English Devolution and Community Empowerment Bill

Lord Thurlow Excerpts

Report stage
Monday 13th April 2026 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

My Lords, in this group I will address several government amendments to Parts 4, 5 and 6 of the Bill, starting with government Amendment 312, which makes minor changes to an existing provision in the Local Audit and Accountability Act 2014 to ensure that it aligns with wider reforms to the local audit system. Technical amendments to the audit system at this time of night are guaranteed to be soporific, so I will get through as quickly as I can.

Section 32 of the 2014 Act enables the Secretary of State to make further provisions via accounts and audit regulations. These regulations can, for example, set requirements regarding the form, contents and publication of financial accounts. This amendment updates the list of consultees that a Secretary of State must consult before making or amending accounts and audit regulations. The amendment replaces the Comptroller and Auditor-General with the local audit office, and the addition of the local audit office reflects the fact that it will be central to the new audit system. The Comptroller, meanwhile, will no longer be responsible for the code of audit practice—that will pass to the local audit office.

The amendment also replaces recognised supervisory bodies with any external registration body, and this is in keeping with changes elsewhere in the Bill. The Bill maintains the concept of a register of local audit providers as the basis for the regulation, quality monitoring and oversight of professional conduct. The register will no longer be held by a recognised supervisory body. Instead, the local audit office will have the right to hold a register itself or to designate an external registration body to hold the register and deliver these regulatory functions on its behalf. The amendment would ensure that whichever body holds the register—either the local audit office or an external registration body—is consulted on accounts and audit regulations.

Government Amendments 319 to 324 are essential amendments to expand the scope of Schedules 7A and 7B to the Landlord and Tenant Act 1954 to ensure that tenancy renewal arrangements entered into on or after 17 March 2026, and any subsequent rent reviews during the term of the tenancy, are also within scope of the ban. Arrangements of this type, such as options and rights of first refusal, may require the tenant to enter into a new tenancy on pre-specified terms, which could include upwards-only rent review provisions. Permitting such arrangements could therefore be used by landlords to avoid the ban’s effect and encourage gaming of the system, which we want to prevent.

Government Amendment 325A is an essential technical amendment to ensure that delegated powers across the Bill, which have been inserted into the Local Democracy, Economic Development and Construction Act 2009 and the Levelling-up and Regeneration Act 2023, are consistent with the intended position. This would bring them into alignment with the position described in the Bill’s delegated powers memorandum.

Government Amendment 327 will allow for regulation- or order-making powers within the Bill provisions concerning local scrutiny committees, charges payable by undertakers, executing works in maintainable highways and the licensing of taxis and private hire vehicles to be commenced by commencement regulations at the appropriate time. The amendment achieves this by preventing these powers from commencing upon Royal Assent. I beg to move.

[Lord Thurlow (CB)]

My Lords, I rise to speak to my Amendment 318C. But in what is possibly my final contribution to the proceedings of this House, I want to make a couple of brief valedictory comments. It has been a privilege and an honour to have been elected to this place some 11 or 12 years ago and to take part. I do not say that lightly. I have had so many helpful tips and hints from Members on all sides of the House who have helped me stumble through the protocols. I include the doorkeepers and other officers of this place in my thanks and remarks.

I am disappointed that it should end with expulsion, not choice, but my family has form. I follow a tradition in that the first Thurlow in this place, in the late 18th century, was also expelled. He sat on the Woolsack at the time. I got off lightly.

I turn my attention to the Bill and thank the Minister for the meeting with the team last week. I refer to my interests as a former chartered surveyor who still has some practice in commercial property markets. My comments relate to Part 5 and banning upwards-only rent reviews, which has already been touched on by the Minister. This is a revision of the Landlord and Tenant Act and has no place in this unrelated Bill. It shows all the signs of an afterthought slipped in late in the day.

There was a lack of consultation. The Library briefing in the other place described it as a “surprise”, “not trialled” and “not a manifesto item”. Now before us and still with no proper consultation, it is being inserted into the Bill.

There was an impact study, but it was deeply flawed. I read it and it was very one-sided. There was not a single reference to the loss of capital value to landlords in this clause. Rental value is one of two principal elements of the valuation process for commercial property. Did the Government forget to consider it? Did they not understand how these values are arrived at? They should have consulted.

The clause is designed to help SMEs—small and medium-sized enterprises—and I agree 100% with that sentiment and with that sentiment being applied to banning upwards-only rent reviews. But the Bill treats SMEs in small properties as though they are the equivalent to office blocks in Canary Wharf or the City of London, data centres worth hundreds of millions of pounds, or other large logistics operations. They have nothing in common with SMEs. This is not a one-size-fits-all subject. SMEs need support, but the Bill should focus exclusively on them, not on big business.

There are good reasons for excluding large commercial properties. These days, large office blocks retail at over £1 billion each in these centres, and the buyers are sovereign wealth funds and big international investors. Removing upwards-only rent reviews rocks the stability of our landlord and tenant system and reduces the attraction of the UK versus competing centres abroad, and that, of course, impacts growth.

At the end of 2022, the IPF estimated the total value of the inventory of commercial property here at £900 billion. The property market was estimated at £138 billion by the LSE in 2024. I mention this to underscore the importance of the sector to the wider economy. If the Government really want growth, this clause is a clear act of self-harm. Destabilising the valuation base of the UK commercial property market will reduce inward investment. This clause adds risk.

--- Later in debate ---

Tabled by

[Lord Thurlow]

318C: Schedule 34, page 363, line 26, at end insert—
“2A In this schedule, “business tenancy” and “business tenancy with a rent review” refer only to a business that is a small or medium-sized enterprise, as defined by the section 123 of the Procurement Act 2023.”Member's explanatory statement
This amendment seeks to ensure that the removal of upward only rent reviews will apply only to SMEs, so as to mitigate any potential loss in value for larger commercial properties and to protect investors and lenders against loss in value as a direct result of this Bill.

[Lord Thurlow (CB)]

I would like to thank noble Lords for their contributions on Amendment 318C and particularly for the kind and generous comments from across the House to the noble Lord, Lord Cromwell, and me. I regret too that the surveying and property expertise is becoming depleted by the forthcoming cull and would simply like to remind the Minister that it is not too late to do something about it.

Turning to Amendment 318C, I seriously urge the Minister to reflect on leaving Clause 5 unchanged. It will cause great self-harm and frighten off inward investment and be bad for growth. There would be wisdom in seeking recommendations from the property profession as to how better to exercise this objective of upwards-only rent reviews. Meanwhile, I shall not move my amendment.

Amendment 318C not moved.