Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026
Lord Stoneham of Droxford Excerpts(1 week, 2 days ago)
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Lord Jamieson (Con)
My Lords, in speaking to this regret amendment in my name, I declare my interest as a councillor in Central Bedfordshire.
At first glance, the statutory instrument may appear technical and relatively uncontroversial with transitional relief, but in reality for many businesses, particularly in hospitality and leisure, the substantial underlying increase in business rates is very damaging. In fact, in many ways, it can be considered to be the straw that, so to speak, breaks the camel’s back. Our high streets, pubs, hotels and restaurants—indeed, the whole of the hospitality and leisure sector—are already under severe strain. Yet the Government, which claim that their number one priority is economic growth, have instead pursued a series of policies that systematically undermine one of the country’s most important employment-intensive and community-focused sectors. The Government have abandoned small business, and nowhere is that abandonment clearer than in their announcement on business rates in the Budget.
Increases in business rates cannot be considered in isolation. They come on top of a jobs tax through higher national insurance contributions, which have substantially increased the cost of employment and disproportionately hit labour-intensive businesses, particularly those that rely on part-time workers, where national insurance was extended further down the run. For hospitality, this is not an abstract accounting change; it is a direct tax on jobs. It comes alongside a sharp increase in the minimum wage. While we all want people to earn more money—rightly so—wage increases must be affordable if businesses are to survive.
This is a particular challenge for the hospitality and leisure sector, which employs a high proportion of younger workers, many of them working part-time. The minimum wage for an 18 year-old has risen by around 45% over the past two years. Now, on top of all this, we have rising business rates.
Analysis from UKHospitality shows that the average pub will face an increase of around 15% in business rates next year, admittedly prior to the recent announcements. With those increases compounding over time, by 2028-29 the typical pub will be paying around £7,000 more per year, with the cumulative impact approaching £13,000 over the next three years.
Hotels face an even more dramatic increase. Average bills are expected to rise by nearly £29,000 next year, reaching well over £110,000 a year by 2028-29, with the cumulative additional burden exceeding £200,000. For many operators, particularly outside London, these figures are simply unsustainable.
Let me illustrate this with a concrete example. My local pub faces a cumulative increase in costs of around £50,000 as a result of recent changes, of which around £10,000 comes from business rates alone. That is on a turnover of £800,000. This would be bad enough in isolation, but alongside this there is food price inflation of over 4%, including an alarming 30% increase in beef prices, and higher utility bills. Consumers themselves are tightening their belts, meaning higher prices leading to lower volumes, and many pubs are struggling just to stand still.
Traditionally, Christmas is when you make the money that helps you survive the winter, but my local pubs are finding that their profitability in December has dropped dramatically, and they will no longer be able to cope through the winter. The inevitable result is closures, reduced operating hours, fewer staff and pubs shutting one or two days a week. This matters because pubs are not just businesses. They are community anchors. They provide social value, local employment and vitality to our towns and villages.
Like many people, my first job was a part-time Saturday job in the retail and leisure sector. These crucial jobs give youngsters their first experience of work and the first step on the jobs ladder. This Government seem determined to remove that opportunity.
The consequences of this approach are entirely predictable. Without urgent action, and not just a temporary measure, it is estimated that more than 500 pubs will close this year alone, with the loss of jobs, investment and vital community assets that will inevitably follow. Yet instead of clarity, businesses are offered speculation. The Chancellor chose to signal another reversal—the 14th U-turn by this Government. Rather than offer clarity to Parliament, the Chancellor chose to signal it at Davos and in subsequent announcements by unveiling a targeted support package for pubs and live music venues worth over £80 million a year. This relief is time-limited and confined to pubs, while hotels, restaurants and the wider hospitality sector remain excluded from this concession.
That is in the context of a £3.5 billion increase in business rates. The Minister talked about it going up in some cases and down in other cases. Predominantly, it is going up. As Michael Kill, the chief executive of the Night Time Industries Association, said, this is
“little more than a drop in the ocean”.
It is striking that the Chancellor appears not to have absorbed the lessons of the 2025 Budget. On that occasion, as on this one, the Government allowed rumour and conjecture to run ahead of policy, creating weeks of damaging uncertainty before detail was finally provided. That uncertainty has been a major factor in suppressing economic growth.
What makes this situation all the more remarkable is the Government’s selective enthusiasm for certainty. When it comes to public sector unions, Ministers have shown themselves perfectly willing to offer generous multiyear settlements, providing stability and predictability and doing so without meaningful conditions attached. The Government will claim that the measures announced by the previous Government on business rates were temporary, as the Minister did, and linked solely to the pandemic. That is not correct. These reliefs stem from a 2019 manifesto commitment and reflected a continuing policy of choice, not a short-term emergency response.
The Government can try to point to the timing of valuations, as the Minister did, during the pandemic to explain volatility, but if this were a genuine reform, the revaluation would be broadly revenue neutral. As I said, it is going to raise £3.5 billion extra—a 10% increase in the first year alone, with further increases built in thereafter. It is nothing more than a stealth tax.
Finally, the House should note the uncomfortable contrast between the treatment of small businesses and the treatment of the Treasury itself. While local pubs are facing rising bills, the business rates at 1 Horse Guards Road, the home of the Exchequer, are set to fall by nearly £300,000. At 2 Marsham Street, which houses many major government departments including the Minister’s department, business rates will fall by over £1 million. The Treasury is happy to cushion itself while small businesses are left to absorb the shock. This House should regret the passage of this statutory instrument and urge the Government to rethink an approach that damages confidence, undermines growth and places an ever-greater burden on the very businesses on which our country depends.
Lord Stoneham of Droxford (LD)
My Lords, this is the last speech that I shall be making after midnight as Chief Whip for the Liberal Democrats, because I am stepping down at the weekend. I hope that the first thing that the next Session of Parliament does is bring in some legislation, or whatever we require, to modernise the hours of this House. It is ludicrous that we are sitting here at this time.
I will not speak for very long, because this SI is aimed at providing transitional relief to support business rate payers as they transfer to the new bills following the 2026 business rates revaluation. It is based on schemes that we have had for some time and has been improved by the Government. We will deal with extra support for public music venues when we look at the SIs on 10 February, so I am not going to go on about the impact of NI with the minimum wage and the rate valuation now. We will look more closely at those issues at that time.
We support the new structure of rates designed to shift the burden from the high street to large warehouses. The only problem that I want to raise is that the Government would do well to publish data on the impact of the revaluation on specific sectors to help analyse the need for targeted support.
Baroness Taylor of Stevenage (Lab)
My Lords, before I respond to the regret amendment, I thank the noble Lord, Lord Stoneham, for all his work as Chief Whip of the Liberal Democrat group. I am very grateful to him for everything he has done. I know that he will continue to contribute in the House, but we are very grateful for what he has done in that role.
Quite honestly, it was the party opposite that sat on their hands as our high streets crumbled around them for 14 years. Therefore, I find this simply astonishing, and the selective memory on Covid measures, again, is quite baffling. The measures were put in as a response to the situation during Covid. I will respond to some of the points that the noble Lord, Lord Jamieson, made, but I do so in the hope that, at some point, those who were part of the previous Government will have a bit of humility about the fact that we have had to come in and sort all this out, because it was left in such a mess when we took over in 2024.
In relation to the noble Lord’s comments on stealth tax, the retail, hospitality and leisure relief introduced by the previous Government in 2020 is unsustainable and was always temporary in nature. We have ended the uncertainty of that relief and replaced it with permanently lower tax rates for eligible retail, hospitality and leisure properties. We have done this in a way that is financially responsible and sustainable by funding this support from within the business rate system via the high-value multiplier for ratepayers with a rateable value of £500,000 and above.
In relation to further support for high streets, as I set out in my opening speech, the Government have introduced permanently lower multipliers, and we have also provided an expanded supporting small business rate relief scheme to help those ratepayers gradually move from the 2025-26 relief to the new tax rates by moderating their bill increases over the next three years. We went further in the announcements yesterday with the additional 15% relief for pubs and live music venues on top of the Budget package.
Birmingham: Waste Collection
Lord Stoneham of Droxford Excerpts(9 months, 1 week ago)
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The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, Members across the House will be aware of the continuing disruption caused by this industrial action in Birmingham. The people of Birmingham sit at the heart of our determination to see this strike resolved as quickly as possible. I thank Councillor Cotton for speaking with me last week and for providing me with an up-to-date briefing this morning. The work has already begun on clearing up the backlog of street waste, and the council confirmed yesterday that that backlog has now been cleared. It continues to monitor and keep on top of it, and all households are now getting at least one bin collection a week.
Birmingham faces a specific set of circumstances, and no evidence has been put forward that this issue will spread to other cities. According to the National Audit Office, Birmingham saw a 53% decrease in government-funded spending power between 2010 and 2020. We ought to see some sign of recognition of the party opposite’s role in causing the problems that Birmingham has been facing.
The bureaucratic hurdles of the Trade Union Act do not and have not prevented strikes. Our Employment Rights Bill looks to Britain’s future. It is a pro-worker, pro-business and pro-growth Bill and will create an industrial relations framework fit for a modern economy.
Lord Stoneham of Droxford (LD)
My Lords, in my experience, it is not helpful to comment on the complexities of a dispute from a distance. However, I am sure everybody in this House supports the view that this dispute should be resolved soon in the interests of the residents of Birmingham and the reputation of Birmingham.
I go back to the previous question. Given the large reorganisation of local government that is in prospect, what are the Government doing to anticipate these sorts of disputes emerging as councils merge in the future reforms?
Baroness Taylor of Stevenage (Lab)
As I said before, Birmingham faces a specific set of circumstances here. Unite is striking against Birmingham City Council’s decision to reform the unfair staffing structures, and we have to think about the 7,000 women employees of Birmingham who were effectively underpaid. That is what the whole situation that Birmingham has faced has been designed to resolve. Many other councils across the country have already dealt with equal pay issues. They go back a long way in Birmingham and are now in the process of being resolved. I pay tribute to Birmingham City Council and the commissioners supporting it for getting on with delivering this pay structure review so that they can reform it for the future. All councils have had to face this challenge. Most have done so, and we will be keeping a careful eye as we go through the reorganisation programme to make sure it does not impact further on councils that are involved in that process.
Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025
Lord Stoneham of Droxford Excerpts(10 months, 1 week ago)
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Lord Kerr of Kinlochard (CB)
We need a sense of perspective. I am a member of the Secondary Legislation Scrutiny Committee, which drew this statutory instrument to the attention of the House, primarily because we thought the Explanatory Memorandum was inadequate and did not answer a number of the questions that had been raised. I do not recall us discussing in the committee whether democracy was in danger.
Two points seem to me to be relevant. First, 18 councils sought a postponement of their elections. It came bottom-up from the councils; it was not a postponement imposed by the Government. These were postponements sought by the democratically elected representatives of the people.
Secondly, only nine of the 18 secured government agreement to the postponement of their elections, so the statutory instrument concerns only nine. Clearly, then, if this is the rights of the people being denied by the wicked Government—by the Ceausescus of the Front Bench—clearly, we are looking for the Trotskyite regimes that run the councils of East Sussex, Essex, Hampshire, the Isle of Wight, Norfolk, Suffolk, Thurrock and West Sussex. It does not feel like that to me. I do think we need to retain a sense of perspective and I would vote against both fatal Motions.
Lord Stoneham of Droxford (LD)
My Lords, I am pleased to follow the noble Lord, Lord Kerr, but let me just point out to him that politicians do not want elections when they know they are going to lose, and they like elections when they know they are going to win. The fact behind this decision is that, despite the Conservatives’ regret Motion, most of the councils that are postponing their elections are Conservative-controlled. They know that they had a very good year in 2021—an exceptional year—and that they were going to lose control of most of the councils that had elections this year. Sadly, with Labour in government, it knows that its vote is going to be difficult to get out and it has concerns about how well it is going to do. We know we did quite well and have to accept that.
The top-down model that the Conservatives were talking about—in respect of the reorganisation of local government—is actually pretty much the model they had in government, for what they were going for. Their main motivation is that they would lose against the results in 2021. In my area, there are no elections in Surrey, Sussex and Hampshire. I understand that the Government want their reorganisation, but I think they could have either postponed the consultation a little bit by a month or two, or, indeed, arranged that the elections should be held in June, a month or two later, after the consultation.
I will give you the example of my own patch of Hampshire. We have big financial problems in Hampshire. The Conservative-run county council has a deficit coming up of £183 million next year. It wanted to put council tax up by 15% and asked the Government to put council tax up by that much. A lot of the problems go back to their Government, because they did not provide the money, but that is the reality in Hampshire. We are going to end up, in Hampshire, as a result of having no elections, with a fag-end county council, which I would say is unrepresentative, having to impose pretty severe cuts on services when it knows it probably will not exist in three or four years’ time. Probably, in our patch, we will have no elections until 2027 or 2028, unless the Government promise we will have county elections next year. If we are going to have county elections next year, we might as well have had them this year.
There are three conclusions I draw. One is that it is better to have elections this year than wait for possible elections in 2027 or 2028. I think the Government should declare whether we are going to have elections next year or, if there is a reorganisation, whether we are going to have a further extension of councillors’ remit, so that they will have been in power in the county council for seven or eight years by the time we get around to having elections.
The second thing that is really important is that, for God’s sake, we must sort out the finances of these councils. Southampton is Labour-controlled and Hampshire is Conservative-controlled, and they are frankly in deep, deep trouble. If those problems are handed over to a reorganised Hampshire local government organisation, it will not succeed. That is why we need reform, but we do not benefit that reform by getting a postponement of the elections. Unless the financial situation is sorted, reorganisation in my county of Hampshire will not get off on the right foot. We will have all the local authorities in that area blaming each other for the fact that it is not going well, and trying to push the financial deficits on to each other. It will be a disaster.
Let me just give your Lordships a bit of hope, which I hope, by having elections, we might see. Southampton, Hampshire and Farnborough in the 1930s were the Silicon Valley of the United Kingdom. We had a very successful aviation industry, with the invention of the Spitfire; Farnborough was also a big centre of research and Southampton was one of the main ports to America. The Blitz and the war led to a lot of those industries moving north or to the south. What we need in our county is a well-funded series of unitary authorities and a mayor who will lead us back to that growth that we want and which the Government want.
However, we are not going to do it if we start off with unrepresentative councils as a result of elections being suspended. The county council is hugely unrepresentative now, because it had an exceptionally good year in 2021 and will probably be in power for six or seven years through this period. The county council is going to be leading some of the discussions on reorganisation in Hampshire, and that is the problem. We want to start with representative councils and do not want to postpone the elections.
Lord Fuller (Con)
My Lords, it is a funny thing when the unelected House of Lords has to regret the cancellation of elections. Democracy is the foundation stone on which the fabric of our nation is built. It is not to be carelessly discarded and requires the most careful consideration. I accept that general elections are far more important than most, but local elections are not any less valuable in shaping the local doorstep issues that people value the most in their towns, villages and cities. I am a councillor, and a veteran of many local elections, so I know more than most how they keep councillors on their toes, and refresh and reinvigorate those councils.
I accept that elections have been cancelled before—under the Local Government Act 2000 and in special circumstances such as Covid or foot-and-mouth. Those are truly exceptional circumstances, mostly in cases of national emergency where all elections in all areas are cancelled, but that is not the case here. We are not cancelling elections in an emergency, where Section 87 of the Local Government Act 2000 is engaged. No, this is a case of devolution and local government reorganisation, where, last week, the Minister in the other place could give no assurance that the process would be complete even in this Parliament, by 2029. Time is clearly not of the essence, so what is the rush today?
When the Secretary of State wishes to move the local government deckchairs around the deck, Parliament has determined the process to be followed in bespoke legislation: Section 7 of the Local Government and Public Involvement in Health Act 2007. It lays out in excruciating detail the particular processes, statutory tests and consultation requirements that must be engaged before elections can be cancelled in local government reorganisations. I am grateful to the Library for all the research it has done on this.
The Government say that they are following the precedent set in 2021, when Somerset, Cumbria and Yorkshire were reorganised, but they are wrong, and I will explain why. Back in 2021, the process started in October—fully seven months out from the proposed elections. Back then, all principal authorities and other interested parties were invited to make proposals. Those proposals resulted in the number that came forward, and Members of Parliament and the public were fully engaged. Later that February, the Government expressed a preference in a well-defined timetable and laid orders and cancelled the elections, following the process established by the Labour Government in 2007.
Let us contrast that with this time. This time, the majority of the cohort of principal authorities were excluded from the discussions, as the Minister will know. Only about 30 of the 200 or so principal councils affected by the proposals were engaged before the Secretary of State made her decisions. How does she justify that? Invitations were circulated to those 30 or so councils, mostly the county councils, to endorse the concept of a mayoral devolution, with carrots—nods and winks—to agree that they would cancel their elections. There was no public consultation. Consider for a moment the conflict of interest in asking the councils facing elections whether they would like to cancel those elections without asking the other principal authorities what they thought of the idea, to say nothing of asking the public what they felt. In January, 18 of the councils wrote to say that they would quite like to dispense with those elections in exchange for a connivance on the mayoralty and, oh yes, early LGR.
I am reminded of my noble friend Lord Pickles, who is no longer in his place. He told me, as a young council leader, “If you don’t trust the folks, don’t go into politics”. So in February, when the Secretary of State said that nine of them had got lucky, if that is an appropriate phrase for denying electors their democratic right, it was announced that their elections would be cancelled. You have to feel for the 10 that were suckered into asking for cancellation but got the mayor anyway.
The Government have wilfully conflated two separate, albeit linked, ideas: devolution and the creation of a mayor; and LGR and the abolition of councils. We were told that the population size for the new councils would be at least 500,000, with no upper limit. We now learn from the Minister that the figure is between 350,000 and 500,000, with the possibility that 500,000 may just be the average within a territory. The 30 councils that connived were misled and entered into the process on a false prospectus. They were suckered. Councils and mayoralties are different. You do not speed the creation of one by cancelling elections to the other. That exposes the dishonesty of the Government’s approach and is why we are right to regret their actions.