Levelling-up and Regeneration Bill

Baroness Taylor of Stevenage Excerpts

Report stage
Thursday 20th July 2023 Lords Chamber

[Lord Lansley (Con)]

My Lords, my intervention on this subject will be brief. I did not speak on development corporations in Committee, but I have been following the subject very carefully. In response to this very short debate, or perhaps more appropriately in a subsequent letter, might my noble friend explain to us a little more about how the various forms of development corporations are intended to be deployed?

As far as I can see, in addition to the mayoral development corporations—which are not much affected by this Bill—we will continue to have scope for urban development corporations initiated by the Secretary of State, we will continue to have scope for new town development corporations initiated by the Secretary and we will have locally led urban development corporations and locally led new town development corporations that may be established at the initiative of local authorities under this Bill. By my count, we have five different forms of development corporations.

There is a certain amount of speculation about under what circumstances, in what areas and for what purposes these development corporations may be deployed, and about the Government’s intentions. It would be reassuring to many to hear from the Government about that, and in particular about their presumption that they would proceed, particularly for new towns and new development corporations, by reference to those that are locally led and arise from local authority proposals, as distinct from continuing to use the powers for the Secretary of State to designate an area and introduce a development corporation at his or her own initiative. It would be jolly helpful to have more flesh on the bones of what these various development corporations look like and how they will be deployed by government.

[Baroness Taylor of Stevenage (Lab)]

My Lords, those who have heard me speak in this Chamber will know that I am a great fan of development corporations, having grown up in a town that, apart from our historic old town, was created and, for the most part, built by Stevenage Development Corporation. At that time, the innovation of development corporations took a great deal of debate in Parliament to initiate, and we have hopefully moved on a bit towards devolution since the middle of the last century.

If there is to be parliamentary scrutiny of the establishment of development corporations, it is absolutely right that it should be done by the affirmative procedure, so we welcome the movement on that in Amendments 146 and 147, to ensure that the establishment of locally led urban and new town development corporations is drawn to the attention of both Houses, in the same way as those that are not locally led.

We hope that it will be the intention of government to scrutinise only the technical aspects of governance, for example, as it would be entirely against the principles of devolution that the Bill sets out to promote for any Government to effectively have a veto on whether proposals for a development corporation go ahead. During the passage of the Bill, we have talked about a new relationship of mutual trust between local and central government, and we hope that such parliamentary scrutiny will not be used to undermine that.

I absolutely agree with the noble Lord, Lord Lansley, about the importance of determining the nature of parliamentary involvement in different types of development corporation. Of course, we would have concern about Parliament intending to have a veto on the locally led ones. The other amendments in this group are consequential on the Minister’s previous amendment on page 195. We look forward to her comments about the points raised.

[Baroness Scott of Bybrook (Con)]

My Lords, I assure the noble Lord, Lord Stunell, that, yes, locally led development corporations will come from local authorities—they will put them forward.

My noble friend Lord Lansley brought up the different forms of development corporations. Rather than standing here and taking time, I would prefer to write to him and copy everybody in. I suggest that we might have a small group meeting about this when we come back in September so that any questions can be asked. I thank the noble Baroness, Lady Taylor of Stevenage, for her support for these amendments.

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[Baroness Pinnock (LD)]

My Lords, I thank the Minister for this group of amendments, which largely—not entirely—relate to the rights and responsibilities of Senedd Cymru. Throughout the Bill the Government have had to bring back, as amendments, changes to it to reflect the devolution rights and responsibilities of both the Scottish Government and the Senedd Cymru.

It strikes me as unfortunate that, even 10 years or more after devolution has become fully developed, the Government are still unable to understand that different nations of the UK have particular rights and responsibilities. They are unable to appreciate that or to understand the extent of those rights and responsibilities. It would be good to know that the lesson has reached the distant parts of the Government and that we will have no more of these hasty amendments to put right government legislation impinging on the rights of the devolved nations. Would it not be great if the Minister could give us that assurance?

[Baroness Taylor of Stevenage (Lab)]

My Lords, this group brings up to date the provisions in the Bill so that they are appropriately applied to Wales. It also updates the list of types of compulsory purchase that can be made, subject to common data standards—we accept that this is important. We have had much discussion about the issues of hope value during the passage of the Bill, and it is therefore absolutely right that the Minister responded to Senedd Cymru’s request to make that apply in Wales as well.

I associate this side of the House with the comments by the noble Baroness, Lady Pinnock. It would be helpful if these types of provisions could be consulted on with the Welsh, Scottish and Northern Irish Administrations before they come before this House. But I am grateful to the Minister for listening to the Welsh Senedd’s request, and we are pleased to see these amendments coming forward today.

[Baroness Scott of Bybrook (Con)]

I thank the noble Baronesses for their input. I say to the noble Baroness, Lady Pinnock, that we understand the devolved authorities’ rights and responsibilities, but, as always, there is negotiation on any legislation that we put through which may affect them. The Government and the Welsh Government did not reach a settled position on the CPO powers until after the Lords Committee stage had concluded. As these things are complex, our devolved authorities also need time to discuss and make decisions. I can assure the noble Baroness that we are working closely with them all the time.

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Moved by

[Baroness Taylor of Stevenage]

163: After Clause 202, insert the following new Clause—
“Support for pubsWithin 120 days of the day on which this Act is passed, a Minister of the Crown must publish a strategy to support the pub industry and reduce the number of pubs closing.”Member's explanatory statement
This amendment is intended to help support the pub industry.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I might take a little longer over this set of amendments. Our Amendment 163 addresses the severe impact that the cost of living crisis has had on the pub industry in the UK and asks that Ministers address it with a strategy to support this trade, which has such a unique and special place in the culture of our country.

The number of pubs in England and Wales continues to fall, hitting its lowest level on record. According to new research by the Altus Group, there were 39,970 pubs in June, down by more than 7,000 since 2012. After struggling through Covid, when it received welcome support from the Government, the industry is now facing soaring prices and higher energy costs. Over the past decade, thousands of pubs have closed as younger people tend to drink less—they do not all drink less; they tend to—supermarkets sell cheaper alcohol and the industry complains of being too heavily taxed. According to Altus, 400 pubs in England and Wales closed in 2021 and some 200 shut in the first half of 2022 as inflation started to eat into their profits. That brought the total number of pubs down to its lowest since its records began in 2005.

My noble friend Lady Hayman, who, sadly, cannot be in her place today, drew to the attention of the Minister during debates on the Non-Domestic Rating Bill concerns from the British Beer & Pub Association about the proposals for improvement relief. That is because pubs that are not directly owned and managed by the ratepayer—namely, those in tied or leased arrangements, which are apparently around 30% of UK pubs—become a much less attractive proposition for investment, as improvement relief can be guaranteed only on directly managed pubs. We urge Ministers to take this seriously and consider working with the pub industry to develop a strategy to support it in the medium and long term.

All the amendments in this group draw attention to some of the serious issues facing our high streets and, importantly, to the negative contribution that the current business rates system makes to those problems. I am very aware of proposals in the Non-Domestic Rating Bill currently making its way through the Lordships’ House, but while we welcome many of them, they do not go far enough. We see that Bill as merely tinkering at the edges of an outmoded and outdated system. During my many years on the Local Government Association’s resources board, successive attempts have been made to encourage government to get to grips with both a fair funding review and a comprehensive review of the non-domestic rating system. Unfortunately, the Non-Domestic Rating Bill does not do that, and even the measures it does contain bring concerns about the capacity of the VOA to enact them. It is a huge missed opportunity.

I was very grateful to the Minister for providing me and the noble and learned Lord, Lord Etherton, with an extensive briefing on the Non-Domestic Rating Bill. During it, she pointed out that consultation had not resulted in a call for major reform of the business rates system. I looked at the detail of the consultation and it was, as government consultations often are, a technical consultation framed around government’s questions relating to the existing system, on matters such as transparency of the VOA, penalties for non-compliance, transition to online services, changes of circumstance, improvement reliefs, valuations, the multiplier, local discretionary relief, et cetera. What it absolutely did not do was encourage wider comment on whether the business rates system was fit for purpose in the first place.

The Local Government Association published its response to government proposals. It welcomed some of them, but it said:

“The LGA will continue to argue for a sustainable local government finance system which conforms to the principles we submitted in our submission to the Business Rates Review; sufficiency, buoyancy, fairness, efficiency of collection, predictability, transparency and incentive. We published commissioned work examining alternatives for reform in January 2022. Only with adequate long-term resources, certainty and freedoms, can councils deliver world-class local services for our communities, tackle the climate emergency, and level up all parts of the country”.


We firmly believe that there is a case for further reform of the business rates system. Our Amendment 273A and that in the name of the noble Baroness, Lady Pinnock, Amendment 282D, ask that the Secretary of State consider again the issue of non-domestic rates and the contribution they can make to levelling up and regeneration.

The major example I would give is that the Non-Domestic Rating Bill does nothing to address the very unfair advantage currently enjoyed by online businesses as compared to our high street businesses. The Centre for Retail Research found that 17,000 shops closed last year—that is 47 shops a day, the highest annual total in five years. More than 5% of retail staff lost their jobs last year and hospitality suffered a similar fate. Not all those failures are because of business rates, of course, but I am sure they are a contributing factor.

High streets have been hit hard and are increasingly run down, with hard-working business owners having to accept defeat in the face of impossible financial difficulties. While crisis relief was made available during the pandemic, there does not seem to be a long-term strategy to address the issues that businesses are facing, which will be critical to ensuring that every town or neighbourhood centre in the UK has the opportunities it needs to regenerate and level up.

Labour has a clear plan to scrap business rates and bring in wide-reaching reforms to even out the playing field, but we are still not clear about what the Government’s long-term plan for business taxation will be. The threshold for rates relief for small businesses is still too low, and online giants are still not paying their fair share of taxes, with a digital service tax not high on the agenda—as far as we can see, it still sits in the “too difficult” box. How can we say to our communities that high street shops such as Marks & Spencer—known, valued local businesses—are paying more in tax than online giants such as Amazon? That is not levelling the playing field. Each loss of a much-loved store, pub, bank, post office or leisure facility is felt by our communities like a kick in the teeth, and worse than that is the feeling of helplessness that the Government are standing by and watching this happen.

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I reassure noble Lords that the amendment is entirely unnecessary. A review has only recently concluded, and the Government remain committed to delivering on the conclusions of that review. We have already taken the first steps towards that and are delivering on our further commitments through the Non-Domestic Rating Bill. I understand why noble Lords have raised their amendments, but I hope that I have provided assurance that the concerns underpinning the two amendments are already being addressed through the changes the Government are delivering to the business rates system, through both legislation and the generous and wide-ranging support that we have made available to ratepayers. I therefore ask the noble Baronesses not to press their amendments.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I am grateful for the very detailed and thorough response from the Minister, as ever. I thank her for her comments on the Hospitality Sector Council. I have a question for her, to which I am happy to receive a response in writing: were the views of the Hospitality Sector Council on the non-domestic rates taken into account in the drafting of both this Bill and the Non-Domestic Rating Bill before your Lordships’ House?

I turn to the issue of regional mutual banks. I am sorry that the noble Lord, Lord Holmes, is not in his place, because he has been a very good champion of this sector. It would be a big step forward for levelling up and regeneration to have those banks, which would work with local government and local communities on the economy of local areas.

I point out that, through the work I have been doing with both the Co-operative Party and the Co-operative Councils’ Innovation Network, I know that regional mutual banks are already being delivered in Wales with the support of the Welsh Government, but in England there are still considerable barriers and hurdles to overcome. My colleagues in Preston have been engaging with this process, but it is highly complex.

We appreciate that financial security is paramount in the development of a regional banking sector, and we are very pleased to hear that that sector has the Government’s support, but we need to work as quickly as we can to overcome the barriers to that. We genuinely believe that, without a switch from the centralised banking system that we have in this country to a much more regional sector, we will not be able to reach the full potential of local areas.

On the issues with the business rates review, I have pointed out the technical nature of that consultation process and the concerns we still have about the resources needed to enact the provisions of the Non-Domestic Rating Bill, particularly in relation to the Valuation Office Agency. There are still concerns around the appeals process, which takes far too long and can leave both businesses and local councils hanging on for years, in some cases, while appeals are settled.

The noble Baroness, Lady Pinnock, was right to raise the issues of tariffs and top-ups, which are not very efficient at making sure that the funding from non-domestic rates gets to where it needs to go. They are not structured enough to ensure that, where you have poorer parts of better-off areas, the funding gets to where it needs to go.

We note that many concessions on business rates are coming forward in the Non-Domestic Rating Bill, which we welcome, but changes to the multiplier are giving cause for concern; it is no good giving businesses concessions with one hand and then taking them away with the other. Our fear is that if there is not a radical and different approach to both fair funding and the business rates system, it will be more difficult to achieve levelling up or regeneration. That said, I am happy to withdraw my amendment at this stage.