Levelling-up and Regeneration Bill

Earl Howe Excerpts

Committee stage
Wednesday 22nd February 2023 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, the noble Baroness, Lady Taylor of Stevenage, has raised some significant points in her amendments in this group. The first is to include in the Bill the engagement of local authorities in reporting on levelling up in their areas. My noble friend Lord Shipley said in our debate on the previous group how there has been an obsession in government, from Governments across the decades, with ruling England from Westminster and Whitehall down to minute areas of decision-making. Certainly on this side of the House, we believe that local people and their locally and democratically elected representatives are best placed in this context to determine what areas within their council boundaries would best benefit from the levelling-up missions and funding. They would also be able to report on them because they have a depth of understanding and data that would help to make clear what progress has or has not been made.

That is a point well made, as is the point that the National Planning Policy Framework, which is currently in review, will relate to many of the missions in the Bill. Are we going to build new homes that are car-reliant or will we ensure that they can access public transport? Are we going to make them safe places in a safe environment for housing? Is there going to be in the framework allocation of land so that businesses are in appropriate places and are accessible for people who want jobs? All of that means that that is a very important point well made. No doubt it will be pursued at later stages of the Bill.

[Earl Howe (Con)]

My Lords, this group of amendments tabled by the noble Baroness, Lady Taylor of Stevenage, looks at the role of local government and the National Planning Policy Framework in delivering levelling up.

First, Amendment 39 would mean that county councils, unitary authorities and combined county authorities would publish annual reports on the delivery of levelling-up missions. I hardly need to re-emphasise that local authorities and local leaders have a crucial role to play in levelling up places across the UK. Empowering local leaders, including through agreeing devolution deals and simplifying the funding landscape, is a cornerstone of the levelling-up agenda.

This principle of empowerment is absolutely critical. Noble Lords have tended to criticise the Government for any suggestion of the centre telling local authorities what to do; writing this amendment into the Bill might appear to do just that. Having said that, many organisations outside central government, including All-Party Parliamentary Groups, academics, business bodies, think tanks and local organisations, have been debating and scrutinising the levelling-up agenda and how it could be taken forward in particular areas of the country; I have no doubt that they will continue to do so. The provisions on reporting in the Bill will further enable such independent assessment and thinking but requiring local authorities to report in this way, as I think the noble Baroness herself recognised, would surely be disproportionate and unnecessary.

Amendment 55 would mean that a Minister must publish a report on the impacts of this legislation on local government and a strategy to consider how this part of the Bill will impact local authorities through future legislation. The new burdens doctrine, established and maintained by successive Governments, requires all Whitehall departments to justify why new duties, powers, targets and other bureaucratic burdens should be placed on local authorities, as well as how much such policies and initiatives will cost and where the money will come from to pay for them. It is very clear that anything which issues a new expectation on the sector should be assessed for new burdens. As the Government develop new policies to deliver against their levelling-up missions, they will fully assess the impact on local authorities and properly fund the net additional cost of all new burdens placed on them. Therefore, this provision already ensures that the Government must properly consider the impact of their policies, legislation and programmes on local government and fully fund any new burdens arising.

Amendment 54 would mean that a Minister must publish draft legislation for ensuring that the National Planning Policy Framework has regard to the levelling-up missions. Although it would not be appropriate to legislate to embed the levelling-up missions in planning policy, the levelling-up missions are nevertheless government policy. Planning policy to achieve these will be a relevant consideration when developing local plans and determining planning applications.

The department is currently consulting on updating the National Planning Policy Framework. The consultation document was published in December 2022 and the consultation is due to close in March 2023. It sets out a number of areas where changes to national planning policy might be made to reflect the ambitious agenda set out in the levelling up White Paper, and invites ideas for planning policies which respondents think could be included in a new framework to help achieve the 12 levelling-up missions in the levelling up White Paper. The department will respond to this consultation by the spring of 2023 so that policy changes can take effect as soon as possible.

In summary, I suggest that these amendments, though well intended, are unnecessary. I hope that the noble Baroness will feel able to withdraw her Amendment 39 and not move Amendments 54 and 55.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I am very grateful to the noble Earl for his thoughtful response. On the first amendment, Amendment 39, I explained that I thought that perhaps the wording was a little confusing. I did not intend to impose a burdensome doctrine on my colleagues in local government; I do not think that they would have forgiven me if I had done that—I want to walk out of here unscathed. I think that is really important. However, it is important that local government understands what its role is going to be in measuring and monitoring the success or otherwise of the levelling-up missions. I will withdraw my amendment, but I hope that Ministers will consider how local government is going to take part in that essential exercise of determining whether the levelling-up missions have been successful and, just as government departments are going to have to pull that together, how local government will be required to do so.

In relation to the second amendment, Amendment 54, I understand that the National Planning Policy Framework is being revised at the moment. I hope that it will be revised with the levelling-up missions embedded in it, because that will help clarify matters for local government. When we get legislation coming forward without the documents to support it, it is difficult to say whether that is going to happen. I hope we will get the opportunity to have good scrutiny of the National Planning Policy Framework when it comes forward so that we can make our decision at the time about whether it actually works in terms of having a countrywide set of levelling-up missions.

On the last of my amendments, Amendment 55, it is always good to hear that financial aspects are being taken into account. I understand all about the new burdens funding—which, I have to say, sometimes works and sometimes does not in practice—but that was not exactly the point that I was making. I was referring to how local government contributes to those missions. We have the Levelling Up Advisory Council, which I presume is going to draw together the work of different departments and how they contribute. My point was about how we make that assessment as legislation is issued and how that legislation contributes to the missions. If this is to be the biggest change we are going to have across local government, then surely it is important that any legislation coming forward talks about the contribution that it is going to make. Of course, it will need funding, and I would welcome new burdens funding for new challenges that it brings with it, but we also need to understand how it works in terms of new legislation that will come forward. I am grateful to the noble Earl for his response.

--- Later in debate ---

We know this concluded in October, so it would be very helpful if the Minister could give us some idea of when we are likely to see the Government’s response to this, because clearly it is going to be critical to making progress on this mission—as is all the housing legislation that my noble friend referred to. If we are going to genuinely move forward and manage the levelling-up challenges of housing, we need to move forward on the promised legislation. In particular, as my noble friend said, when are going to see the abolition of leaseholder tenure? Reform is not good enough; it is where we want to move forward, so I await the response with interest.

[Earl Howe (Con)]

My Lords, as we have heard loud and clear from the noble Lord, Lord Kennedy, in his introduction to this group, Amendments 42 and 43 relate to leasehold reform in the context of the levelling- up housing mission. They provide me with a good opportunity to bring the Committee up to date on the Government’s plans for reform in this policy area, and the action that we are taking now. However, I should first declare my interest as set out in the register as the beneficial owner of a freehold property that is subject to a long lease.

At the end of January, my right honourable friend the Secretary of State for Levelling Up set out his intention in Parliament to bring, as he put it, the “outdated and feudal” leasehold system to an end. The Government wish to extend the benefits of freehold ownership to more home owners, and that is why we have committed to end the sale of new leasehold houses and to reinvigorate commonhold so that it can finally be a genuine alternative to leasehold. It is why we have limited the charging of ground rent, as my noble friend mentioned, in most new residential leases, which takes away the incentive to build leasehold. It is why we will make it easier for leaseholders to purchase the freehold of their building and take control of their building management by enhancing enfranchisement and the right to manage.

Leasehold and commonhold reform will support the mission to level up home ownership and promote true home ownership for all by fundamentally correcting the power imbalance at the heart of the leasehold system and putting the power into the rightful hands of home owners. The Government’s reform package is advancing this agenda by building on the Leasehold Reform (Ground Rent) Act, which aims to make home ownership fairer and more transparent for thousands of future leaseholders by preventing landlords under new residential long leases requiring a leaseholder to pay a financial ground rent.

Furthermore, thousands of existing leaseholders have already seen a reduction in their inflated ground rent costs as part of the ongoing Competition and Markets Authority investigation into potential mis-selling and unfair terms in the leasehold sector. The Government are encouraging developers of all sizes to come to the negotiating table if they have not already.

The noble Lord, Lord Thurlow, referred to insurance. There are several issues around insurance, as I am sure he is aware. One of them is that leaseholders are often unable to gain visibility of the costs that make up their premiums, and nor do they have useful routes to challenge these. We will act by arming leaseholders with more information and will ensure that leaseholders are not subject to unjustified legal costs and can claim their legal costs back from their landlord.

The Government are committed to delivering the second phase of their major two-part leasehold reform within this Parliament. I am afraid the noble Lord, Lord Kennedy, will have to wait for the detail of the Bill but, as he has pressed me on the question of reform or abolition, I can do no better than refer him again to my right honourable friend’s words. He made clear his intention to bring the system of leasehold to an end.

As part of these reforms, the Government remain committed to better protecting and empowering leaseholders, first, by giving them more information on what their costs cover, as I have alluded to, and, secondly, by ensuring they are not subject to any unjustified legal costs and can claim their own legal costs from their landlord.

My noble friend Lord Young of Cookham sought to press me on pre-legislative scrutiny. At this stage I can simply say that the Government welcome the work and engagement of noble Lords and other parliamentarians to date on leasehold and commonhold reform. We will of course consider how best to involve Peers, Select Committees, Members of Parliament and wider stakeholders in the development of any future legislation.

[Lord Young of Cookham (Con)]

Would the best way to achieve the ambition my noble friend has just set out not be to publish the draft Bill?

[Earl Howe (Con)]

My Lords, we fully understand the desire for urgency in this area. The Minister, my noble friend Lady Scott, has made this clear at this Dispatch Box previously. As I hope my noble friend Lord Young knows, her department is working very hard indeed on this policy area.

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

Can the noble Earl confirm whether there is a draft Bill? That would be useful. Can he also maybe give us a bit more on the definition of “urgent”?

[Earl Howe (Con)]

I do not think I can add to what I have already said. I shall endeavour to ascertain the state of play on the drafting of the Bill. I will gladly tell the noble Lord if there is any further information on that, but I do not have it to hand.

Given the extent of government action on these priorities set out elsewhere in policy, and the approach I have outlined to setting a clear, systematic and long- lasting framework for levelling-up missions, I hope that for now this provides the noble Lord, Lord Kennedy, with sufficient assurance to enable him to withdraw Amendment 42.

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

My Lords, I thank everyone who has spoken in this debate. I also —I should have done this when I spoke originally—thank the noble Lord, Lord Young of Cookham, the noble Baroness, Lady Fox of Buckley, and the right reverend Prelate the Bishop of St Albans for signing my Amendment 42. I am very appreciative.

In his excellent speech, the noble Lord, Lord Young of Cookham, highlighted the problems of the opaqueness of the Government’s actions. It is all still a bit grey, and that is an issue. He also raised a very important point. We do not know whether the Bill is there yet, but apparently there is something there. If it appears in the King’s Speech, the other risk is that it will be the last Session of this Parliament and we all know that things drop off at the end and do not happen. The noble Lord made that point well, and the Government should take note of it. We would not want to get a Bill but then see it disappear because, “Sorry, we’re now going to the general election and we’ll have to come back to it afterwards”. That would not be a good place to be at all.

The noble Baroness, Lady Fox of Buckley, made the point that many leaseholders were first-time buyers and often live in areas where the Government want to level up. In this levelling-up Bill we would hope to do something for those people and help them level up. In the worst cases, people are treated appallingly by rogue managing agents and rogue freeholders. There was a very good article in the Financial Times recently. There is a huge insurance scandal coming down the track with what has been going on with managing agents and leaseholders. It is absolutely outrageous; they are just ripping people off.

I thank the noble Lord, Lord Greenhalgh, for his support and welcome him to the cause. It is good to have him on board. If we ever meet in future, we will make sure we invite him. I was delighted to learn that he is now a vice-president of the Local Government Association. I should probably declare that I am as well. I look forward to us working hand in hand on this in the coming weeks and months.

I thank the noble Lord, Lord Thurlow, for his support on this. These are probing amendments, but it is important that we air these issues here and ensure that we get the Government to be absolutely clear where they are. I thank the noble Baroness, Lady Pinnock, for her support as well—it is much appreciated—and my noble friend Lady Hayman.

I thank the noble Earl for his response, but I was hoping for a bit more. I have been in this House for nearly 13 years and have always been very impressed by him, so I was hoping for a little more. Maybe we will come back to this again.

I am still not quite clear where we are on reform or abolition. What we are going to do here is still a little vague. Maybe that is why we are not yet getting the draft Bill that may or may not be produced. At the moment, some leasehold campaigners think the Government are going to abolish leasehold and are saying, “What a wonderful thing to do; it’s really great news that the Government are going to do this”. Another group thinks the Government are going to reform it. They are not doing both, clearly, and they are not being clear about what they are going to do. They are going to disappoint quite a lot of people before the next election, and I think they should reflect carefully on that. They need to be much clearer what their intention is. As the noble Lord, Lord Young of Cookham, said, if they have the draft Bill, they should just publish it and help everybody.

I will leave it there. I beg leave to withdraw my amendment.