Leasehold and Freehold Reform Bill

Jeff Smith Excerpts

Consideration of Lords amendments
Friday 24th May 2024 Commons Chamber

[Sir Peter Bottomley (Worthing West) (Con)]

I think the whole House wishes that the Secretary of State was able to be with us. He is one of the people who has helped to move this forward, together with the junior Minister. I say to Michael: well done, not just on education, but on getting a grip of the horrors in residential leasehold.

After the Grenfell fire tragedy, people realised that those stuck with the bill not just for cladding but for every other fire defect were not the developer, the architect, the surveyors or the suppliers of components, but the residential leaseholders who by law are only tenants and own not a single brick in the building. It was when the Secretary of State came in that the action started. Actually, he was not the first. Two other Secretaries of State had to give instructions to their permanent secretaries to start giving out some compensation. I still commend to the Government having an agency to take over potential claims of all residential leaseholders, taking action against those responsible and holding a roundtable with all their insurers. That would get £10 billion in almost overnight, saving the money going to the lawyers.

To return to the Bill, there has been cross-party agreement over the past eight years that something was needed. The Law Commission produced many recommendations, most of which are in the Bill. I will not go into all the detail of the debate that I heard in another place, where some Members seem to think that people’s property rights are being harmed. I do not remember those Members of another place complaining when the disgraceful statutory instrument 632 came through in 2020, boosting landowners’ values by about £5 billion. The only people paying that were the leaseholders.

I am very grateful to the people who have supported the all-party group on leasehold and commonhold reform. Katherine O’Riordan has done really well on that, as have the trustees of the campaigning charity Leasehold Knowledge Partnership, Martin Boyd and Sebastian O’Kelly, together with new trustees, including Liam Spender, who has done a great deal in fighting off very bad landlords in the east end of London.

Three problems remain, on which the House will want to see the next Administration take action urgently. One is that forfeitures, as the whole House accepts, is a draconian system that must go. The threat of losing the home is one thing, but all the equity going to the landlord is totally another, and that should be stopped. In one case in which I was involved in Plantation Wharf, someone was at risk of losing £600,000 over a disputed bill of £7,000.

Secondly, the commitment to bring in a ground rent cap has not come forward but it must be introduced. I acknowledge that I have a share of a small block of leasehold flats in Worthing where I have a home, and I own another leasehold property that I let out, but I will not benefit from this because I have negotiated with my landlord that they will pay the ground rent for the next 30 years, which will see me out. We need a ground rent cap. We know that ground rent turns to peppercorn if there is a legal extension, and we ought to get to that as fast as we can. If on the way we have to stop at £250 a year, that is fine.

The last thing is that we need to recognise that a move to commonhold is the only way forward to ensure an effective housing market. We ought to stop new residential leasehold properties being sold, and we ought to find a way to help existing leaseholders avoid facing penalties from external landlords, who can go into all sorts of bad behaviour, whether on insurance commissions or other ways of taking money off leaseholders improperly. That would be in the interests of both landlords and leaseholders.

I congratulate the Government and thank the Minister for his attendance. I am very grateful to the Opposition for helping persuade the Prime Minister that this Bill could come forward in this last Session of this Parliament. I claim the credit because on the Tuesday before the King’s coronation, I was standing with the Prime Minister and the Leader of the official Opposition and I said to the Prime Minister that the Opposition would help him—Rishi looked at Keir, Keir nodded, and now we have the Bill.

[Jeff Smith (Manchester, Withington) (Lab)]

On that note, may I on behalf of the Opposition also welcome this Bill? We are pleased that the disagreements down the other end of the building have been resolved and that it can go forward. It is not perfect, as the Father of the House has pointed out, and I hope that a future Labour Government will take the next steps that we need. It is a step forward, so we are pleased to support this legislation going on to the statute books this evening.

[Jacob Young]

With the leave of the House, I pay tribute to all the staff and Clerks here, the countless campaigners on the rights of leaseholders and some of those mentioned by my hon. Friend the Member for Worthing West (Sir Peter Bottomley), the brilliant parliamentary champions of the Bill, including my hon. Friend himself, the officials who have worked so hard to deliver the Bill, and indeed my private office and officials for their work on the Renters (Reform) Bill, which sadly has not made it through the wash-up today, such is the nature of a snap general election.

Renters (Reform) Bill

Jeff Smith Excerpts

Report stage
Wednesday 24th April 2024 Commons Chamber

Finally, I will talk through the measures that we are adding to the Bill to ensure that it is implemented effectively—again, I acknowledge the contributions of other Members, given voice by my hon. Friend the Member for Totnes—so that these reforms deliver for all and avoid unintended consequences. We have been clear that section 21 of the Housing Act 1988 will be abolished when we are confident that the county court system is ready, and we are taking significant steps to ensure that it is. We have invested £1.2 million for His Majesty’s Courts and Tribunals Service to deliver a new end-to-end online possession process. The Government accept that we need to assess the operation of the county court possession process as we deliver our tenancy reforms. An efficient court system is critical to ensuring there is confidence in the new tenancy system. Government new clause 30 therefore requires the Lord Chancellor to prepare an assessment of the operation of possession proceedings for rented properties, and for that assessment to be published before section 21 can be abolished for existing tenancies.

[Jeff Smith (Manchester, Withington) (Lab)]

If the Government are putting all that money in and doing all this planning, why can the Minister still not give us a date for when it will happen?

[Jacob Young]

As I have just said, we have always been clear that we will abolish section 21 when we are confident that the county court system is ready. I cannot give the hon. Gentleman a date today because I cannot say until we are confident that the county court system is ready, but as I have said, we are investing £1.2 million for HM Courts and Tribunals Service to deliver the new process. It is important for him to recognise that if the court system is not ready when we make this change—the biggest change in 30 years—it will not benefit tenants. It will not benefit landlords, but it will certainly not benefit tenants.

Holocaust Memorial and Learning Centre

Jeff Smith Excerpts

Thursday 21st July 2022 Commons Chamber

[Paul Scully]

I will be speaking to both candidates about a number of things, including this matter. I was supposed to be getting a briefing on this from my team today, as I am new in post. Clearly, there is a lot to bring to this issue, and we need to make sure that our candidates understand the feeling of the House.

[Jeff Smith (Manchester, Withington) (Lab)]

A report from the Community Security Trust was released last week on antisemitism in the pandemic. It outlined a very disturbing case in Manchester, my home town, of Jewish people being targeted for spreading covid. Fortunately, the perpetrator was arrested and jailed for six months, but does that not just demonstrate that this does not go away and that there is always an excuse? That is why it is absolutely crucial that we have the national centre to educate future generations on this issue.

[Paul Scully]

The hon. Gentleman is absolutely right. The reason that we are talking about Victoria Tower Gardens is that it is next to Parliament. This is not a London memorial. We are talking about a national memorial, sitting next to the centre of our democracy. He is absolutely right: antisemitism does not start and stop within the M25.

Sharing Economy: Short-term Letting

Jeff Smith Excerpts

Thursday 16th June 2022 Commons Chamber

[Jeff Smith (Manchester, Withington) (Lab)]

I congratulate the hon. Member for Cities of London and Westminster (Nickie Aiken) on securing the debate and on her opening speech, which set out the issues really well. We have also had excellent speeches from my hon. Friends the Members for York Central (Rachael Maskell) and for Westminster North (Ms Buck). What has been noticeable, as we have just heard, is the consensus here. We may be small in number, but we all recognise the issue and we all recognise that it needs to be tackled. The fact that there are not many people in the Chamber may be because it is not a controversial proposal.

Britain is a fantastic country, with a wealth of exciting places to visit: our remarkable cultural heritage; our world-class attractions and events; our incredible scenery; our coastal towns and vibrant cities, and our amazing capital city. But the tourism sector has really suffered as a result of the pandemic, and its recovery has been much slower than other sectors. VisitBritain found that the UK’s tourism sector lost a total of £146 billion over 2020 and 2021—around £200 million per day.

The tourism sector in the UK is recovering at a slower rate than that in Europe and the USA. We have tourism recovery plan targets and a review of destination management organisations gathering dust on the shelf. Despite that, we know that we will recover. People are already returning to big events. In Manchester, last week, we had one of our biggest weekends ever, with lots of huge events around the city, with hotel rooms packed, bars packed, and Airbnbs packed. The inbound tourist trade is picking up as well. Domestic or tourist visitors want somewhere affordable and convenient to stay. Short-term lets have helped many people to do this, encouraging people to holiday domestically in the UK and housing people from abroad. That is generally good, notwithstanding the difficulties for some hotel operators that were identified by the hon. Member for Edinburgh East (Tommy Sheppard). We want those holidays, those visits and those day trips to continue and to grow.

However, short-term letting is only a good thing if it is sustainable and strengthens, rather than weakens, communities. As we have heard today, in many places, housing supply, local services, safety and wellbeing are affected by the trend towards short-term lets. Properly managed, short-term lets can have real benefits: they can increase housing options, especially at peak times —I have used Airbnb for Labour party conference accommodation, so I know how it can add capacity when all the hotels are packed out for conferences—they can ensure that empty rooms can be used efficiently and they give people an opportunity to make a little extra money.

A residential property that is being used for Airbnb, however—I use Airbnb as a kind of shorthand, but it is the clearly the market leader in this area—can cause the kinds of issues for residents that we have heard articulated so well today, and can take that property out of the residential housing market.

[Mrs Natalie Elphicke (Dover) (Con)]

The hon. Gentleman mentions Airbnb. In the town of Deal, which I represent, there is a particular problem of Airbnbs that are not registered. Does he agree that having a registration system for Airbnbs would be a sensible move to protect coastal communities and tourism in areas such as mine?

[Mr Deputy Speaker (Mr Nigel Evans)]

I was hugely generous, and so was the Front-Bench spokesman, in allowing that intervention, for obvious reasons.

[Jeff Smith]

The hon. Lady makes an important point. I will come on to registration, but clearly we do need to look at the options.

We have heard about the problems caused, with residents citing health and safety concerns where temporary residents are not familiar with or do not care about safety rules. There are issues with short-term rentals being used for parties, and we have heard about noise and antisocial behaviour. However, the longer-term concern, which I think is probably the more significant, is around the sustainability of communities when too many residential properties become short-term lets. I will talk about that in a second.

In London, as we have heard, the law currently allows short-term letting of residential properties for a maximum of 90 nights in a calendar year without planning permission. Since 2017, Airbnb has automatically limited entire home listings in Greater London to 90 nights per calendar year, to encourage compliance with that law. By February 2020 two similar platforms, HomeAway and TripAdvisor, had also implemented a cap. The Mayor of London has encouraged other platforms to do the same, but there are easy ways around those rules, as we heard earlier, and many properties are still being let out on a short-term basis for more than the permitted 90 nights. When the 90-night limit is exceeded illegally, the issues are compounded and likely to grow and grow.

Outside London, there is no specific limit on how long a property can be let out on a short-term basis, and it is up to local planning authorities to judge whether the letting amounts to a material change of use and requires planning permission. As well as the difficulties that we have talked about for residents, as my hon. Friend the Member for Westminster North pointed out, the complaints about antisocial behaviour are putting pressure on local authorities and their resources, already overstretched following years of Tory and coalition Government cuts to local authorities. That puts huge pressure on local enforcement teams.

The hon. Member for Cities of London and Westminster (Nickie Aiken) is calling for the introduction of a licensing scheme, making it mandatory for anyone renting out their property on a short-term basis to have to register it. That would make it easier for local authorities to tackle some of those issues and the law-breaking that might arise. I pay tribute to my hon. Friend the Member for Westminster North for her consistent campaigning on this issue and her work over a number of years, calling on the Government to give local councils more powers to manage how properties are used for short-term rentals. Those are all proposals that must be looked at seriously by the Government.

I know from my own constituency in south Manchester the problems that occur when houses become party let houses. It used to be in my area that it was only the student houses in multiple occupancy that became party houses and posed a real problem for long-term residents, but now a lot of our houses are let out by Airbnb and are causing real difficulties for the long-term residents with noise, litter and disturbance.

The hon. Member for Edinburgh East talked about control zones. When I was a councillor in Manchester, we introduced an article 4 direction to limit the number of HMOs that could be permitted in an area, and that kind of innovative approach is something we need to look at. It would be interesting to see how the control zones in Edinburgh work and how we can learn from them.

As well as the kinds of problems that my constituency and other urban areas are experiencing, the prominence of second homes and short-term lets is causing a housing and public services crisis in popular tourist destinations across some of the more rural parts of the UK. Cornwall, Cumbria, Northumberland, the west country, Shropshire, parts of Yorkshire, the Scottish highlands, as we have heard, and rural Wales have all suffered. To thrive, communities need investment, employment opportunities and, in many cases, thriving tourism industries, but they also need affordable homes for local people. Accelerated by the pandemic, many of these areas have seen house prices soar and availability drop as wealthy outsiders buy up second homes, often for buy-to-let, and then they discover that owners can often get more money from a short-term let than from a long-term tenant.

Properties that were previously for permanent rental are being turned into Airbnb holiday lets, which impacts directly on the affordability and availability of local homes, particularly for local first-time buyers and private renters. It also means that houses are left empty for large chunks of the year, reducing permanent populations. That can have pretty disastrous impacts on the local community, such as: school closures, because families are forced out and schools become unsustainable; cuts to transport services and buses; and health and other services disappearing as demand drops.

It seems pretty clear that the Government need to explore whether and how local authorities can be provided the powers to tackle this issue. We have heard a few examples. We can introduce licensing regimes for second homes and short-term lets, we can consider giving councils greater discretion over council tax regimes and we can look at allowing local authorities to levy more premiums or surcharges on second homes and long-term empty properties, if they believe it is needed in their locality. Some local authorities are backing calls for more powers in planning to recognise short-term rentals as a different use class, meaning that people who want to use their home exclusively for Airbnb would need planning permission. Local authorities could control how their local areas operate in a number of ways.

It is welcome that the Government committed to launching a consultation on the introduction of a tourist accommodation registration scheme in England. So far, we have seen no sign of it. It was promised in early 2022. We are mid-June, so we have probably passed “early 2022”. I would be very happy if the Minister could confirm when the consultation will open and how long it will run for. While we continue to wait for it, I welcome the news that the Labour Mayor of London has just launched his own consultation on the issue. I encourage everyone in London affected by this issue to participate before the consultation closes on 4 July.

The rise of Airbnb is just one example of the emergence of the sharing economy. Many businesses have become everyday fixtures of our modern lives. At their best, these platforms can be about reducing waste, pooling space, skills and items, and making life easier and more sustainable, but it does not always work like that, and when it becomes commercial, it can cause difficulties. When Airbnb and similar websites first emerged, it was about individuals occasionally making a bit of extra income on their spare room or own property, but things are very different now. A large part of the short-term rental market is now a wholly commercial enterprise. Residential properties are being used as letting businesses without the required planning permission, local authority oversight or protections for neighbours and communities. We clearly need to respond now to that different context.

Let us learn from the examples we have heard about from abroad. Let us look at the changes in Scotland and elsewhere. Airbnb has said that it is willing to work with the Government on regulation to ease some of the challenges to which it is contributing. It published a healthy tourism commitment and the “Short-term Lets Registration White Paper”, which calls for the introduction of a simple nationwide registration scheme for the short-term lettings sector.

The willingness is there from stakeholders. The political imperative is there, I would argue, and the political consensus is there that we need to get a grip of this. The need is certainly there, as has been well articulated today. It is now time for the Government to act, to start to tackle this issue and to get the balance right for our communities.

Oral Answers to Questions

Jeff Smith Excerpts

Monday 29th November 2021 Commons Chamber

[Michael Gove]

My right hon. Friend makes a very good point. East Lancashire and its success must be at the heart of a successful approach towards levelling up. Whether it is Rawtenstall, Bacup, Blackburn or Burnley, we need to ensure that all communities in east Lancashire feel they have the right investment not just in transport, but in skills, schools, and ensuring that streets are safe and communities can take back control.

[Jeff Smith (Manchester, Withington) (Lab)]

HS2 and Northern Powerhouse Rail were never just about train lines and journey speeds; they are about regeneration opportunities. In the case of the cancelled eastern leg, 38,000 homes were planned on the back of that line, which now will not happen. Some £38 billion of economic growth in Bradford, reliant on Northern Powerhouse Rail, has been cancelled. Local government leaders in the north are united in their opposition to the £18 billion reduction in rail investment plans. Is the north not once again being let down rather than levelled up?

[Michael Gove]

I would contest that. Although the hon. Gentleman is absolutely right to say that the integrated rail plan creates opportunities for broader regeneration, it is important to recognise that transport is not the only tool that can promote regeneration across the midlands and the north of England. The work that Homes England does in making sure we can unlock the potential of brownfield sites for regeneration is critically important. I appreciate the disappointment felt by communities in Bradford and elsewhere, but there is more to come, both in transport and other investment, that will ensure that we meet our shared objectives to spread opportunity more equally across the geography of England.

Oral Answers to Questions

Jeff Smith Excerpts

Monday 25th October 2021 Commons Chamber

[Kemi Badenoch]

I apologise to the hon. Lady, but I am not sure, given her reference to COP26, what sort of answer she is expecting. I can ensure that she gets a letter providing further information.

[Jeff Smith (Manchester, Withington) (Lab)]

Even if we add up all the piecemeal pots of regeneration funding that the Government like to mention in their press releases, they still come to nowhere near the £15 billion that has been cut from local councils under the Tories. The Government have failed to deliver on promises to reimburse covid costs, and the Tory-led Local Government Association says that there is now £2.6 billion in non-covid cost pressures on councils. On Wednesday, the Chancellor has the chance to tackle the council funding crisis that the Government have created, so what demands have Ministers in this team made to get the Budget settlement that all our towns and cities need?

[Kemi Badenoch]

I cannot comment specifically on what will be announced in the Budget this Wednesday, but I will tell the hon. Gentleman what, for instance, we did in the most recent local government finance settlement. In this year’s settlement, we made available an increase in core spending power in England; it will go from £49 billion this year to £51.3 billion in 2021-22—a 4.6% increase in cash terms. We see ourselves as a supporter of local government across the country; we very much speak up for it in our discussions with the Treasury, and I am sure that will become apparent on Wednesday.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Jeff Smith Excerpts

Report stage & 3rd reading
Thursday 9th September 2021 Commons Chamber

[Jeff Smith (Manchester, Withington) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

New clause 2—Guidance on non-domestic rating and coronavirus—

‘(1) The Secretary of State must, no later than three months from the day on which this Act is passed, publish guidance for local government bodies on the application of—

(a) the provisions of section 1 of this Act, and

(b) the wider local business support policy framework associated with that section.

(2) In preparing the guidance the Secretary of State must consult—

(a) independent experts, and

(b) representatives of companies whose non-domestic ratings determinations are affected by section 1.’

This new clause would require the Secretary of State to publish guidance to local government bodies on the application of the provisions of section 1 of this act. This guidance must be prepared following consultation of independent experts and businesses whose business rates appeals are affected by section 1.

Government amendments 1 to 6.

[Jeff Smith]

I am conscious that we have an important debate to follow and that time is pressing, so I shall be relatively brief. Labour’s broad support for this Bill has not changed. We recognise the urgent need to support businesses, as well as the Valuation Office Agency, and the need to close a legislative gap exploited by unscrupulous directors. The Bill remains lacking in some safeguards. Labour attempted to correct that in Committee, but we were unsuccessful. The new clause is concerned with the resourcing and capacity of the Insolvency Service to deal with the new measures relating to directors of dissolved companies.

As we heard from witnesses in July at the evidence sessions, unscrupulous directors can cause significant suffering to those who have invested in or loaned to their companies. Too often, these directors are able to absolve themselves of their financial responsibilities by dissolving their companies and creating a financial and time barrier to holding them to account. So clauses 2 and 3 of the Bill allow for a director to be investigated and disqualified before their company is restored. That plugs the important gap and is a welcome measure; it removes a costly barrier, both in monetary and time terms, to accountability and financial responsibility.

However, as Duncan Swift, the former president of R3 highlighted in the Bill’s evidence sessions, these provisions could see the Insolvency Service take on 10 to 15 times the number of investigations it currently undertakes. Despite that potential increase in workload, there is no indication in the Bill that the Government plan to increase funding and resources at all for the Insolvency Service, let alone to do so by the significant amount it might need to allow it to cope with the extra investigations. So Labour is calling for new clause 1 to be added to the Bill to ensure that there is appropriate, regular oversight and scrutiny of the Insolvency Service’s ability to carry out this increased workload. If it is not given the resources to carry out its increased responsibilities, clauses 2 and 3 of the Bill become, in effect, redundant. New clause 1 would ensure that parliamentarians and others are kept updated on the Insolvency Service’s ability to carry out its tasks and on any need it has for extra resources. We do not intend to press the new clause to a vote, but we think it is important to make this point, particularly given that the Insolvency Service cannot apply to court for the disqualification of a director whose company has been dissolved for more than three years. That means that the Insolvency Service does not just need extra resources to carry out the additional investigations; it needs them to carry out those investigations promptly, within that three-year timeframe.

As Dr Tribe summarised:

“The Insolvency Service needs to be properly funded to ensure that this additional disqualification work can happen.”––[Official Report, Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Public Bill Committee, 6 July 2021; c. 18, Q29.]

Although this Bill goes some way to helping tackle financial corruption, the Government could and should go further. The Bill is too narrowly defined for any financial amendments, but the Government could provide a stronger deterrent, beyond disqualification, for unscrupulous directors.

Let me briefly turn to the other new clause and amendments. New clause 2 stands in the name of the hon. Member for Richmond Park (Sarah Olney) and we do not disagree with it. However, we think we do not have to wait for this until the day the Act is passed. It is clear that there is cross-party support for the Bill, that it will pass and that businesses are desperate for support in the current circumstances. So we see no reason why indicative guidance cannot be published and sent to local authorities, as well as possibly indicative amounts for the grants that local authorities will receive, so that they can get on quickly with designing their schemes, ready for when the Act passes. I make the point that we made in Committee that this should not be on a per-head basis; it should take into account the effect of the pandemic on different regions and on different sectors of the economy. I also note the Government’s technical solution, which allowed the backdating of these grants so they effectively apply this financial year.

--- Later in debate ---

[The Minister for Regional Growth and Local Government (Luke Hall)]

I welcome the contribution from the hon. Member for Manchester, Withington (Jeff Smith). I shall start by responding to new clause 1, tabled by the hon. Member for Feltham and Heston (Seema Malhotra) and the hon. Gentleman. I am grateful to him for his constructive words and the way in which he has approached the debate.

The new clause would require the Secretary of State to report to Parliament on the number of directors investigated and disqualified under the new provisions in the Bill every three months from the date that the Act is passed. I am grateful to hon. Members for the opportunity to confirm to the House that statistical reporting is routinely undertaken by the Insolvency Service. Regular three-monthly releases cover company insolvencies across the whole UK as well as individual insolvencies in England and Wales. The releases also contain underlying data and are published and available online to everybody.

As well as that, since the start of the pandemic, the Insolvency Service has been publishing experimental monthly releases of data concerning insolvency numbers. This was so that the statistics could act as an indicator of the impact of the pandemic on insolvencies. It may be of particular interest to hon. Members that the Insolvency Service also releases monthly updates about its enforcement activities. This information includes not only the number of companies wound up in the public interest, but the number of disqualification orders and undertakings broken down by the relevant section of the Company Directors Disqualification Act 1986, under which they were sought. Going forward, these numbers will include any orders or undertakings obtained as a result of this new provision. The reports also include information on lengths of periods of disqualification. Furthermore, there is an annual report on the nature of the misconduct being alleged.

I hope that the hon. Gentleman is reassured that a large amount of information is already provided that can be accessed easily through a quick online search and that future reports of enforcement outcomes will include any disqualifications made against former directors of dissolved companies. I would be grateful to him for withdrawing his new clause.

Let me just add one last point. The hon. Gentleman also mentioned the new burdens on councils. I somewhat couched my answer the last time we spoke about it, so I just want to put on record that we will absolutely be meeting the new burdens cost, including the associated administrative and IT costs.

[Jeff Smith]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Clause 1

Determinations in respect of certain non-domestic rating lists

Amendments made: 1, page 1, line 2, for “an English” substitute “a rating”.

This amendment and Amendments 2 to 6 extend the application of Clause 1 to non-domestic rating lists compiled for the purposes of business rates in Wales (as well as lists for England).

Amendment 2, page 1, line 5, for “an English” substitute “a rating”.

See the explanatory statement for Amendment 1.

Amendment 3, page 1, line 8, for “an English” substitute “a rating”.—

See the explanatory statement for Amendment 1.

Amendment 4, page 2, leave out lines 22 and 23.

See the explanatory statement for Amendment 1.

Amendment 5, page 2, leave out lines 28 to 35.

See the explanatory statement for Amendment 1.

Amendment 6, page 2, line 40, at end insert—

‘“rating list” means a local non-domestic rating list or central nondomestic rating list under Part 3 of the LGFA 1988.’.—(Luke Hall.)

See the explanatory statement for Amendment 1.

Third Reading

--- Later in debate ---

[Jeff Smith]

I will again be brief, because we set out our concerns on Second Reading and in Committee, I am aware that this might not be seen as the highlight of the parliamentary week by Members, and there is an important debate to follow.

As we said, we have always supported the Bill’s broad aims. We want to see support administered quickly for businesses that have been affected by covid and have missed out on business rates relief. We accept that ruling out material change of circumstances claims, but instead administering the bespoke £1.5 billion fund, will probably be the best way of doing so in the current circumstances. We also support the aims of clauses 2 and 3, which would close the legal loophole and give the Government the power to investigate and disqualify unscrupulous or unfit company directors.

I welcome the Government’s decision to extend the provisions of clause 1 to apply in Wales, which has been welcomed by colleagues in the Senedd. I also welcome the Government’s decision to ask local authorities, when it comes to administering the fund, to award relief against the liabilities of ratepayers for the current financial year—2021-22—as a way of getting around the restrictions on the business rates legislation so that they can effectively award it against the previous year. It is a technical solution to a technical problem caused by the timing of the funding, when it is eventually released. Local government colleagues assure me that they are happy with this.

Again, I emphasise the fact that we need to get this relief out to businesses as quickly as possible. The rates relief was announced in March and not a penny has yet been paid out. I do not think we need to wait for the end of the Bill proceedings to get indicative guidance to local authorities to design their schemes.

There are still concerns about the resourcing of the Valuation Office Agency and the Insolvency Service and how funds will be recouped and actions taken against unfit company directors. I hope that the Minister will take those concerns into further consideration.

Finally, I thank the Minister for his engagement with me and my hon. Friend the Member for Feltham and Heston (Seema Malhotra) on the Bill’s finer points. I thank his officials and the many, many representatives of the business community and local authority officers who have also engaged with us during the passage of the Bill.

East Midlands Economy

Jeff Smith Excerpts

Tuesday 7th September 2021 Westminster Hall

[Jeff Smith (Manchester, Withington) (Lab)]

It is a pleasure to see you in the Chair, Sir David, and I thank you for the opportunity to reply to the debate on behalf of the Opposition. I congratulate the hon. Member for Mansfield (Ben Bradley) on securing the debate. I agree with him that the Government need to come down on the side of investment and innovation in the region.

I also thank the other speakers, who made important contributions. My right hon. Friend the Member for Derby South (Margaret Beckett) gave us an important reality check on the Government’s actions and made the vital point that, in order for the economy to flourish, work needs to be properly paid. We need stability and skills, without which businesses and the economy cannot thrive. My hon. Friend the Member for Nottingham South (Lilian Greenwood) made an important point about the cut to universal credit, which is taking money out of local economies. She also exposed the lack of transport investment in the region over a long period of time.

My hon. Friend the Member for Chesterfield (Mr Perkins) talked about the importance of HS2 and focused on the inequality of transport spending in the region—not just on rail, but on things such as the Staveley bypass. Road transport is important as well. My hon. Friend the Member for Nottingham East (Nadia Whittome) talked about the impact of Government policy and cuts, the vital importance for the future of green jobs, and transparent devolution deals.

We have heard lots of good words about the future of the east midlands economy. The east midlands does not operate as a single entity, with a regional centre, like my own in Greater Manchester, which is why so many Members from different parties have spoken about how vital transport links are, which I will return to shortly. It is instructive to compare the east midlands with other regions. Compared with the rest of the country, east midlands GVA growth figures are lower and there are lower levels of investment, especially Government investment. Productivity is lower, more people than average are in insecure work, a higher number on zero-hours contracts and median gross pay is lower. Of the 446,000 key workers across the east midlands, 40% are paid less than £10 an hour. There is work to do to fulfil the great potential of the region.

People in the east midlands are significantly more likely to be employed in manufacturing than in the rest of the UK. That is a distinctive, important and good feature of the region, although a number of those jobs are in lower-value manufacturing, which is more susceptible to economic shocks. With traditional manufacturing in decline, it is important to consider alternative options for the future. We have heard from several Members about good work already underway, seeking to boost jobs and prosperity in the east midlands, and release the potential of the region that we have heard about so often.

The importance of East Midlands airport, along with the rail freight terminal, is key. A number of Members talked about that and the work of the East Midlands Development Corporation in aiming to link the HS2 station at Toton with the airport. We also heard about the development at the Ratcliffe-on-Soar power station site, which is another important growth opportunity for the region. There is good partnership work going on, driven by groups such as the midlands engine partnership and Midlands Connect. We also heard about the plans for the east midlands freeport. Many might question the overall strategy of freeports creating growth across the country, but it is undoubtedly a good opportunity with potential for the east midlands region.

We have not focused so much today on the hard work carried out by local authorities, which have been at the frontline fighting the covid pandemic, and will now play a crucial role in their communities’ recovery. They need to be funded properly, so that they can play their full role as place-makers, driving growth for the region. Having imposed £15 billion cuts on local authorities over the past 10 years, unfortunately the Government recently broke their promise to compensate local authorities fully for their costs in tackling covid-19, leaving some of them with very big funding gaps and putting local services at risk.

The piecemeal funding pots that we have heard about, such as the levelling-up fund, which pit regions and nations against each other for vital funding, do not make up for a decade of cuts to local communities. We need support for people who live in the region, as we heard from my hon. Friend the Member for Nottingham East. The universal credit change will hit almost 390,000 families in the east midlands, pushing many into hardship. Cutting the budgets of those families who need it most is not only wrong, but bad economics. That £1,000 a year is money that could be spent on local high streets in the east midlands. Instead, it will be taken out of the economy just as we are trying to recover.

It is clear that East Midlands airport is key for jobs in the region and future economic ambitions but, like other regional airports, it has suffered through the lack of an adequate sectoral support package from the Government. The Labour party has advocated a sectoral deal for aviation that protects jobs and the wider supply chain, safeguards the environment, and ensures that companies benefitting from the aviation sector rebase their tax affairs in the UK. If regional airports such as East Midlands airport are not given adequate help through the challenges of covid, the local economies that depend on them will be undermined.

We have heard a number of times that a key priority for the region should be improving connectivity. The eastern leg of HS2 is vital for economic growth in the east midlands. The potential indefinite postponement would be a massive blow to the economies of the cities and counties of the region. I look forward to assurances from the Minister that the leg will go ahead as promised, as requested by many Members this morning. If this is another broken promise from the Government, it will be a betrayal of the communities in the east midlands.

[Mr Perkins]

My hon. Friend is right about the uniformity of view that the east midlands has had a poor deal from this Government. We expect, during such debates, for Labour MPs to be critical of the Government; that is the role of the Opposition. However, were we to put together a Facebook video of the criticism of the Government in the debate, it would include excellent speeches from the hon. Members for Loughborough (Jane Hunt), for Rushcliffe (Ruth Edwards) and for Broxtowe (Darren Henry) about the east midlands being left behind under a Conservative Government. Those, too, would be compelling pieces of evidence.

[Jeff Smith]

My hon. Friend makes an important point. I hope that the Minister is listening to his own side, not just to Labour. We have been making this case for a long time, but it has been made strongly, as my hon. Friend says, on both sides of the Chamber.

There is a strong view that the biggest single thing that the Government could do for the east midlands economy would be to improve transport and connectivity, including the full electrification of the midland main line—a continuation through Leicester up to Sheffield. Apart from the environmental benefits, that would reduce journey times north and south. There is the Robin Hood line and the restoration of direct trains from Leicester to Coventry: the only significant cities anywhere in the UK that do not have a direct rail connection. A Government commitment to those kinds of transport investment would be real evidence of levelling up for the east midlands, which has, as we have heard a number of times, the lowest transport investment in the UK.

The final issue that I will mention, though certainly not the least of them, is the emergence of new green industries, which has, again, been mentioned by those on both sides of the Chamber. Labour believes that it should be a priority of the Government to bring forward a green new deal and an ambitious package. We are proposing £30 billion of capital investment to support the creation of up to 400,000 new low-carbon jobs. There is engineering and manufacturing expertise in the east midlands that should be well placed to make the most of those new opportunities, and the east midlands should get its share of the jobs of the future.

Labour wants to see the east midlands thrive, along with our regions up and down the country. We need to address regional imbalance. The UK economy was already highly regionally imbalanced—perhaps the most regionally imbalanced major economy in Europe—well before covid hit. The pandemic restrictions have made existing inequalities worse. The uneven impact of lockdown on different sectors means that some areas have been much more affected than others, and the Government’s ill-defined levelling-up concept needs to address those inequalities. It must mean good-quality, secure work and job creation that helps us meet our climate ambitions. It has to mean a fair social security system for anyone who cannot work, whether due to economic shocks or illness.

Future economic success must mean the Government giving local areas the investment that they need to recover from the covid pandemic and rebuild strongly, with opportunities on everybody’s doorstep. We cannot afford any more broken promises from this Government. That is our challenge to the Minister.

[Sir David Amess (in the Chair)]

The Minister will now respond to the debate, but please leave a couple of minutes for Mr Bradley to close proceedings.

Oral Answers to Questions

Jeff Smith Excerpts

Monday 19th July 2021 Commons Chamber

[Luke Hall]

The point of delivering the funding in the way we are is that it is localism in its truest form. We are asking local areas to come up with solutions to the problems that they are telling us they face. We certainly do not believe that the Scottish Government have a monopoly on good ideas for improving Scottish communities. That is why we have asked them to come forward with us, and of course we want to work closely with communities in Scotland and build that long-lasting, strong relationship so that we can bind together our precious Union for many, many years to come.

[Jeff Smith (Manchester, Withington) (Lab)]

In his speech last week on levelling up, the Prime Minister made a plea to the public to email him with ideas for how to flesh out his so far very vague concept of levelling up. Can the Minister tell us how many emails the Prime Minister has received so far and whether any of them contained a plan with any more substance than the Government’s?

[Luke Hall]

Considering the lack of ideas from the Labour party in opposition, I am loth to suggest that that question was ultimately predictable. If Members look at the work we are already doing on levelling up, they will see the £4.8 billion levelling up fund for regenerating town centres and high streets and upgrading local transport networks. They will see the UK shared prosperity fund, which will start from next year. They will see the £220 million of new investment through the UK community renewal fund. They will see the 101 town deals that the Prime Minister announced last week. They will see us progressing towards delivering 300,000 new homes a year by the middle of the decade. They will see the £3 billion we are investing in the city and growth deals, the devolution programme and the freeports we are delivering. In contrast, we see a Labour party with no ideas for levelling up anywhere in the country. All it has is a struggle to reconcile itself to the fact that it is this Conservative Government who are spending money to support the communities that it neglected for so many years.

Town Deals: Covid-19 Recovery

Jeff Smith Excerpts

Wednesday 14th July 2021 Westminster Hall

[Jeff Smith (Manchester, Withington) (Lab)]

It is good to see you in the chair, Mr Rosindell. I appreciate the opportunity to respond on behalf of the Opposition,. I congratulate the hon. Member for Southport (Damien Moore) on securing the debate. Southport is a town I have enjoyed visiting but did not know it was the model for Parisian boulevards—never let it be said that Westminster Hall debates are not educational. I agree about the need for good connectivity to Manchester so my constituents can enjoy the Southport Eye, and I look forward to seeing it.

This is an important topic and useful opportunity to look closely at what the Government has promised under the town deals, how much has been delivered and to consider whether this the right way to drive recovery from covid-19. I thank the Members who have spoken in this debate. We have heard about the importance of reasonable private rents, need for reform of business rates, shopping local and wider access to funds. The hon. Member for Leicester East (Claudia Webbe) made important points about areas that have been left behind under austerity.

Labour wants to see towns up and down the country thrive, and we are pleased for any community that has managed to receive funding from the towns fund, but we have to put this into context. There is a reason why so many towns are struggling, in desperate need of investment, regional inequality is rife in this country, and high streets are at breaking point. It goes back far beyond the covid crisis. The Government likes to talk about levelling up, but over the last 10 years they have imposed £15 billion cuts on local authorities. I hardly need to point out that outweighs the one-off £3.6 billion towns fund that will benefit a minority of English towns. The pandemic has heaped even more pressure on local councils, but the Government have broken their promise to fully compensate them for the costs of tackling covid-19, leaving a further gaping funding gap to cover and forcing many to raise council tax to cover costs, making local families pay.

The long-term decline of the UK’s high streets, with footfall down 10% since 2012, has complex reasons behind it and has left around one in 10 high street shops standing empty, even before coronavirus hit. In the past decade, 773 libraries, 750 youth centres, 1,300 children’s centres and 835 public toilets have closed down largely because of austerity. In addition, our social care system is in crisis. After several years of kicking the can down the road, the plan for reform, which the Prime Minister claimed he had already prepared, has not been forthcoming. Families, care staff and local authorities are crying out for that plan. Most recently the Government appear to have confirmed our worst fear: the Chancellor intends to proceed with the £20 cut to universal credit from September, which will push more than half a million people, including 200,000 children, into poverty. How can the Government claim they are about levelling up one day and plunge some of our least well-off citizens into difficulties the next? That is not the way to recover from covid-19.

Even if administered fairly, the towns fund would only act as a sticking plaster over these problems. However, we do not know if it has been administered fairly because, typically of this Government, the allocations process is—I am being generous here—opaque. Let us not forget that a town in the Secretary of State for Housing, Communities and Local Government own constituency of Newark was selected for funding under the towns fund by the then Communities Minister, the right hon. Member for Rossendale and Darwen (Jake Berry), while the current Secretary of State selected Darwen in the former Minister’s constituency.

The allocation should have been a fair and open process but instead Ministers seem to have stitched up back-room deals that aim to funnel money into relatively wealthy areas and away from those who need it most. Ministers refused to consult directly with elected mayors with the process concerning towns in their regions, despite the Government’s own officials explicitly recommending that they do.

Investigating the allocation process for the towns fund in November 2020, the Public Accounts Committee said:

“The selection process was not impartial…The justification offered by ministers for selecting individual towns are vague and based on sweeping assumptions. In some cases, towns were chosen by ministers despite being identified by officials as the very lowest priority…The Department has also not been open about the process it followed and it did not disclose the reasoning for selecting or excluding towns. This lack of transparency has fuelled accusations of political bias in the selection process, and has risked the Civil Service’s reputation for integrity and impartiality.”

If the Government have nothing to hide, why not be transparent about the decision-making process?

For those who have been lucky enough to get some funding, it is now almost exactly two years since the towns fund was announced and the Government are still vague about what they actually hope to achieve using the fund and how they intend to measure success. Since the fund was announced, only 5% of the money committed so far—£90 million out of the promised £3.6 billion—has been paid out. Heads of terms have only been agreed with 53 of the towns, and it is unclear whether one single project has been delivered in full. In fact, there is a concern that, with so many delays, some projects may not be viable by the time the Government have finally stumped up the money.

The Government say they are aiming to deliver town deals by 2025-26. In a time of severe economic downturn following the pandemic and with support such as furlough ending and universal credit being cut, we need to support the covid recovery with a sense of urgency and boost local areas in that context. It only fuels the suspicion that the Government are more interested in stretching out the announcements when it most suits them, rather than urgently stimulating local growth and job creation.

If we want the towns fund to help with the recovery, how do we know if it is working? In a written answer earlier this week, the Minister said:

“The Department will publish a monitoring and evaluation strategy for the Towns Fund. This strategy will set out the evidenced framework and theory of change, which underpin the evaluation methodologies for the Towns Fund, a work plan, timeline and key milestones, and a bibliography.”

Two years after they announced the fund, the Government say they “will publish” their strategy, so they have still not laid out how they are going to monitor and evaluate the fund.

Any funding for our towns is better than no funding at all, and Labour supports those who have been lucky enough to get something, but what about the majority who have not? This is, after all, the same Department that has announced a levelling-up fund that again pits regions and nations against each other for crucial funding and that will hand money to wealthy areas held by Cabinet Ministers ahead of areas in greater need.

The methodology prioritised the Chancellor’s own local authority for regeneration funding ahead of more deprived areas, such as Barnsley, Flintshire, Coventry, Plymouth, Salford and the Wirral. Prioritised constituencies included those of four other members of the Cabinet. This Government cannot repair even a small part of what they have destroyed over the past 10 years using piecemeal pots of funding, let alone build back better from the covid pandemic.

Labour supports funding for every town and every region, and that has to be done transparently, fairly and with a say for local communities. Through the towns fund the Government are making promises to a minority of English towns, with many of those in need losing out. The Government need to set out a detailed account of exactly what the towns fund aims to achieve, what it will fund and, importantly, how it will measure success. Piecemeal pots of funding do not make up for a decade of cuts to local communities.

Now, more than ever, we need to give all our local areas the funding they need to recover from the covid pandemic. The real yardstick of success will be if this Government put opportunities on everyone’s doorsteps. We have seen little evidence so far that the towns fund will do that.