Long-term Plan for Housing

Lord Shipley Excerpts

Thursday 11th January 2024 Lords Chamber

[Baroness Penn (Con)]

My Lords, a number of the changes that we are making to the NPPF address some of the noble Baroness’s concerns. They are all about allowing a local area, using the evidence of local need, to produce a plan that works for that area. The noble Baroness touched on the Green Book and how we value social housing but also wider social benefits when we look at value for money in government projects. The Government have done work on reforming the Green Book over a number of years to ensure that we better take that into account. There is also better assessment of national well-being as a factor when we look at policies. We are looking, for example, at valuing our green space more clearly in our policy assessments, so that we can take a more well-rounded look. That is at the heart of my department’s mission. When looking at levelling up across the whole of the United Kingdom, one point that often gets made is that the old ways of doing things incentivises you to invest only in London and the south-east. While that is incredibly important, we know that investing in communities across our country is how we will actually deliver for people, and that is what my department has been created to do.

[Lord Shipley (LD)]

My Lords, the Minister has said that it is not the purpose of this long-term plan for housing to address the need for more homes for social rent. She has also said that the Government are absolutely committed to increasing the supply of affordable and social housing. In the face of the 14% increase in the past year of people in temporary accommodation in our country—a trend which is likely to continue rising—what is the Government’s short to medium-term plan for getting more long-term homes for those being forced to live in temporary accommodation?

[Baroness Penn (Con)]

As I have previously said to noble Lords, we have over £11 billion for the affordable homes programme, but a number of other measures were announced, most recently in the Autumn Statement. For example, the local housing allowance uplift will help with the affordability of the private rented sector, reducing the chances that people might move into temporary accommodation. We also have the Homelessness Reduction Act, which is matched by funding to try to prevent people moving into temporary accommodation altogether. At the Autumn Statement, we also announced additional money for local authorities to increase the supply and quality of their temporary housing to bring down the costs of putting that provision in place so that we can invest in the longer-term solution, which is more affordable housing available to more people.

Leasehold Reform

Lord Shipley Excerpts

Thursday 11th January 2024 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I assure my noble friend that we remain committed to continuing our leasehold and commonhold reforms, and the Bill is a major step forward. The Government remain committed to a widespread take-up of commonhold for flats, and we have been reviewing the Law Commission’s recommendations to reinvigorate commonhold as a workable alternative to leasehold, alongside working with the Commonhold Council to consider practical steps to prepare consumers and the markets.

[Lord Shipley (LD)]

I congratulate the noble Lords, Lord Kennedy and Lord Young, on their persistence in this matter. We took a Question on this on 30 November, replied to by the noble Baroness, Lady Penn, in which she said that

“commonhold provides a potential way forward to move away from leasehold”.—[Official Report, 30/10/2023; col. 1181.]

That we know. She also promised to explain in writing the complications of abolishing leasehold in flats, to which she referred. Can the Minister explain what the delay is in implementing commonhold and what the complications are perceived to be?

Homelessness

Lord Shipley Excerpts

Monday 18th December 2023 Lords Chamber

Asked by

[Lord Shipley]

To ask His Majesty’s Government what is their estimate of the number of people who will be homeless this Christmas; and what plans they have to reduce the number of people who have no home of their own.

[Lord Shipley (LD)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I remind the House that I am a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

My Lords, the latest available statistics are for April to June 2023; data for December 2023 will be available in the spring. We are providing significant investment to tackle homelessness and rough sleeping—more than £2 billion over three years. This includes more than £1 billion to support local authorities to prevent homelessness, with a further £120 million secured at the Autumn Statement for next year to relieve homelessness pressures.

[Lord Shipley (LD)]

I thank the Minister for her reply. She will be aware that at least 300,000 people will spend this Christmas without a home, including 140,000 children, which is a 14% increase in one year. Is the Minister aware that the number of households trapped in temporary accommodation reached a record high last year, yet only 9,500 social rent homes were delivered? What work are the Government doing to increase the supply of social rent homes to reach the 90,000 required each year to end homelessness?

[Baroness Penn (Con)]

My Lords, I acknowledge that those figures are too high. Our focus as a Government has been on preventing people falling into homelessness. That is what a large part of our budget has focused on. The noble Lord is also right that we need to increase forms of affordable housing. We need social rent, yes, but also all forms of affordable housing. That is what we are doing through our affordable housing programme, which is delivering large numbers of additional affordable housing into the system each year.

Levelling Up: North-east England

Lord Shipley Excerpts

Thursday 14th December 2023 Lords Chamber

[Baroness Penn (Con)]

I am very happy to undertake to write to my honourable friend and find out about progress on that. It brings us back to the broader point from the difficult decision not to proceed with the last leg of HS2. That has freed up billions of pounds for investment that will make a difference to more people’s lives, and faster, across the whole north of England.

[Lord Shipley (LD)]

I refer the Minister to the recently published report by PwC, its Green Jobs Barometer, which says that the number of green jobs advertised has fallen sharply in the last year in the north-east, and that London and the south-east continue to dominate the total number of green jobs advertised. If the Government are to narrow the gap through levelling up, what action will they take to promote green jobs in parts of the country outside London and the south-east?

[Baroness Penn (Con)]

The noble Lord is absolutely right that the north-east has huge potential when it comes to green jobs and industries, and that has been a real focus of government investment in the north-east, along with leaders there. We announced the investment zone for the north-east last month. That is all focused on advanced manufacturing, green industries and the creation of jobs there. It is backed by a huge amount of government funding, and we have already seen great results from it. I think we will see an increase in green jobs in the north-east, as well as across the rest of the country.

Residential Leasehold for Flats

Lord Shipley Excerpts

Thursday 30th November 2023 Lords Chamber

[Baroness Penn (Con)]

I am sure that this House will communicate its views to the department as we progress the Bill throughout the scrutiny. It will go through the Commons first and I look forward to debating the provisions in detail when it reaches the Lords.

[Lord Shipley (LD)]

My Lords, commonhold is used widely across the world, so why has it taken the Government so long to consider what works so successfully across the rest of the world?

[Baroness Penn (Con)]

My Lords, this Bill, and the other reforms that we have made in this space, are comprehensive and complex. We have taken time to look, consult and bring forward the proposals that will have the biggest impact on leaseholders today, while also committing to ongoing reform in the future.

Levelling Up: Project Delivery

Lord Shipley Excerpts

Thursday 23rd November 2023 Lords Chamber

[Baroness Penn (Con)]

I thank my noble friend for drawing out some of the positives of that report, as there were indeed some. He is right that, while we are keen to see the delivery impact of this investment as soon as possible, there have been some delays. For example, we have talked about inflationary pressures, so for the levelling-up fund, the prospectus for both rounds 1 and 2 said that we expected all funding provided to be spent by March 2024 and March 2025 respectively. However, those deadlines can be extended by one year on an exceptional basis. Similarly, for the future high streets fund, we have given a six-month extension for the spend deadline, taking it to 30 September next year, giving local places additional time to deliver their transformational projects.

[Lord Shipley (LD)]

My Lords, I remind the House that I am also a vice-president of the Local Government Association. As has been pointed out, one of the reasons for the problems we have is rising cost pressures, both inflation and interest rate levels, and in some cases, of course, withdrawal of contractors. Will the Minister assure the House that, in such circumstances, it cannot just be an “exceptional case”? I quote the phrase that she used in her previous reply. The NAO has shown that there is an average delay of almost 10 months across projects as a whole. That is simply too much, and I ask the Minister to consider very carefully extra money to support the budgets of projects where there is a case and, secondly, for an automatic extension to the length of budgets, otherwise we will carry on having some of the problems that we have seen.

[Baroness Penn (Con)]

My Lords, as I have said, we are keen to see the delivery impact of the investment as soon as possible. That is why we have not moved to an automatic extension to the deadlines involved. However, we have moved to give local authorities more flexibility about how they spend their money without coming back to central government, to enable delivery. We have also put in place both more funding and more support to local authorities in the delivery of their projects, to help them meet their own deadlines.

Levelling-up and Regeneration Bill

Lord Shipley Excerpts

Report stage
Wednesday 13th September 2023 Lords Chamber

Moved by

[Lord Shipley]

247YYE: After Clause 218, insert the following new Clause—
“Second homes for council tax purposesThe Secretary of State may by regulations permit, through a licensing scheme, local authorities to set a limit on the proportion of dwellings which, at the point of sale, become second homes for council tax purposes.”

[Lord Shipley (LD)]

In moving Amendment 247YYE, I will speak also to Amendment 288B; both are in my name and that of my noble friend Lord Foster of Bath and relate to second homes. They would give a power to the Secretary of State by regulation to permit local authorities, through a licensing scheme, to set a limit on the proportion of dwellings which, at the point of sale, become second homes for council tax purposes.

We have heard about deal on Report on the Bill about the housing crisis, not least a crisis in the availability of truly affordable homes. Government data shows that 7,644 social homes were built in England in 2021-22, while 24,932 were sold under right to buy and 2,757 were demolished. The crisis is particularly bad in rural and coastal areas.

In 2019, the Rural Economy Select Committee, chaired by my noble friend Lord Foster of Bath, noted that, in rural areas, house prices—and so, in turn, rents—are higher than in urban areas, while incomes are lower. That disparity is widening. In Cumbria, for example, average house prices are 12 times average household incomes. As a result, it is ever harder for people of working age to live and work in rural and coastal areas, with an inevitable impact on their local economies.

There are three principal causes: too few genuinely affordable homes being built; second homes taking over full-time residential homes; and, the most rapidly increasing problem, short-term lets taking over the long-term private rented sector. In Cumbria, for example, there are currently 232 long-term rental properties available, compared with 8,384 short-term lets.

My noble friend Lord Foster of Bath, who is unable to be here today, lives in Suffolk, close to the popular seaside town of Southwold. With the recent growth in second home ownership and the rapid rise in short-term lets, of the 1,400 properties in Southwold, only 500 have full-time residents, while 500 are second homes and 400 are short-term lets. Two-thirds, therefore, are not permanently lived in.

House prices and long-term rents have risen steeply. Local families are being forced out and those working in the local tourism industry cannot find or afford local accommodation. As a result, many of the bars, restaurants and hotels now have staff vacancies. As a local councillor said recently, soon people will not

“want to visit the soulless toy town where no one lives any more”.

In Committee, my noble friend Lord Foster of Bath and I proposed amendments to address the issues of short-term lets and second homes. In particular, we proposed separate use categories for both. Other noble Lords also addressed these issues, with a range of similar proposals. In response, the Government promised to take action. Indeed, as a result, consultation has been taking place on proposals to introduce a short-term let registration scheme, which would allow councils to apply health and safety regulations across the guest sector.

Consultation has also been taking place on establishing a separate use class, C5, for short-term lets. I welcome these proposals and the intention of using permitted development rights so that areas of the country where short-term lets are not an issue are not impacted. Where they are, a planning application will be required for change of use to a short-term let and councils can decide whether, given local circumstances, it should be approved.

Clause 218 of this Bill provides for the implementation of the registration element of these proposals. These Benches welcome the proposals and hope they will be implemented quickly. However, this completely ignores those second homes not being used as short-term lets. They should be known as “second homes for council tax purposes”. On the latest figures, there are some 257,000 such properties in England; although not as rapidly as short-term lets, the numbers are growing year on year.

I expect that the Minister will point to the way in which neighbourhood plans can be used to address this issue and the new power for councils to further increase council tax on second homes. While undoubtedly welcome, these measures do not give affected local councils sufficient powers to address the problem. Can the Minister explain why the Government, having belatedly agreed to address the short-term lets problem, are failing to do the same for the second home problem?

The two amendments in this group in my name and that of my noble friend Lord Foster of Bath propose a solution. We could have adopted a similar approach to the one the Government have proposed for short-term lets and if, in response, the Minister suggests the Government plan to explore that route, we will be happy to support it. However, following a substantial discussion with local councils and councillors, we propose a new approach: a licensing approach available for those councils which choose to adopt it.

It is a simple approach. By restricting its application to the point of sale, it does not impact existing homes. We recognise that it would require a person seeking to buy a property to be used as a second home—not intended to be a short-term let—to conduct inquiries into the likelihood of a council agreeing to a licence. That is no more onerous than many other pre-purchase searches and no different to that required for a use class order change to short-term let. But it would give much-needed powers to councils which face problems caused by second homes. I hope the Minister is in listening mode on this matter.

Finally, on second homes and council tax, can the Minister explain what steps the Government will take to resolve their failed attempt to close the tax loophole? For some years many of us have been drawing attention to the situation whereby second home owners avoided paying either council tax or business rates. They did this by claiming their property was available for rent—and so eligible for business rates—but then ensured that little rental took place and so the business income fell below the threshold, so no tax was paid.

Last January, so-called tough new measures were introduced for eligibility requirements: making the property available for rent for 140 days a year and proving it had been for at least 70 days. However, as the Daily Telegraph reported earlier this month:

“Holiday let council tax crackdown backfires—costing local authorities millions”.


The tough measures have not prevented more and more second home owners registering as a business and then claiming 100% business rate relief. Two years ago, 73,000 such properties were on the business rates list in England; the figure now stands at over 85,000. Can the Minister tell the House what further steps will be taken to address this problem? I beg to move.

[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.

--- Later in debate ---

In my judgment, it is imperative that we allow time to assess the impact of the actions I have described that the Government have already taken. It is for that reason that we are resisting the amendment. However, I hope I have provided sufficient reassurance that we are already taking action to address the issues raised, and I hope the noble Lord, Lord Shipley, will feel able to withdraw the amendment.

[Lord Shipley (LD)]

My Lords, I thank the Minister for his reply, which was as I anticipated. It is clear that we are going to be returning to this issue again and again while the Government fail to build enough affordable housing for people to live in, particularly in coastal and rural areas under great stress. For the moment, though, I beg leave to withdraw the amendment.

Amendment 247YYE withdrawn.

Levelling-up and Regeneration Bill

Lord Shipley Excerpts

Report stage
Thursday 13th July 2023 Lords Chamber

Moved by

[Lord Shipley]

26: Clause 8, page 8, line 4, leave out paragraph (f)
Member's explanatory statement
This amendment would ensure that the duty to allocate seats to political groups to the executive of a CCA or to a committee of such an executive would continue to reflect the requirement for political balance defined in the Local Government and Housing Act 1989.

[Lord Shipley (LD)]

My Lords, I shall speak also to Amendments 30, 31 and 43 in my name. On Tuesday, I spoke on Amendment 51; I share the concerns expressed on that occasion by the noble Lord, Lord Hunt of Kings Heath. I am a signatory to that amendment, in the name also of the noble Lord, Lord Bach.

I have a particular concern in relation to Amendment 30. I should give the Minister notice that, assuming that the response I get is similar to the one I got in Committee, it is my intention to test the opinion of the House.

On Amendment 26, I expressed concern in Committee that the Local Government and Housing Act 1989 will be disapplied in so far as political balance is concerned on a combined county authority. All this group is about power structures in combined county authorities. Some of the proposals in the Bill are worrying because they will centralise power within a CCA. The disapplication of the Local Government and Housing Act 1989, because it eliminates political balance on a CCA, could lead to dominance by one party in the combined county authority and encourage a further centralisation of power.

I also have a concern about centralisation of power away from CCAs into the Treasury. With Amendment 43—I raised this matter too in Committee—I am concerned that, in terms of the Government’s ambitions for devolution, of which a great deal is claimed, no further devolution of fiscal powers is planned that I can see. For example, in the recent West Midlands deal, there is provision for the collection of local business rates locally for 10 years, but other fiscal powers are missing from that devolution agreement. I therefore have a concern in respect of Amendment 43 as well. I do not plan to test the opinion of the House on it but I hope that the Minister will understand that it is important to have a system for power structures that will stand the test of public scrutiny. I fear that these do not.

The noble Baroness, Lady Taylor of Stevenage, has two amendments in this group. I shall say nothing about those other than these Benches will support her if she decides to seek a vote on either Amendment 28 or Amendment 29.

Amendment 31 raises a fundamental issue of principle that the amendments in the name of the noble Baroness, Lady Taylor, also address: the concept of a non-constituent member of a combined county authority. That is a body, not an individual member; I will come to associate members, which are about individuals, in a moment. It refers, of course, to district councils. My Amendment 31 tries to make it clear that, where a council is the local planning authority, it really ought to be a full member of a CCA. I do not understand why that principle is opposed by the Government. I can hear the objection to what I am saying, which is, “Well then, a county will be dominated by the districts”, but there is a power in the Bill to organise a voting system, weighting it appropriately by population, to solve that problem. As a matter of principle, a district council that is a local planning authority should not be excluded from full membership of a CCA.

I move briefly on to Amendment 30. As I have said, I have a concern about the centralisation of power. There should be a principle, understood and agreed by all parties, that voting members in a CCA should be full members of the CCA and not part-time or temporary members. For that reason, I am in favour of non-constituent councils being full members of a CCA, which I have tried to explain in the context of the local planning authority.

Amendment 30 in my name seeks to prevent one party with majority control of a CCA appointing individuals as associate members then giving them a vote when those individuals are not full members of the CCA. I cannot think of any parallel. I understand why there may be a category of associate member; what I have not understood is why a CCA would have the power to permit an associate member, an individual, to have a vote on an issue. I raised this matter in Committee. The noble Earl, Lord Howe, will forgive me if I quote to the House what he said on that occasion because I got very worried about this. He said:

“For instance, a combined county authority may have provided for an associate member who, for example, may be a local business leader or an expert on a local issue to enable the member’s input on matters on which they have relevant expertise in the CCA’s area”.—[Official Report, 27/2/23; col. 113.]

--- Later in debate ---

[Earl Howe (Con)]

I simply remind the noble Lord, in answer to his first point, that there has to be a public consultation. That is when the views of all interested parties can be taken into account. Retaining the present arrangements, which I guess the noble Lord would like to do, could mean that the expansion of a combined authority—where the evidence shows that would be likely to improve outcomes across the proposed whole new area—could end up being vetoed by one existing constituent council if the combined authority’s local constitution requires unanimous agreement from its members on this matter. That could happen, irrespective of support from the potential new member, the mayor and the great majority of constituent councils.

I hope the noble Lord appreciates why these provisions are framed as they are. I know that he believes there is an underlying malign motive. Again, I emphatically repudiate that idea. The current regime acts as a barrier to the expansion of an existing combined authority, even when there is a clear economic rationale in favour of it. The Bill will make it less difficult for combined authorities to expand into more complete and stronger economic geographies. For that reason, I ask him not to press his amendment when it is reached.

[Lord Shipley (LD)]

My Lords, I am grateful to the Minister for his reply. He has not allayed my concerns about the dangers of greater centralisation of power in a CCA, and I am unconvinced by his argument about local planning authorities. I still think that a district council which is a local planning authority ought to have an absolute right to membership of a CCA. It should not be at the discretion of existing members of a combined authority. We may come to that issue in a moment, but for the time being I beg leave to withdraw Amendment 26.

Amendment 26 withdrawn.

--- Later in debate ---

Moved by

[Lord Shipley]

30: Clause 10, page 9, leave out line 35
Member's explanatory statement
This amendment seeks to ensure that only full members of a CCA would have the right to vote.

[Lord Shipley (LD)]

My Lords, I find myself unconvinced by the Minister’s reply on associate members’ right to vote. I wish to test the opinion of the House.

--- Later in debate ---

Moved by

[Lord Shipley]

32: Schedule 1, page 280, line 33, leave out “at least one member of an audit committee is” and insert “a minimum of three members of an audit committee are”
Member’s explanatory statement
This amendment would help ensure a strong presence of knowledgeable, independent persons on an audit committee thus avoiding too great a dependence on members of constituent councils.

[Lord Shipley (LD)]

My Lords, I have two amendments in this group. It is not my intention to speak at length about them or to test the opinion of the House.

I have a great concern about the role of audit. I do not think that the existence of Oflog is sufficient to address the problems that we have experienced recently around processes in local government being inadequate to prevent excessive expenditure—particularly capital expenditure—which has spiralled out of control. There is a big issue for local authorities and combined authorities to address in terms of their ability to undertake an audit effectively. We are aware that a number of local authorities have not had their audits signed off for some time. There seems to be a capacity problem across local government in terms of the audit function.

All that said, my amendment is not a matter on which I will divide the House. I just hope that Ministers will try to address the issue of capacity in the audit function on audit committees where they exist. There will be audit committees for a CCA. I would like to think that enough expertise will be there to do the job properly. Simply to have at least one member is not enough. I have proposed a minimum of three. This is very important. When councillors are members of an audit committee, they have many demands on their time. What is required is a more professional focus of those who are trained in the area.

The second amendment relates to the ability of an audit committee, where it exists, to publish a report. At the moment, it is required to report to the CCA. I do not know what will happen if the CCA decides that it does not like it or does not want to publish it. Does the CCA have the power to prevent publication? I hope to hear from the Minister that something can be done to reassure me that an audit committee of a CCA can publish a report, even if the CCA does not wish it to do so, where the audit committee believes it to be in the public interest.

These two amendments are as simple as that. I am very happy for the Minister to take the issue away, to see what might happen when some of these statutory instruments start to come through your Lordships’ House. I beg to move Amendment 32.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall be very brief. I want to express our support for the amendments of the noble Lord, Lord Shipley, and to reiterate our concerns around audit and Oflog and how that will operate within its responsibilities. We need to ensure that there is a sufficient set-up to deal with the huge problems facing local authorities regarding audit. We know that some authorities have not had an audit for years, so this is clearly a real problem. We thank the noble Lord for tabling the amendments and hope that the Minister and the department will look carefully at his concerns and constructive suggestions, as we really need to resolve this issue.

[Earl Howe (Con)]

My Lords, Amendments 32 and 33 in the name of the noble Lord, Lord Shipley, seek to increase the transparency of CCAs. Greater functions and funding must come with strong accountability, but that must go hand in hand with decisions being made at the most local level possible. I can deal with this quite briefly and, I hope, to the noble Lord’s satisfaction.

As the Bill is drafted, a CCA’s audit committee can appoint three independent members, should it wish to, but it should be a matter for the CCA to decide exactly how many above one. The regulations that will establish the combined county authorities will set out the audit committee arrangements. They will provide that, where practicable, the membership of the audit committee reflects the political balance of the constituent councils of the combined county authority. Membership may not include any officer from the combined county authority or the combined county authority’s constituent councils. The regulations will provide for audit committees to appoint at least one independent person.

As regards transparency, in addition, Part VA of the Local Government Act 1972 provides powers to require the publication of reports of a committee or sub-committee of a principal council, including audit committees. Schedule 4 to this Bill already includes a consequential amendment to apply Part VA to CCAs.

I hope that that is helpful. The noble Lord has already kindly said that he will not press his amendment, but I hope that what I have said will reassure him.

[Lord Shipley (LD)]

I thank the Minister for his assurances. I think there may be a way forward here—I hope very much that, at the very least, we will have strong guidance. When the statutory instruments come before the House—assuming that they do—I hope they will ensure that the ability to have three members is translated into having three, as opposed to having at least one person. There has recently been developing concern among the public as to what has happened in some local authorities whose audit systems simply do not seem to be strong enough to prevent capital investment going wrong. With that, I beg leave to withdraw the amendment.

Amendment 32 withdrawn.

Levelling-up and Regeneration Bill

Lord Shipley Excerpts

Report stage
Tuesday 11th July 2023 Lords Chamber

[Lord Lansley (Con)]

My Lords, in this group Amendment 2 in my name returns to an issue that we debated in Committee. Noble Lords who were present on that occasion will recall the debate and I will refer to it again in a moment, but I think it is useful to return to it, because it touches upon the broader question of the relationship between the laying of a statement of the levelling-up missions and parliamentary scrutiny of that—or indeed, parliamentary scrutiny of subsequent reports.

We just touched on the timing of all of these. For the benefit of the House, as it happened, I was looking at the timing of the reports and the statements. We are in a position now where we are 17 months on from the Government having published their levelling up White Paper. Technically speaking of course, when this Bill is enacted, the mission periods for the levelling-up missions will restart, since under the Bill as it stands the mission period for the levelling-up missions cannot be dated back to before the enactment of the Bill itself. As far as I can see, we are going to have a new statement of levelling-up missions at that point, and the mission period will clearly run to 2030, since all the levelling-up missions in the White Paper run to 2030. That satisfies the provision that it cannot be less than five years for the mission period.

My amendment relates to what Parliament does when it receives a statement of levelling-up missions. Under the Bill, strictly speaking, it does nothing; it waits until it receives a report. Let us imagine what happens to this Parliament in relation to such a report. The mission period starts two months after enactment—let us say, for the sake of argument, that it will be January 2024. The mission period could be delayed up to a month later under the provisions of Clause 1, so that gets us to February 2024. The 12-month report, therefore, takes us to February 2025, and the report could be received up to 120 days after the end of that 12-month period. So, the first report on levelling-up missions is already certain to take place after this Parliament has been dissolved and is likely not to be received by Parliament until the middle of 2025. That is the first point at which a report is likely to be received.

There is an interesting amendment in this group—Amendment 12, if I recall correctly—which relates to evaluating the levelling-up missions, in relation not only to Ministers’ assessments but to the assessments of the independent advisory council. We discussed the independent advisory council previously; we do not have its view formally on the levelling-up missions and progress. However, as we discussed previously, I think there is some merit in that amendment and that the independent advisory council should provide detail on the report.

The point of my amendment is to say that, when a statement of levelling-up missions is laid before Parliament, Parliament should have an opportunity to debate it if it feels strongly about it. That is not quite what my amendment says. I have adapted a legislative provision which Ministers introduced into the Procurement Bill—which is now in the other place—that, if the national procurement policy statement is the subject of a Motion critical of it within 40 days, Ministers would withdraw that statement. My amendment shortens the time period ever so slightly, the implication being that if Parliament has a problem with a statement of levelling- up missions, the time to do something about it would be when the statement is laid, not to wait what could be 15 months to look at the first report and express reservations about that.

From Ministers’ point of view, my noble friend Lord Howe, in the debate we had in Committee on 20 February—time has passed, has it not?—said that

“it would be extremely unlikely for any government to ignore the view of either House of Parliament if that view had been expressed in the form of a Motion that had been widely supported”.—[Official Report, 20/2/23; col. 1467.]

My difficulty is this: as a former Leader of the House of Commons, I can see that if the Opposition had a problem with a statement of levelling-up missions in the other place, the likelihood is that they would have time within 30 working days to lay a Motion and to debate it. It is not so straightforward here, and there are no formal processes associated with a statement of levelling-up missions. If we were to include my amendment, we would create an expectation that, if such a Motion were tabled, it should be debated within a short period of time.

That is necessary because the statement of levelling-up missions is, of itself, of importance. It is a major statement of government policy. I am assuming that the statement that will be laid, potentially at the end of this year, will be the same as the statement of levelling-up missions published on 2 February 2022. It may not be—there is nothing in the Bill that requires it to be.

My point is that what is in the statement of levelling-up missions is the Government’s responsibility. I am afraid that I do not agree with the other amendments in this group and the next which try to substitute the view of Parliament about what government policy should be for the view of the Government themselves. The statement of levelling-up missions is a central statement about government policy on the reduction of geographic and other disparities across the nation, and it is for government to set out what they are. My principle is very straightforward: government propose; Parliament disposes. By what mechanism will Parliament dispose of the statement of levelling-up missions? At the moment, the implication is that it does not do anything about them; it just waits for a report, which may be some time off in the future.

Amendment 2 is very simple. It says that when the Government publish a statement, Parliament should have an opportunity—not a requirement, but an opportunity—to look at the statement and, if it objects, table a Motion and express its disapproval, which is exactly what my noble friend Lord Howe said. However, we have to create an opportunity for that to happen. If such a Motion were supported by either House, it would be right for Ministers to withdraw the statement and revise it. The amendment does not tell them what to put into their statement; they could carry on with the same statement and try to reintroduce it with the same missions, or they could adapt the missions. However, I do not think it correct that they should proceed without any reference to Parliament or any opportunity for Parliament to express a view about the statement of levelling-up missions.

I hope my amendment is supported. I have sympathy with Amendment 12, on the independent advisory council, but I do not agree with amendments that are trying to substitute the view of this House at this moment for the Government’s view on what the policy on levelling up should be. That is for government to do. On that basis, I beg to move Amendment 2.

[Lord Shipley (LD)]

My Lords, I rise to speak to Amendment 6 in my name, but first, I point out that the noble Lord, Lord Lansley, has raised a number of important issues of process and timing. I look forward to hearing the Minister’s response, because Parliament will have to work around them. The noble Lord pointed out that that it is now 17 months since the White Paper was published and that the way things are, with a general election pending, we are likely to hear more about the levelling-up missions in 2025. As I understood it, he said that it would be useful if Parliament could debate the missions earlier, and he is right.

However, I do not agree with the noble Lord regarding my Amendment 6, on which he poured a little cold water. It is actually about indicators, not missions: it is about how you measure, through missions and metrics, how successful the Government have actually been in delivering on their objectives.

I remind the House as we start Report that I am a vice-president of the Local Government Association. My amendment would define the criteria that should be used to evaluate the success or otherwise of levelling-up policies across all government departments. I emphasise the obvious point that that levelling up is not just for the Department for Levelling Up, Housing and Communities to pursue. Indeed, as the noble and learned Lord, Lord Thomas, said in the previous group, we must tie funding to the levelling-up missions across Whitehall. By implication, that is fundamental, because all departments are supposed to be driving levelling up, so we need to be able to assess how successful they have been in doing that.

My amendment states:

“A statement of levelling-up missions must include an assessment of geographical disparities in the United Kingdom, broken down by local authority and by postcode area and council ward”.


Let me be clear: “postcode area” means the first three or four digits of a postcode, not the second half. Otherwise, I do not see how, if we talk only in terms of regions of England, we ensure that all parts of England are being considered for those outcomes. We have to cover urban, rural and coastal areas—all parts of England. We therefore have to have systems that will produce the evidence we need.

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[Baroness Scott of Bybrook (Con)]

My Lords, Amendment 2, in the name of my noble friend Lord Lansley, would require a Minister to withdraw the statement if either House of Parliament resolves not to approve it. The statements of levelling-up missions, the annual report, the revisions to the missions and revisions to the metrics supporting missions will already be laid before both Houses of Parliament. This already provides numerous opportunities for Parliament to scrutinise the activity of the Government on levelling up. Going further in this way could take up significant parliamentary time and giving a veto to Parliament on a statement of government policy, which is fundamentally different from legislation or guidance, would not in our opinion be appropriate. Of course, as my noble friend said in Committee, Parliament can at any time put a Motion for debate on any issue. That is always possible for both Houses to do.

Amendment 6, in the name of the noble Lord, Lord Shipley, would require the Government to publish an assessment of geographical disparity, with reference to defined criteria, alongside the statement of missions. But as set out in the levelling up White Paper, the missions are already supported by a range of clear metrics to assess different aspects of geographical disparities and measure progress in addressing these. These metrics take account of a wide range of inputs, outputs and outcomes and, in the vast majority of cases, they draw upon publicly available datasets. An additional assessment of geographical disparities risks being duplicative.

Further, as with the missions themselves, specifying reporting metrics in legislation would make reporting far too rigid. While disparities exist at regional, local authority, ward and even street level, the appropriate unit of comparison will vary depending on the mission or policy area. Governments must be able to adapt reporting to reflect changing contexts, without cumbersome revisions to primary legislation. The statement of levelling-up missions is intended as a statement of government policy, which will set out those admissions and metrics, while the annual report will report against those metrics. Having requirements to assess disparities according to specific criteria in the statement would pre-empt that annual report.

Amendment 10, in the name of the noble Lord, Lord Foster of Bath, would require the Government to publish a rural-proofing report alongside the first statement of levelling-up missions. The noble Lord is right to highlight the challenges facing rural communities, as are the noble Lords, Lord Curry of Kirkharle and Lord Carrington, but the annual rural-proofing report is the key tool in highlighting this work. The second of those reports, Delivering for Rural England, is out. It sets out further details on the Government’s approach to levelling up rural areas.

In addition, last month the Government published an action plan detailing their ongoing work and future plans to support rural areas. The noble Lord, Lord Foster of Bath, mentioned that, coming out of that, we are providing £378 million in ring-fenced grants for rural areas, to fund energy-efficiency and clean heating upgrades for low-income households living off the gas grid in England. We also announced a £2.5 million fund to boost the supply of new affordable housing to rent or buy in rural areas, by creating a network of new rural housing enablers. As noble Lords said, we are also supporting community ownership of vital rural assets, such as pubs and shops, through the £150 million community ownership fund. These are areas across government where we are supporting the rural economy and rural England, and this will come out of those rural- proofing issues. I will mention more of this in a minute.

Amendment 12, in the name of the noble Baroness, Lady Hayman of Ullock, seeks the publication of a report by an independent advisory body on progress against the levelling-up missions. Through the provisions we seek to put in statute in the Bill, we are committed to enabling Parliament, the public and experts to scrutinise our progress against our missions and in reducing geographic disparities, and to hold the Government to account. Many think tanks and academics are already scrutinising our performance on levelling up. Through my department’s spatial data unit, we are embracing and seeking to build on this engagement, including through work to improve the way in which government collates and reports on spending and outcomes and considers geographical disparities in its policy-making. That is not just in my department but across government.

As noble Lords will know, we also established the independent Levelling Up Advisory Council, chaired by Andy Haldane. The council, which provides very candid advice to Ministers and conducts independent research for the levelling-up agenda, has met nine times already. I am confident that these provisions and commitments will ensure transparency, scrutiny and accountability on the levelling-up missions, and on the way in which geographical disparities are defined, measured and addressed, without adding any unnecessary proliferation of public bodies.

Amendment 14, in the name of my noble friend Lord Holmes of Richmond, would oblige the Government to publish a report that considers establishing a task force to help increase the effective use of robotics and automation and to consider the impact on regional disparities. The Government are hugely committed to reducing barriers to innovation, which is why we committed almost £200 million in funding to manufacturers through the Made Smarter programme, and we are already convening a Robotics Growth Partnership with leaders across academia and industry. The Levelling Up Advisory Council is considering how to improve the uptake of productivity-enhancing technologies. Given the work that is ongoing already, we do not believe that a task force is necessary. Should government find it desirable to establish a task force in the future, I assure my noble friend that it will not be necessary to legislate to establish one.

Amendment 303, in the name of the noble Lord, Lord Foster, would require a rural-proofing report on how

“the measures contained within the Act will address the needs of rural communities”.

As I highlighted, the Government already have extensive rural-proofing mechanisms which ensure that the unique challenges of rural communities are considered in all our policy-making. The Government undertake robust impact assessment processes when introducing any new policy. The Bill is subject to the same scrutiny and therefore has been assessed accordingly to ensure that all communities, including rural ones, are sufficiently considered. Given the existing mechanisms in place, we do not believe it is necessary to impose a further condition on the provisions of the Bill.

I hope that this provides the necessary reassurance for my noble friend Lord Lansley to withdraw his amendment and for the other amendments to not be moved.

[Lord Shipley (LD)]

Before the Minister sits down, perhaps she might explain a little further about the Levelling Up Advisory Council. I think I heard her say that is has now met nine times. Is the advisory council publishing its papers and the minutes of its meetings? I am led to believe that it has not been doing so. Is that the case and, if so, would it not be better if the papers and minutes of its meetings were published?

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Moved by

[Lord Shipley]

6: Clause 1, page 2, line 3, at end insert—
“(2A) A statement of levelling-up missions must include an assessment of geographical disparities in the United Kingdom, broken down by local authority and by postcode area and council ward.(2B) An assessment of geographical disparities must consider—(a) levels of public spending, both capital and revenue,(b) levels of private sector inward investment,(c) levels of disposable household income, (d) levels of employment, unemployment, and economic inactivity,(e) differences in housing supply and tenure,(f) levels of educational attainment,(g) numbers of young people not in education, employment or training,(h) levels of child poverty,(i) success of government policies in reducing health inequalities,(j) the availability and cost of public transport, and(k) levels of fuel poverty.”Member's explanatory statement
This amendment would define criteria that should be used to evaluate the success or otherwise of levelling up policies across all government departments.

[Lord Shipley (LD)]

My Lords, I listened carefully to the Minister’s reply on my amendment, in which she said that there are clear metrics. I wish to disagree. We learned a moment ago that there is no rural-proofing in the metrics. Indeed, if one takes bus services as an example, the metrics talk about the

“average excess waiting time for frequent (bus) services … the percentage of non-frequent bus services running on time”,

and so on. The metrics actually need to ask: “Is there a bus service at all in my area?” So I do not accept, I am afraid, that the metrics are clear.

My amendment would help to solve the problem of having a standard so that trend analysis can be done on the metrics. If the Government can change metrics, that can make it difficult to achieve sustainable, long-term trend analysis. My amendment would meet that problem; I very much hope that the House agrees. I therefore beg leave to test the opinion of the House.

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[Lord Shipley (LD)]

My Lords, I have learned a lot in the last 10 minutes. I did not know all of that detail.

[Lord Hunt of Kings Heath (Lab)]

There is more.

[Lord Shipley (LD)]

Well, I just hope the Minister might be able to put our minds at rest. The word “gerrymandering” springs to mind. I sincerely hope the Minister can allay any concerns we might have about that. I think the words “sham consultation” were used. I hope the Minister will be able to put our minds at rest on that. It might be helpful if she just said that there was no truth in these rumours at all and that there will not be any overfast consultation on this matter.

That leads me to say that, although I am not a signatory to Amendment 53A, I very much support it. I hope the Minister will be able to explain a little more what the Government’s thinking is on that. However, I am a signatory to Amendment 52. This is all related; there is a serious issue to address. Had I realised that this was going on when I signed Amendment 52, I would have signed Amendment 53A as well.

I have three amendments in this group, Amendments 37 to 39, which would all do the same thing. I will keep this very short because I have no intention of pressing anything to a vote, but I am still surprised that the Government have these clauses in the Bill. I have never understood them. Those of us who have been in combined authorities or have worked in or around them, sometimes with mayors, know that the public have got used to the title “mayor”. I want to eliminate these clauses because the titles that the Government propose as options are confusing to the general public. The reason given comes at line 25 of page 35 of the Bill, which says that the CCA can consider having a title that it feels is more appropriate than other titles that are offered as options,

“having regard to the title of other public office holders in the area of the CCA”.

I recall the Minister explaining in Committee that that was because there were other public officeholders called “mayor”: the mayor of a county, or a lord mayor. Those areas that have been working with the mayoral model for a combined authority for some time have got used to it.

I find the alternative titles offered in Clause 40 confusing. The mayor could become a “county commissioner”, which is used in other countries but is not part of British constitutional thinking. They could be a “county governor”. Of course, if these are combined counties, presumably they would be the governor of two counties. Equally, you could have a “governor” without their being a “county governor”. I find this very confusing.

[Lord Hunt of Kings Heath (Lab)]

My Lords, perhaps Mr Street could be called the Governor-General?

[Lord Shipley (LD)]

Governor-General of the West Midlands—there, my Lords, is a thought. We are now starting to laugh, and I think there is a danger here that the general public will just not understand what all these titles are for. I would immediately say a school governor, a prison governor or the governor of a US state. We can think of various possibilities, but a governor of a combined county? I really do not think that fits with the structure of local and subregional government that we are talking about.

Under Clause 40(2)(c) the title could be “elected leader”. This is very strange, because councils have leaders and those leaders are elected—so I am not clear what the difference is between the “elected leader” of a CCA and the leader of a council. The constituency may be different: that is, it is the whole electorate for the mayor, but for the leader it is the councillors of that council who have to vote to elect that person as the leader of the council as well as leader of the group. This is getting too confusing.

The next thing could well be that if a mayoral CCA is entitled to call its mayor something else, can other combined authorities that have been in existence for a number of years change the title of their mayor? I just do not know why we are going down this road at all. I just say all that to the Minister. There may be something that I have not thought of that she can alleviate my concerns with, but I just wish that this clause and the associated clauses would just go away. It is not something that I want a vote on; I just hope that I will not have to stand up when the statutory instrument comes through for the creation of a CCA and ask why it is that the name has altered to something like a “county commissioner”, which the general public do not comprehend.

[Baroness Scott of Bybrook (Con)]

My Lords, Amendments 25, 27, 35 and 53, tabled by the noble Baroness, Lady Hayman of Ullock, regard the boundaries and memberships of CCAs and combined authorities. The Bill includes our intended criteria for establishing and changing boundaries of CCAs and CAs in Clauses 44, 46, 62 and 63.

Proposals to change the area of a combined county area are generated locally in line with our principle of locally led devolution. The process to propose a boundary change must include a public consultation being undertaken. The Secretary of State has to assess any such proposals, including the results of the consultation, against a set of statutory tests and will consent to making the requisite secondary legislation only if they are content that the statutory tests are met. The legislation is therefore subject to a triple lock of agreement from the Secretary of State, the consent of the local area and parliamentary approval. I think it is important that we look at that as a triple lock.

Any proposal from the local area has to demonstrate that it will improve the economic, social and environmental well-being of some or all of the people who live and work in the area, suitably reflecting their identities and the interests of local communities, and will deliver effective and convenient local government. As such, the expansion of a CCA or CA cannot be pursued for political advantage. It must benefit the local area.

Non-Domestic Rating Bill

Lord Shipley Excerpts

Committee stage
Monday 3rd July 2023 Grand Committee

[Lord Thurlow (CB)]

I take a slightly different position. I support these amendments, but I want to introduce a brief note of caution. The case for a reduction in the frequency of updating rateable values has been extremely well made, but I think experts should have a voice in the proposal. I think we should wait until the three-year review process has bedded in and all interested parties should then be free to comment, before reducing that interval further from three to two years, or even one year. Clearly, the VOA has a central role—the most important role—but ordinary ratepayers have a role too. It is possible that an annual or biannual revaluation will become unworkable. That is unlikely with digitisation and the wider use of technology, but any period longer than one year between revaluations is, by definition, quickly out of date. We saw that in high relief with volatile rental markets during and following Covid.

My amendment suggests that the Government listen to the view of the VOA, of course, but also to the RICS, the Rating Surveyors’ Association and the Institute of Revenues Rating and Valuation, together with other accredited advisory groups, before making a decision on these further reductions. I ask the Government to write into the Bill that they will listen to the voices of these experts before further reductions are agreed to.

[Lord Shipley (LD)]

My name appears on three of the amendments in this group. I think that the case made by the noble Lord, Lord Thurlow, is very strong. We have to be certain. I believe a reduction from three years to two years—and, in an ideal world, to one year—would be the right thing to do.

I should state for the Committee stage, however long that lasts, that I am a vice-president of the Local Government Association.

I am convinced that currently revaluations are too infrequent. The Government have accepted that case. We are going to three years, and that is indeed better, but to reduce appeals and to ensure a fairer system requires two years or fewer. Like my noble friend Lady Pinnock, I will be very interested to know why we cannot draw on the comparator of the Netherlands since it does a revaluation every year.

There are clearly advantages to more frequent revaluations. We will have fewer appeals because the valuation would be more accurate. It would be fairer to businesses and reduce complaints about the system. I read very carefully the letter the Minister wrote after Second Reading, but it is not clear to me that there are any administrative barriers to moving from three years to two years.

We support Amendments 8 and 10, which suggest that the Government introduce a change to two-year revaluation or to one-year revaluation by order, as long as the affirmative procedure is used. As I said a moment ago, I think the points made by the noble Lord, Lord Thurlow, matter. I hope the Government will pay particular attention to Amendment 12 because it would enable us to be certain that it would not be a mistake to move to two years. We are sufficiently open to say that we want to go to two years and would like to go to one year, but we are very happy to build in a timescale which enables that to happen securely.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Pinnock, for introducing this group with Amendment 7, which seeks to change the Bill so that lists must be produced every two years instead of three. Today’s discussion has demonstrated that noble Lords think that this needs to be revisited and that perhaps three years is too long.

I am quite interested in Amendment 9 in the name of the noble Earl, Lord Lytton, which would allow SIs to be introduced to change it to one or two years. Bringing in flexibility to adopt a shorter cycle without that kind of prescription is a really interesting idea and approach. In principle, we would support that; my only concern is that the SI procedure has not exactly gone entirely smoothly in recent years. To get our full support to move in that direction, we would need to ensure that SIs are managed better than they have been recently.

The noble Baroness, Lady Pinnock, made some important points about the need for business confidence regarding valuations. That is incredibly important, particularly given the uncertainty resulting from inflation, various costs—of energy, for example—going through the roof, the challenges following the pandemic, the business rate holidays that have moved or not moved, and the differences resulting from where in the country you may be. None of that helps with certainty for businesses, particularly those that have retail in different parts of the country.

Another really good point was made about the fact that a small but perfect group is taking part in these discussions. Here we have noble Lords with real and practical experience and knowledge, which I hope will be helpful as we move through Committee.

The Chartered Institute of Taxation has agreed that moving initially to three-year revaluations would provide a balance between the administrative costs and the need for regular revaluation to reflect the economic conditions of business. But it also said that, given the rapidity of changes in business and shopping practices, the Government should consider a phased approach to achieving more frequent revaluations, and that this should remain under evaluation. Given the different amendments we have today and the discussions that we have had, will the Minister consider taking back to her department the introduction of a phased approach? I know that in the letter to noble Lords following Second Reading, she said that the Government will

“carefully consider the case for even greater frequency of revaluations once the new system changes have bedded in”.

That brings us to the point made by the noble Lord, Lord Thurlow, who suggested that waiting for that three-year cycle to bed in might be very helpful. He made the point that we need to listen to the experts and advisory groups and make sure that we get this right, because anything over two years goes out of date very quickly. The Labour Party position is that we should have more frequent valuations. We have talked about them being annual, but of course this has to be right, and it has to work for business.

Finally, on Amendment 14, tabled by the noble Earl, Lord Lytton, on the abolition of downward caps, it is concerning that the downward caps can prevent savings being passed on to businesses and could mean that they unnecessarily pay more in business rates. It is an important amendment, and I would be interested to hear what reassurances the Minister can give the noble Earl.

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[Lord Shipley (LD)]

My Lords, my name is on Amendments 28, 33 and 34 in this group. I will come to the accreditation of rating advisers in a moment.

There are a range of issues here which relate to the performance of the Valuation Office Agency. I agree entirely with all that the noble Earl, Lord Lytton, has said about the amendment to which his name is attached and with Amendment 15 in the name of the noble Lord, Lord Thurlow, which is about the proposed requirement on the Valuation Office Agency to reveal rental comparables and the evidence used in arriving at a rateable value. A lot of these issues meet the test of reasonable common sense. If I were challenging a business rates bill or valuation, I would want to be certain that it was at the correct level.

The amendments in my name relate to annual reporting and, jointly with the noble Baroness, Lady Hayman of Ullock, to whether the Valuation Office Agency has a problem with its resourcing. We need to be clear whether it has a problem and cannot do things because it does not have the resources. However, the principle that this group of amendments tries to establish is that the Valuation Office Agency should meet the same performance standards that it requires of business rate payers. It should have a duty to provide information requested, in particular comparable evidence on valuations, as I said earlier. That comment relates to Amendments 15 and 16.

It is very important that the burden of the regulatory requirements on business rate payers is re-examined to make sure that all that business rate payers are now being asked to do is valid. It is said that all the proposed increases in workload are required because of the reduction of the valuation time period from five years to three. I am unconvinced by that and I hope that the Minister might be able to explain why that statement applies. Maybe, as I said a moment ago, it relates to resources. However, the Valuation Office Agency should meet the same performance standards that it requires of business rate payers. That is a very important principle.

My Amendment 34 relates to the Secretary of State being required to consult on the benefits and practicability of a system of accreditation for rating advisers. It seeks to explore an avenue for combating the rogue and unprofessional practices of some rating advisers. It is a simple issue. The new duty to notify will give rise to demand for professional help among business rate payers and, therefore, a serious risk of there being a rise in unqualified advisers offering services, so I conclude that there should be a licensing or accreditation system. At the very least, the Government should consult on that.

The context is simple: there is to be more work for business rate payers, the system is more complex, more will seek professional help and, when they do so, they will expect expert advice. If they do not get expert advice and mistakes are made which perhaps cost the business rate payer a substantial sum as a consequence, whose fault will that be? Of course, the immediate fault will not lie with the Government or the Valuation Office Agency, but behind that failure will be the fact that the Government could have done something to ensure that those who are giving advice are competent to do so.

This is simply a proposal that the Government set up a consultation for a system of accreditation. I hope that the Minister will take it seriously; it is a big issue. The changes in the Bill are welcome in so many ways but, as the noble Earl, Lord Lytton, said a moment ago, there is a danger of unintended consequences, which will cause some to feel that they have not been properly attended to. Setting up a consultation on the issue of accreditation of advisers seems an appropriate measure that the Government could take.

[Baroness Hayman of Ullock (Lab)]

My Lords, as we have just heard, I have Amendment 28 in this group. I thank the noble Lord, Lord Shipley, for his support for my amendment. We tabled this because we are concerned that the VOA may not be sufficiently resourced, particularly as the Bill gives the agency additional responsibilities. The noble Lord, Lord Shipley, has clearly expressed many of the concerns behind the amendment.

I looked at some recent data about the number of staff employed by the agency. The latest figures that I could find showed that it has a full-time equivalent of 3,698 staff, which is not huge, to be honest, particularly as a large number of new responsibilities is being brought its way. The global property consultancy, Colliers International, has described the Government’s plan to reduce the number of VOA offices from 56 to 26 as “a shambles”, and said that it will be a

“nightmare for businesses wanting to appeal their business rates”.

That is another reason why I was concerned enough to table this amendment.

We also know that there have been problems with the VOA managing the number of appeals and the time taken for resolution. I very much support what the noble Lord, Lord Thurlow, said in his excellent introduction to this debate, about the importance of transparency. He also talked about the number of challenges—30%—resulting in reduction. Clearly, that is too high and needs to be addressed—and the VOA needs sufficient resources to be able to do so.

We also know that, often, the number of challenges and the time taken for resolution relate to the number of rogue agents, many of which want to make a fast buck out of this. That is why we support Amendment 34 in the name of the noble Lord, Lord Shipley, which looks to address this. Again, we had discussions about it at Second Reading. We support his amendment and that of the noble Baroness, Lady Pinnock, in this group. In the letter that the Minister sent to noble Lords after Second Reading, she acknowledged that rogue agents need to be looked at and that this would be part of a government consultation. I hope that the Government will take this seriously enough to consider action on this following the consultation, because it seems genuinely to be a problem.

We very much support what Amendments 15 and 17, in the name of the noble Lord, Lord Thurlow, are trying to do to increase transparency in the revaluation process. We hope that that transparency would also reduce the number of appeals, as the noble Lord so eloquently said. Amendment 16, tabled by the noble Earl, Lord Lytton, would also increase transparency, and we would be happy to support it. Clearly, increasing transparency is important, but we have to be careful that amendments we put down on transparency do not have the unintended consequence of adding to the valuation office’s workload without it having sufficient resources—this comes back full circle to what I said at the beginning.

There is also the risk of a major bottleneck in the system, through the new online portal. It would be good to have reassurances from the Minister about how that will be resourced and managed. It is human nature that a large proportion of ratepayers will put in requests for their rental evidence soon after the 1 April date, when the new rating system is published. It would be helpful if the Minister could give assurances that the VOA will be able to respond in time to allow ratepayers and their agents to construct and submit challenges by 30 September—the six-month deadline—because that six-month window for a challenge is a fundamental change to the rating system. We need greater clarity and certainty about exactly how that window will operate, particularly in relation to new tenants and the changes in the list that occur during and after the six-month window. Where is that flexibility?

The Bill states that a ratepayer must provide “annual confirmation” that they have, first, provided “all notifiable information required” or, secondly, that they are “not required to provide” any such notifiable information. Is this confirmation likely to be digital, to fit in with the online system? Will accessible formats be reduced, and will any mitigating circumstances be considered, if a person is unable to complete that confirmation?

As the noble Earl, Lord Lytton, described it, his Amendments 18 to 20 remove the requirements for the annual return. He talked about duplication and unnecessary returns, and it would be helpful if the Minister could provide clarification on that, because a number of changes to how this is done are coming in, and it is important that it works smoothly from the start.

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I assume that it is not the Government’s intention that this should be the effect of the Bill, but that is what will happen as it is currently drafted, based on the expert and legal advice I have received. It will have significant—and, I hope, unintended—consequences for a fundamental aspect of the law of rating. It needs to be rethought. With apologies for a lengthy technical explanation, I will listen with care to the Minister’s response and her reasoned justification. I beg to move.

[Lord Shipley (LD)]

My Lords, I think the wise course of action now would be to listen to what the Minister has to say. I am very supportive of what the noble Earl, Lord Lytton, has said. He called this amendment a stalking horse; we clearly need a definition of the Government’s intention and there is clearly a legal question that must be sorted out. I said at Second Reading that I had concerns about material change of circumstances being altered in the way the Government are proposing, not least to exclude legislation such as licensing laws and guidance from public bodies. As a layman, in legal terms, in this area, it seems to me that legislation can cause a material change in circumstance, particularly if licensing or planning laws are altered. There is a case for that to be considered. These Benches would very much like to hear the Minister’s justification for what is being proposed. If that requires a letter to explain the legal issues involved, that would be helpful. The noble Earl has raised a set of very important questions.

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[The Earl of Lytton (CB)]

My Lords, I support the amendments in this group. At one of my meetings with the Minister and her Bill team I was told that it was not HMRC—or they may have said Treasury—practice to produce an impact assessment as such, and I was directed to a series of notes in lieu. But business rates have an impact on business, employment, entrepreneurial activity and the health of our high streets, and have long seemed a substantial tipping point in decisions about taking on premises, where the tax levied is 50% of the determined market rental value. That puts into shade the collective cost of things such as insurance service charges and other occupational outgoings.

There is a basic imbalance here; I have said so on many occasions in the House and elsewhere. Upfront impact assessments and post-legislative review are exactly what is missing here. I agree with the noble Baroness, Lady Pinnock, that small business relief and small business exemptions are almost an admission of the failure of the system we have.

Turning to Amendment 36, tabled by the noble Lord, Lord Thurlow, I totally agree with its underlying principle that the tax base for local government finance needs to be broadened, with proportionately less of a burden falling on what we might call the traditional business rate payer. This is becoming an impediment. What are termed fundamental reviews have been a great deal less fundamental than they ought to have been. The system has been creaking for some time and one should take notice when things start to creak; it usually means that something is wrong. I very much relate to these amendments, and I look forward to the Minister’s comments.

[Lord Shipley (LD)]

My Lords, my name appears on two of the amendments in this group. Underlying the whole group is a major issue: the Treasury now sees business rates as a source of general income to government, but many small businesses see them as a contribution to local services. That has got out of balance.

I strongly support Amendment 36, in the name of the noble Lord, Lord Thurlow, who has just spoken. He talked about the impact of online shopping on small high street outlets and said that there was a public interest case to be made. Indeed, Amendment 29, moved by the noble Baroness, Lady Hayman of Ullock, probes the possibility of reducing the threshold for small business rate relief on high streets. A number of us raised that issue at Second Reading.

A number of issues are raised in this group. I have an amendment on the hospitality sector. It is not clear to me what reason there would be for not having a hospitality sector review, as I propose. It is about assessing the consistency of approach; we have spoken a lot about high streets, but this applies to the hospitality sector as well. There needs to be an assessment of whether there is a consistent approach for setting non-domestic rateable values between hospitality businesses occupying premises of similar size and trading style. I cite public houses, restaurants, live performance theatres and exhibition spaces as examples. This is the kind of thing that government should be doing anyway, but there is a huge policy issue now around what business rates are for and how we make sure that they are being fairly charged.

[Baroness Scott of Bybrook (Con)]

My Lords, group 6 covers several amendments probing the Government’s support for high street businesses and the wider impact of the Bill. I am grateful for the useful discussions that I have had with noble Lords on what are, undoubtedly, significant issues.

Amendments 30 and 31, from the noble Baroness, Lady Pinnock, and the noble Lord, Lord Shipley, seek a review of the effect of business rates on the retail and hospitality sectors. I recognise that the conditions for businesses in town centres and high streets are concerning for many noble Lords. The Government take these concerns seriously and recognise the impact that increased competition from online businesses, changing consumer behaviour and Covid-19 has had on the fortunes of some high street businesses.

That is why the Government have taken decisive action to ensure that business rates are manageable for ratepayers on the high street. First, 720,000 properties, including many smaller retailers, pay no rates as a result of small business rates relief. Additional support has also been provided for those that do have rates bills: at the Autumn Statement, the Chancellor announced a package of business rates measures worth £13.6 billion. This included a general freeze of the multipliers for all properties, as well as increased support—from 50% to 75% relief—for retail, hospitality and leisure properties, which is worth over £2.1 billion. As we heard, the Government also scrapped downward caps and, as we move to more frequent revaluations through the Bill, we will see a business rates system that better reflects real market values, which was the leading ask of businesses in our review.

I understand that the noble Earl, Lord Lytton, and the noble and learned Lord, Lord Etherton, tabled Amendment 26 to encourage the Government to more actively intervene in how different types of property used in the retail sector are valued. Valuation is, of course, conducted independently by the VOA. All properties subject to business rates are assessed to the same standard of rateable value, which is, broadly speaking, the annual rental value. Properties are valued by reference to the evidence on the level of rents, which is agreed by landlords and tenants for that specific property class. If, at the most recent revaluation, the evidence shows that those open market rental values have increased, rateable values will change with them. Nevertheless, in all cases, the method must result in the common standard of rateable values.

In our review of business rates, the Government sought views on many different ways in which the valuation system could be changed. However, there was strong majority support for retaining the existing basis of rateable value. Therefore, we do not support significant changes to the industry-recognised valuation methodology, as was suggested.