Levelling-up and Regeneration Bill

Earl Howe Excerpts

Report stage
Wednesday 13th September 2023 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

My Lords, the percentage of second homes in so many parts of the country has had such a devastating impact on communities. We heard about that in great detail in Committee and had many examples from all sides of the House. We noted that it particularly impacts on rural and coastal communities. I am also concerned about the tax loophole and that so many second home owners avoid paying either council tax or business rates. This is clearly an anomaly and needs to be resolved.

The amendments in the names of the noble Lords, Lord Foster and Lord Shipley, would be an important next step in tackling this. We too welcome the licensing steps already taken but, if we are going to tackle this, we need to go one step further. We look forward to hearing the Minister’s response to the amendments proposed.

[Earl Howe (Con)]

My Lords, Amendments 247YYE and 288B, in the name of the noble Lord, Lord Foster, and spoken to by the noble Lord, Lord Shipley, bring us to the often sensitive issue of second homes. We recognise that large volumes of second homes or short-term lets can become an issue when they are concentrated in particular areas. That is why the Government have taken decisive action. We committed to introduce a registration scheme for short-term lets in England through this Bill and consulted on the design of the scheme earlier this year. At the same time, we also consulted on proposals for a new short-term let use class with associated permitted development rights. Further announcements on both consultations will be provided in due course.

We introduced higher rates of stamp duty for second properties in 2016 and a new stamp duty surcharge for non-UK residents in 2021, and new measures to strengthen the criteria for holiday lets to be eligible for business rates came into effect in April. Furthermore, this Bill will give councils the discretionary power to apply a council tax premium of up to 100% on second homes.

The noble Lord, Lord Shipley, asked why we are not making further changes in respect of second homes. Through the Levelling-up and Regeneration Bill and other measures, the approach we are taking is to boost housing delivery more broadly to make more homes available, including in those areas where there are high concentrations of second homes. Second homes that are additionally let out may fall within the short-term let use class that I mentioned where they meet the definition.

It might be helpful if I say a little more about the Government’s approach to first-time buyers in particular. We recognise the hardship people face when they cannot find a home of their own. Our £11.5 billion affordable homes programme will deliver thousands of affordable homes to rent and buy right across the country. The Government are committed to helping first-time buyers to get on to the housing ladder. We operate a range of other government schemes, including shared ownership and the lifetime ISA and we continually keep options to support first-time buyers under consideration. We are also committed to ensuring that enough homes are built in the places where people and communities need them and our first homes scheme is providing new discounted homes prioritised for local first-time buyers.

The noble Baroness, Lady Taylor, referred to the common perception that some second homeowners may pretend to let out their property in order to benefit from small business rate relief. That is why the Government introduced, from April this year, new criteria for holiday lets to show that they have been let for at least 70 days and have been available for at least 140 days in the previous year. If they are entitled to receive small business rate relief as a holiday let operator, that is perfectly appropriate. If a property cannot demonstrate those criteria, it will be liable for council tax.

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So, as I said, we are very grateful to the noble Lord, Lord Holmes, for raising these issues again and I look forward to hearing the response of the noble Earl.

[Earl Howe (Con)]

My Lords, in Amendment 248 my noble friend Lord Holmes of Richmond brings us back to the use of roads adjacent to pavements that have been granted a licence. I can assure him that there are already clear processes by which a local authority can consider the pedestrianisation of a street, including to facilitate outdoor dining, with vehicular access a relevant consideration in those processes: this is not an issue that will be glossed over. Pavement licences can then be granted if the conditions are seen to be right and, in recent years, we have seen the success of this in practice across the country.

The noble Baroness, Lady Pinnock, returned to the question of new powers for local authorities to charge for the use of the pavement. She is probably aware that the Business and Planning Act 2020 does not give local authorities a specific power to charge ongoing rent for the use of the pavement, and the aim behind that measure is to support businesses by making it significantly cheaper to gain a licence, compared to the previous route. The measure fully funds local authorities’ costs for providing this service: we are not looking to impose additional costs on businesses at a time of rising costs.

My noble friend’s Amendments 249 and 250 concern the fees to be charged for pavement licensing. The Government feel very strongly that we must keep costs reasonable and consistent for businesses. At a time when their costs are rising, we should not place additional financial burdens on businesses still recovering from the pandemic. The fee caps in the Bill have not been arrived at by accident but are the result of close work with local authorities, businesses, leaders from the hospitality sector and communities. They reflect the actual costs of processing, monitoring and enforcing pavement licences. I also make the point, on Amendment 250, that the direct attribution of profit to the granting of a licence would not be a simple matter.

As for my noble friend’s proposal in Amendment 253 for deemed rejection rather than a deemed granting of a licence in the event of no decision being made within the determination period, I say to him that it would not be right to punish applicants for delayed local authority decisions. Deemed consent encourages local authorities to make decisions while ensuring that the local and national conditions which would otherwise have applied are applied and can then be enforced, including by the removal of the licence.

My noble friend’s Amendment 251, changing the start of the consultation period to the time at which a receipt has been sent to the applicant, would add an additional and, in our view, unnecessary step and potentially delay the process.

Amendments 252 and 255 would likewise increase both the consultation and determination periods that apply. We have listened carefully to the views of local authorities, communities, businesses and other concerned organisations and believe that our proposals strike the right balance, protecting the ability of everyone to be heard while ensuring that businesses receive a decision in a reasonable timeframe.

I turn to my noble friend’s Amendments 254 and 256 dealing with the free flow of pedestrians and the conditions which may be imposed by a licence. The Business and Planning Act 2020 already requires that local authorities take this into consideration, preventing licences being granted where they would preclude entry on to or passage along the highway, or normal access to premises adjoining the highway. On Amendment 256, the Act already provides powers for local authorities to impose conditions such as these, and we are anecdotally aware of local authorities having done so. As such, we do not consider that specific reference to the discretion for local authorities to do so is needed. These are rightly matters determined locally.

The noble Baroness, Lady Taylor, suggested that the Government’s wording in this area was not quite tight enough. We have made it clear in the pavement licence guidance that, when setting local conditions and determining applications, local authorities should consider the need for barriers to be put in place to separate furniture from the rest of the footway so that people who are visually impaired can navigate around the furniture. As recommended by the RNIB, we have highlighted that best practice involves using measures such as colour contrast and a tap rail for long cane users. However, this will need to be balanced to ensure that any barriers do not inhibit access for other street users, such as people with mobility impairments, if they are creating a further obstacle in the footway.

On Amendment 257, I thank my noble friend for raising the very important issue of accessibility and the impact of pavement licensing on disabled users of the highway. In considering whether to grant a licence, Section 3(7) requires particular regard to be given to the needs of disabled people and to guidance on this matter published by the Secretary of State. That guidance, developed in close collaboration with the Guide Dogs for the Blind Association and the RNIB, includes details of minimum accessibility width considerations for disabled persons. We believe that the determination as to the best way to meet the needs of disabled persons is best made locally, taking account of the specific circumstances for that pavement, particularly since physical barriers may on occasion hinder accessibility, as I have already alluded to.

Finally, Amendment 258, in the name of my noble friend Lord Young of Cookham, would create a national condition banning smoking in pavement licensed areas. Of course I understand very well the strength of feeling expressed by my noble friend and a number of noble Lords on the nuisance caused by the smoking of tobacco. Both my noble friend and the noble Baroness, Lady Northover, called for pavement licensing to be made smoke-free. My noble friend stressed the need to protect the interests of non-smokers in particular.

I can tell the noble Lord, Lord Faulkner, that the Government fully recognise the importance of this issue for public health, but we also recognise the need to do what is reasonable and proportionate in all the circumstances. Our guidance already makes it clear that pavement licences require businesses to make reasonable provision for seating for non-smokers to ensure choice for customers. It is also clear that ways of meeting this requirement could include clear “No Smoking” signs, the removal of ashtrays in smoke-free areas and a minimum 2-metre distance between smoking and non-smoking areas, wherever possible. Local authorities are also able to consider setting their own conditions, where appropriate, and where local decision-makers believe it is reasonable to do so. We are aware that a number of councils across the country have put in place local conditions with the effect that noble Lords are calling for. As my noble friend Lord Naseby rightly said, it is perfectly possible for councils to do this, and we think it is better for decisions of this sort to be taken locally so that individual circumstances are taken into account.

I recognise the intention behind my noble friend’s amendment, which is a benign intention. However, I think he would concede that this is an issue wholly different in kind from that of planning fees, where it is incumbent on government to ensure financial fairness across the country. We consider it right that this is a decision made locally, taking into account the representations received, rather than imposed nationally.

[Lord Young of Cookham (Con)]

Before my noble friend sits down, he has said that this is a decision best taken locally. But that is not what the Local Government Association wants—it wants it to be taken nationally.

[Earl Howe (Con)]

Well, my Lords, the Government will continue to listen to the Local Government Association very carefully in this connection. I can only say that we are not persuaded yet that this move would be the right one, having consulted extensively with all stakeholders involved.