unacceptable cost-shunting to local authorities?

[Baroness Penn (Con)]

My Lords, I would not agree with the noble Lord’s characterisation of the situation at all. While people’s asylum applications are being processed, they are in Home Office-provided accommodation. Some of that accommodation is hotel accommodation, which is in no one’s interest—not that of the people who are accommodated there nor that of the taxpayer. The Government are working hard to reduce the backlog in asylum applications and to move people on from hotel accommodation. My department is working closely with the Home Office and local councils to make sure that that process is as smooth as possible.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, Lord Campbell-Savours is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

Why should people pay inflated rents to private landlords who are coining it in conditions of scarcity? Is not the answer to secure selectively land for housing development at agricultural prices, as has happened in parts of Europe, in particular Germany, and to back up that land purchase policy with a mass building programme of housing for both rent and purchase, but under a new form of title which restricts speculative gains and yet protects the value of freehold title? Speculative markets in land are denying millions a home.

[Baroness Penn (Con)]

My Lords, I believe that part of the solution to this problem is an increase in supply and quality in the private rented sector, which our Renters (Reform) Bill will help to deliver, and also in the affordable housing and social housing sectors. That is why this Government have put so much money into the affordable housing programme, to increase the supply of that housing and relieve the pressure that we see on temporary accommodation.

[Baroness Lister of Burtersett (Lab)]

Following on from the question asked by the noble Lord, Lord Scriven, will the Minister impress on her colleagues in the Home Office the urgent need to review the current operation of the move-on period for newly recognised refugees, which is forcing many of them into rough sleeping and homelessness? They have been given as little as seven days’ notice to quit their Home Office asylum accommodation, with serious knock-on effects on local authorities also.

--- Later in debate ---

[Baroness Penn (Con)]

As I said to the noble Lord, Lord Scriven, my department is working closely with the Home Office and local councils to ensure that the process for moving people on from hotel accommodation is as smooth as possible. As I also said, we recognise that the work that we are doing successfully to reduce the backlog in asylum claims puts pressure on other parts of the system, which is why we have increased resources there too.

[The Lord Bishop of St Albans]

Both the noble Lord, Lord Scriven, and the noble Baroness, Lady Lister, have raised the really troubling issue of asylum seekers leaving accommodation and being made homeless. In the Government’s strategy, Ending Rough Sleeping for Good, there was talk about having a transparent and joined-up system. What plans do His Majesty’s Government have to ensure that homelessness policy and asylum policy are working together so that we can minimise this dreadful problem?

[Baroness Penn (Con)]

My Lords, as I have said, my department is working closely with the Home Office and local authorities on this issue. Local authorities have already moved thousands of families out of bridging accommodation and into long-term accommodation. We are also providing £750 million to the local authority housing fund, which is being used to buy or create new housing stock to accommodate, for example, Ukrainian and Afghan refugees who have been offered refuge here and now need somewhere to move on to. But it will also help to improve temporary accommodation for families owed a homelessness duty. That is an example of some of the longer-term action that we are seeking to take to alleviate some of these pressures.

[Baroness Butler-Sloss (CB)]

Are the Government thinking of supporting prefab houses, and if not, why not?

[Baroness Penn (Con)]

My Lords, the Government are a big supporter of modern methods of construction, which I think is the broad equivalent of prefab houses. We seek to see more houses built using those methods of construction. As the noble and learned Baroness knows, it can be a very efficient way in which to produce new homes.

[Lord Naseby (Con)]

I welcome my noble friend to her new role. I suspect that every Member of your Lordships’ House is aware that there is a chronic shortage of accommodation and in the supply of social housing. Against that background, now that she is in a position to have a look at the whole of this area, I hope my noble friend takes time to do that, and see in particular whether we can bring forward more social housing to address the huge need that we have at this difficult time.

[Baroness Penn (Con)]

My noble friend is absolutely right that there are a number of different actions that we need to take to address homelessness. We have the action on homelessness prevention strategy and the rough sleeping strategy; that is backed by more than £2 billion over three years, in addition to the increase in councils’ core budgets that I mentioned at the beginning. But we also need to look at the underlying supply of affordable and social homes, which is why we have the affordable homes programme in place. We are committed that that will continue to deliver large increases in the number of affordable homes available in this country.

[Lord Sahota (Lab)]

My Lords, last year, local authorities spent £1.5 billion on temporary accommodation, which is up by 9% from the previous years. This is just one of the reasons that so many councils are on the brink of bankruptcy. When will this nightmare come to an end? It is cut after cut, since 2010. When will it end, and when will local government get some help?

[Baroness Penn (Con)]

The noble Lord talks about cut after cut. Since 2019, local authorities have had a real-terms increase in their core spending power, taking into account higher levels of inflation than anticipated at the time. In addition to that, we have provided money for the homelessness prevention grant and the rough sleeping strategy, and in addition to that we have provided the £750 million that I referred to in answer to the right reverend Prelate to begin to address some of the longer-term solutions to how we address housing supply in our country.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, there are avenues that the Government are not exploring. We have an increasing amount of retail accommodation which is now empty and an increasing amount of office space in many cities which is not being utilised. What is the Government’s policy around trying to put that to good social purpose? Why are they not thinking about trying to create public-private partnerships to use those, rather than worrying too much about looking to new builds?

[Baroness Penn (Con)]

My Lords, I believe that that is the case. The Government are committed to revitalising our high streets, whether that is rejuvenating existing commercial property or making the best use of it in the local circumstances.

Business and Planning Bill

Baroness Penn Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Tuesday 14th July 2020 Lords Chamber

I also support the call from the noble Earl, Lord Clancarty, for performers to be properly remunerated. These people want to work, earn money and ply their craft, and I hope that the House and the Government will be able to support them. With that, I look forward to the Minister’s response.

[Baroness Penn (Con)]

My Lords, the Government wholly support the intention behind the amendment to enable socially distanced outdoor performances. I assure the noble Baroness, Lady Jones, that, although I am not my noble friend Lord Greenhalgh, I have a great admiration for our cultural sector and for the performing arts.

I am delighted to refer my noble friend Lord Hunt to the Culture Secretary’s announcement last week that, from Saturday 11 July, theatres, dance and music have been able to restart as long as they are Covid secure, take place outside with a limited and socially distanced audience, and have the appropriate approvals from local authorities. To support our theatres and performance venues to get up and running safety, we have published new government guidance that provides detailed advice on how to keep all those working in the performing arts and audiences safe.

My noble friend Lady Anelay asked about that guidance. We have worked with the sector through the Cultural Renewal Taskforce and the entertainment and events working group to produce it. We will continue to engage with the sector on the basis. My noble friend raised advanced notice. So far we have published a five-stage road map, on which we are at stage 3, so venues and others can plan for future stages in advance of them being introduced. That guidance will evolve. We are working on some of the science behind safely reopening some of these venues. As that progresses, we will update the guidance in line with consultation with the sector.

Since outdoor performances are now allowed, local authorities can already issue licences where appropriate for such events under the provisions of the Licensing Act 2003 and existing authorisations will not have lapsed, the intention behind my noble friend’s amendment has been wholly achieved.

My noble friend made two further points in relation to his amendment. The first was that the inclusion of the amendment would signal the Government’s commitment to this vital sector. I completely agree with my noble friend that our creative arts are an intrinsic part of what makes us a nation. I hope noble Lords will agree that there are many routes by which the Government can demonstrate their support for the sector. The announcement of the £1.57 billion of support—the largest ever one-off funding package for the sector—demonstrates that commitment.

That funding will also be essential to address the points raised by my noble friend Lord Hunt and the noble Lords, Lord Kennedy and Lord Clement-Jones, among others, about support for freelance workers and others in the sector. It will enable organisations to resume cultural activity, albeit in a socially distanced manner, which will increase employment opportunities for freelancers. That is in addition to funding announced by Arts Council England in March of £140 million for artistic organisations and £20 million for individuals, including self-employed practitioners, to continue their craft. More than 10,000 individuals and organisations have been successful in applying for this emergency funding.

My noble friend also sought reassurance on the legislative underpinning for the reopening of outdoor performances, as did the noble Lord, Lord Clement-Jones, and the noble Earl, Lord Clancarty. This amendment is not needed to allow outdoor performances to take place, even in venues where they do not already take place. Local authorities can license outdoor performances already; this is underpinned by legislation in the Licensing Act 2003. I hope noble Lords will agree that it is not good legislative practice to duplicate this provision through additional legislation. It might also be worth noting that we are not planning to put in place underpinning legislation for the reopening of every sector of our economy, however significant the default is that those sectors should be open and that is what should be in place.

I hope that this addresses most of the points raised by noble Lords. I apologise to the noble Earl, Lord Clancarty, for being unable to hear part of his contribution, particularly about the role of local councils, due to technical difficulties. We will of course continue to engage, but on the point of legislative underpinning compared to this Bill, we are not aware of any representations, for the process of applying for temporary events notices for example, which in any case is a shorter timescale than pavement licences, which are dealt with in the Bill. For these reasons, I am unable to accept this amendment, and therefore I hope that my noble friend can withdraw it.

[Lord Hunt of Wirral [V]]

My Lords, I am very grateful to my noble friend Lady Anelay of St Johns, the noble Baronesses, Lady Jones of Moulsecoomb and Lady Bowles of Berkhamsted, the noble Lords, Lord Clement-Jones and Lord Kennedy of Southwark, and the noble Earl, Lord Clancarty. We have spoken with one voice, and I greatly welcome the Minister’s commitment to our intention. As she said, legislative underpinning is the key. We are providing the hospitality and construction sectors with that legislative underpinning. The performing arts deserve similar recognition. I will return to the subject, but in the meantime, I beg leave to withdraw my amendment.

Business and Planning Bill

Baroness Penn Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 13th July 2020 Lords Chamber

[Lord Kennedy of Southwark]

My Lords, this group contains two amendments: Amendment 42, in the name of the noble Baroness, Lady Anelay of St Johns, and the noble Earl, Lord Clancarty, and Amendment 78, in my name. These probing amendments seek to highlight wider issues surrounding support for the hospitality sector. As we heard in the debate, the industry desperately needs government backing to see it through the coming months, which is why this House is supporting the Bill and why it is seeking improvements to make it even better.

I welcome Amendment 42 and entirely agree with the comments of the noble Baroness and the noble Earl. The amendment introduces the requirement for a review of support. Given that these are labour-intensive businesses, we should bear in mind that there is an enormous unemployment risk if businesses in this sector collapse.

Amendment 78 in my name aims to start a debate on two issues plaguing the hospitality sector, the first of which is lack of consumer confidence. Many people are still cautious about visiting hospitality venues, and the Government must play an active role in encouraging customers to return safely. The second issue is rent disputes. One large pub chain told us that disputes between tenanted pubs and their owners are still unresolved and there is no effective mechanism to fix this. I hope the Government can explain how they will encourage consumer confidence to help people return to pubs.

Obviously, this is a probing amendment that highlights these issues and seeks a government response regarding how they see these points being resolved in a satisfactory way that keeps businesses open, staff working safely and customers coming through the doors, reassured that they can enjoy themselves and spend money safely. I look forward to the Minister’s response.

[Baroness Penn (Con)]

My Lords, I thank my noble friend Lady Anelay, the noble Earl, Lord Clancarty, and the noble Lord, Lord Kennedy, for their amendments. Through her amendment, my noble friend Lady Anelay raised the question of how the Government will review its measures to support the hospitality and tourism sector, and the parliamentary scrutiny of those measures. She also said that the date she had chosen for that review was the end of January. However, although some of the Government’s measures will have come to an end by then, because we are going through different phases in our response to coronavirus, many will be ongoing, not least some in the Bill such as pavement licensing and those that allow for a second summer of support, should we still be in a world of social distancing by then.

The coronavirus job retention scheme bonus will be paid from the end of January, so while we will have seen the end of the summer and potentially a more tricky autumn and winter period for the hospitality and tourism industry, we will only be part of the way through the Government’s response to the pandemic, and may be in a new phase of it.

There will be measures in place on 31 January and beyond to support the sector. Many noble Lords have spoken of the importance of the sector and how particularly hard hit it is. That is why measures are in place to support it—not only those in the Bill but the business grants that have been given to the retail, hospitality and leisure sectors, the business rates holidays now in place and the Bounce Back Loan Scheme grant. That grant is an example of our looking back at how these measures have worked after the event, and of our constantly reviewing and adapting our policy response. The bounce-back loans were a response to smaller businesses struggling to get access to the finance they need, many of which are in the hospitality and tourism sector.

Turning to the support we have provided for the tourism and hospitality sector, there is a £1.3 million destination management organisation resilience fund to support local tourism organisations in England, and the £10 million kick-starting tourism package, which gives small businesses and tourist destinations grants of up to £5,000 to help them adapt their business following Covid. The noble Lord, Lord Kennedy of Southwark, mentioned giving people confidence to go out and enjoy our tourist destinations; the kick-starting tourism package and allowing people to become more Covid-secure will contribute to that. We also have an “enjoy summer safely” campaign to market all the attractions available for people to enjoy in a safe and Covid-secure way.

I would also like to reassure the House this is not the end of the story. The DDCMS will continue to engage with stakeholders, including through the Cultural Renewal Taskforce and the Visitor Economy Working Group, to assess how we can effectively support tourism’s recovery across the UK.

I turn now to Amendment 78, which addresses various aspects of data protection. The Government publish relevant data on the Covid business lending schemes weekly, including the number of applications received and the number and value of facilities approved. Since 11 June we have been publishing monthly data on the Coronavirus Job Retention Scheme, broken down by employer size, sector and geography. That has allowed us to design measures more targeted at those that are struggling. For example, the Job Retention Bonus, set at a flat rate, will benefit those in the lower paid jobs and lower paid sectors more, because it will act as a greater incentive in those sectors. Furthermore, Visit England publishes a great deal of research, including regular surveys on visitor attractions, accommodation occupancy, day visits and Great Britain tourism. The ONS publishes fortnightly surveys on the business impacts of coronavirus which include sector-specific information. We will continue to engage with the sectors in the ways I have already mentioned.

The noble Baroness, Lady Uddin, mentioned some of the further measures announced last week that we have put in place to support the hospitality sector, including the “eat out to help out” scheme. Again, that discount is not just a financial incentive; it is about getting people out there to see that it is safe and secure to be out and about.

The noble Lord, Lord Kennedy of Southwark, raised the issue of premises that cannot afford to pay their rent because of Covid-19. They are currently protected from eviction. That protection was extended once already to the end of September 2020 and there is the option to extend it further if necessary.

The Government also published a code of practice for the commercial property sector. This will facilitate discussions during the moratorium over rent arrears and future payments between landlords and tenants to ensure best practice across the sector.

For the reasons I have set out, I hope my noble friend Lady Anelay and the noble Earl, Lord Clancarty, will be able to withdraw their Amendment and that the noble Lord, Lord Kennedy, will not move his Amendment 78 when it is reached.

[Baroness Anelay of St Johns [V]]

My Lords, first, I would like to thank all those who have spoken in this relatively short debate, especially, of course, the noble Earl, Lord Clancarty, for signing up to the amendment. I would normally refer to the contributions of all speakers, but I am keenly aware that certain groups of amendments have yet to be considered. I will therefore simply say a few words of thanks to my noble friend the Minister. I am grateful to her for recognising that although the measures in this Bill are intended for the most part to be temporary, it is set against a much wider background of a longer period in which the Government will continue to consider the necessary policies. They must consider the outcome of the policies to ameliorate the impact of Covid-19 now, and consider the longer-term impact—not only if there is a second spike—going forward. I particularly welcomed her saying—I paraphrase—that DCMS would continue to engage with stakeholders in the hospitality industry.

My only request for the Government is to consider that the hospitality industry’s investment in preparation for its major summer season next year—which will need to be really good to recover from this—will start early in the year. It will therefore be important for the Government to consider engaging early in the new year to be able to give some confidence to those in the hospitality industry that it is worth them continuing to invest, at what for them will be a very difficult time to do so. In the meantime, I beg leave to withdraw Amendment 42.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I have added my name to Amendments 46 and 47, moved and spoken to respectively by the noble Baroness, Lady Bowles of Berkhamsted, and I support the points that she has made. I also welcome the expert contributions from the noble Baroness, Lady Altmann, the noble Lord, Lord German, and the noble Baroness, Lady Kramer.

The Consumer Credit Act 1974 has long been criticised because of its extensive, complex information disclosure requirements. These are a problem in their own right but they can make it problematic for lenders to be flexible in cases where they might, for example, wish to offer forbearance to consumers experiencing difficulties in making repayments or to those suffering from unmanageable personal debts, as many do. Clearly, if small businesses are being affected by Covid-19 issues, it makes sense to ensure that their access to bounce-back loans is not hampered by requests for unnecessary evidence and detail or by extensive time delays in processing such data.

However, as the Explanatory Notes make clear, SI 2020/480 changed the rules for small loans to individuals and small partnerships so that they are no longer regulated credit agreements. However, as the noble Baroness, Lady Bowles, pointed out, the SI does not affect Sections 140A to 140C of the Consumer Credit Act 1974—the so-called unfair relationship provisions. The problem identified by the noble Baroness seems to be important. In a laudable attempt to simplify the processes, the Government might, perhaps inadvertently, have removed the statutory underpinning of Sections 140A to 140C, which, for example, through the courts protect borrowers from any subsequent attempts by lenders to act unfairly. That can often be the case, as we have heard this evening.

I believe that this issue might need to be reviewed separately once we are through the pandemic. Perhaps when she comes to respond, the Minister will agree that it needs further work. I hope that she will also be able to reassure us that our concerns are unfounded. I have my doubts but am willing to be convinced. The change in law needs to be securely attached only to bounce-back loans and the Covid-19 pandemic. We also need to know that the application of this disregard is proportionate and appropriate to lenders.

Turning to Amendment 48 in my name, I am grateful for the support of my noble friend Lady Uddin and the noble Baroness, Lady Kramer. I hope that the Minister recognises that the amendment covers ground raised in the powerful comments made at Second Reading by the noble Earl, Lord Shrewsbury, who shared his personal experience of the wide variability of responsiveness by the individual banks and lending institutions authorised by the British Business Bank to issue bounce-back loans.

My amendment calls for regular reports. I appreciate that there are confidentiality issues here, but this is also about transparency. If a private company such as MoneySavingExpert can do a survey which reveals that a substantial number of bounce-back applicants suffer delays, rejections and unrelated credit checks, surely the Government can do better. It is true that the MSE report is based on a sample, albeit a large one, but it shows that consumers have had variable responses from the major banks, and some of the smaller challenger banks had very high rejection rates. The transparency which the amendment looks for may improve that situation. I hope that the Minister can offer some movement on this issue, which would help with the task of getting bounce-back loans out to those who can use them. She said in her response to an earlier group of amendments that the Government were constantly reviewing and improving the Bounce Back Loan Scheme. I hope that she recognises that to do that without the sort of information that my amendment proposes might be otiose.

[Baroness Penn]

I thank the noble Baroness, Lady Bowles, my noble friend Lady Altmann and the noble Lords, Lord Stevenson and Lord German, for tabling these amendments.

On Amendments 46 and 47, the noble Baroness, Lady Bowles, made important points around the ongoing treatment of borrowers by lenders under the bounce-back loan scheme. My noble friend Lady Altmann and others referred to memories of previous unscrupulous practices by lenders. It is important to acknowledge the significant changes that the industry has been subject to over the past decade. All the major lenders have now signed up to the Lending Standards Board’s standards of lending practice, ensuring that banks treat their customers fairly and responsibly. The Financial Conduct Authority can now take enforcement action against individuals through the senior managers and certification regime and the new conduct rules, which apply to all employees of those firms and not just to senior managers.

I assure the noble Baroness, Lady Bowles, and all noble Lords who have spoken on the amendment that, while the Bill removes bounce-back loans from the Consumer Credit Act provisions, it does not remove protections from borrowers under the scheme. Under the terms of the guarantee agreement entered into by lenders with the British Business Bank that backs the bounce-back loans, lenders must provide clear information to borrowers before the credit agreement is entered into and during the lifetime of the loan. Lenders must make it clear to borrowers that the loans are not subject to the usual protections under the Consumer Credit Act. However, under the agreement entered into by lenders with the British Business Bank for the guarantee, there are other protections.

Where a borrower encounters financial difficulty, lenders must provide information on assistance available, including sources of free, independent advice. Where a borrower misses payments under the scheme, the lender will give them a reasonable period to remedy any breach of the agreement and will not treat that breach as a default if it is remedied within that period. Finally, lenders must not require borrowers to pay any lender-levied fees of any description, including on default, or any default interest. If a borrower defaults on the loan, the guarantee agreement prevents their primary residence and primary vehicle forming part of the debt recovery. Should a lender not comply with these terms, they risk not being able to call on the guarantee. This provides a strong incentive for lenders to treat borrowers fairly.

Furthermore, the Government have retained Financial Conduct Authority oversight for debt collection, meaning that lenders must comply with the Financial Conduct Authority rules on arrears, default and recovery. Recovery procedures must also comply with the Lending Standards Board’s standards of lending practice. As the noble Baroness, Lady Bowles, mentioned, the Government are working with accredited lenders under the scheme to ensure that they understand the requirements on collections and recoveries for the loans. I will write to her on whether the result of those discussions will be published.

Finally, the jurisdiction of the Financial Ombudsman Service has been maintained for bounce-back loans, meaning that eligible borrowers are able to access this convenient and effective means of resolving disputes with their lender without having to go to court.