Levelling-up and Regeneration Bill

Lord Etherton Excerpts

Committee stage
Monday 20th March 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, my Amendment 168B seeks to ensure that, in the case of a district council for which there is a county council, all the income from the supplements under Section 11B or new Section 11C of the Local Government Finance Act 1992 would be retained by the district council as it is the housing authority. The amendment allows the district council also to decide to allocate some of the supplement to any of its major precepting authorities if it decides to do so. I will not go into much detail about this amendment; I think what it is trying to achieve is pretty self-explanatory.

Previous days in Committee have included a lot of discussion about the important role that district councils play in delivering services to our communities. Noble Lords have talked about the fact that, in many parts of the Bill, they feel that district councils are being shut out. They will not have access to the same opportunities within the proposed combined county authorities, and they are not then going to get the support they need to continue to deliver services, including housing and planning. We believe that if the district council is the housing authority, it should be able to keep all the income from these sections of the Local Government Finance Act. It should also be in the district council’s gift to decide how that income should be used. In the previous debate, the noble Earl, Lord Lytton, and the noble Lord, Lord Foster of Bath, talked about local authorities being able to decide how funds are spent in other areas. Again, we absolutely agree that this is important.

My Amendment 169 would give the owner of a dilapidated property up to a year after acquiring the property to refurbish it before additional council tax rates are incurred. We touched in the previous group on dilapidated properties but, I suggest, from a different perspective. This is an issue that came to me when I was a Member of Parliament in the other place. Constituents would come to me because they were having financial difficulties in being able to update a dilapidated property, which sometimes they had inherited, because of the amount of council tax they were being clobbered with—to be blunt—which made it much more difficult for them to have the funds they needed to do up the property in good time. It was taking them a long time to do it up.

We know that bringing old, dilapidated buildings back into use will benefit the whole community. However, as I said, it can take a long time, depending on what is needed—for example, if there are problems with damp or you need a new roof. It can take a long time for properties to be restored to a good condition. My Amendment 169 recognises that there can be circumstances in which houses will not be occupied while work needs to be carried out. It is also designed to encourage people to bring homes back to a decent standard without being hampered by having to pay higher council tax rates, which, as I said, can impact on people being able to pay the costs of refurbishment.

The other amendments in this group, Amendment 428 in the name of the noble Baroness, Lady Pinnock—I look forward to her introduction of the proposed new clause—and Amendment 474 in the name of the noble and learned Lord, Lord Etherton, look at the business rates system. Amendment 428 proposes to review it, and Amendment 474 proposes to review it and include consultation to look at how we can bring economic support to businesses, especially in high streets and town centres.

This issue is incredibly important. We know that business rates have had a very negative impact on many of our high streets and town centres, and I am sure we will debate that when we come to the group on high streets later in Committee. Noble Lords know that I feel very strongly that good public consultation and participation for communities is important when we are looking at these kinds of issues. We know that business rates are one of the most important taxes for local government, but they have also been blamed for the struggles of retailers, for the death of the high street and for exacerbating the country’s economic divides.

I suggest that there are three fundamental problems with business rates, which I ask the Minister to take away for further thought and discussion. First, they do not always reflect local economic realities. That became extremely clear during the pandemic, when many businesses struggled to keep going. Secondly, business rates can be far too complex; we do not need them to be that complicated. Thirdly, at the moment they actually disincentivise investment, which is crazy—they should be doing exactly the opposite.

We support these amendments, as we believe that we need a reformed system which will support towns and cities in improving their business environments, raise productivity and boost prosperity.

[Lord Etherton (CB)]

My Lords, I will speak to Amendment 474. I am grateful to the noble Baroness, Lady Pinnock, for allowing me to speak first. We both have the same objective in mind: that there should be a review of non-domestic business rates. The main differences between us are twofold: first, the noble Baroness’s amendment is slightly more prescriptive than mine; secondly, and more importantly, my amendment would provide for a public consultation. Those are the only two differences, really; there is nothing much more than that.

I should declare my interest as the owner of high street investment retail properties, and I am grateful for the support of noble Lords across the House who have signed my amendment. The objective of my amendment is stated in its proposed new clause: to make business rates

“fairer to businesses and to sustain economic activity and growth, especially in high streets and town centres.”

The Bill is an entirely appropriate vehicle for such a provision, since one if its major concerns is that there are empty high street retail properties and failed retail businesses both on the high street and in town centres.

I acknowledge the steps taken in the Autumn Statement to ease some of the economic burden of business rates but, if we want flourishing high streets, we need to look at the system as a whole and not rely on ad hoc changes. Those who invest in retail properties, whether they run small businesses there or otherwise, will want to know what their liabilities are—not what might happen in future—either to raise or reduce business rates or to introduce new ones. This is the one outgoing that is not negotiable. You can negotiate your employees’ wages; you can negotiate the rent; you can go to one of a number of power and energy suppliers; however, you cannot negotiate the rates.

The Government said by way of a manifesto commitment that they would reduce the overall burden of business rates. In fact, the Office for Budget Responsibility reported last year that the Government are

“forecasting that income from business rates will rise to nearly £36bn by 2027/28 (from £28.5bn in 2022/23)”—

a very significant increase that is quite contrary to that manifesto commitment.

There are numerous reasons why it is appropriate to have a review of—and, I would say, a public consultation on—non-domestic rates. Let me mention a few. The uniform business rate multiplier, which is used to calculate rate bills, is running much higher than its historical level, which was 34p; currently, it is 51p or 49.9p for small businesses. Consideration also needs to be given to the empty property rates relief; there is a question as to whether the six-month empty property rates holiday should be extended from the warehouse and industrial sectors to include retail and offices.

Then, there is the question of how often revaluations should take place for the purpose of fixing the level of rates, the suggestion being that it should be yearly. Another question is what is or is not rateable in relation to plant machinery. Finally—these are only a few of the considerations that need to be addressed—there is the question of the appeals system, which is too lengthy, not transparent and not accessible. Those are reasons why it seems essential to me that, if we are to have full and flourishing businesses and retail properties on the high street, we need to look at this one non-negotiable expense, which is running at an historical high, notwithstanding, as I said, the ad hoc reliefs granted in the Autumn Statement.

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

I think I explained to the noble Baroness that we went out for extensive review—the issue is that we and local services need business rates—and there was no consensus on how they might be changed and made different, such that a similar amount of money would be coming in so that local areas could provide services. We tried but came to no consensus.

[Lord Etherton (CB)]

The Minister referred to, and I think the Government are relying upon, a 2021 review. What was the public’s involvement in that review?

Levelling-up and Regeneration Bill

Lord Etherton Excerpts

Committee stage
Thursday 18th May 2023 Lords Chamber

I hope that the Minister agrees that this is an opportunity to ensure that the new IL regime has a strong, positive impact in securing more, and definitely not less, urgently needed social housing. I commend these important amendments.

[Lord Etherton (CB)]

My Lords, I will speak to my Amendments 332, 333 and 341. I am extremely grateful to the noble Lord, Lord Thurlow, for co-signing them. I entirely agree with much that the noble Lord, Lord Best, said. A whole variety of the amendments in this group are aimed at the same principle: how best to increase decent and affordable housing, particularly social rented housing, for those who so badly need it.

Amendments 332 and 333 concern the setting of infrastructure levy rates under new Section 204G of the Planning Act 2008, to be inserted by Schedule 11 to the Bill. Currently under that provision the only requirement in setting the infrastructure levy rates is to have regard to the desirability of ensuring that the level of affordable housing funded and the level of funding provided by developers is not less than before. That is simply not good enough.

As we all know, there is a critical shortage of affordable social housing. The Minister acknowledged this, most recently when answering a Question in the House on 25 April concerning the National Housing Federation’s report, Overcrowding in England, published on 19 April, particularly its finding that one in six children lives in overcrowded conditions. Shelter has reported that over 1 million households are waiting for social homes, and that last year 29,000 social homes were sold or demolished and fewer than 7,000 were built. It also says that there are now 1.4 million fewer households in England in social housing than there were in 1980. These are shocking facts and statistics.

Amendment 332 provides, as noble Lords will see from the Marshalled List:

“A charging authority must prepare and publish a Strategic Housing and Market Assessment specifying what affordable housing is needed within the area of the charging authority … The charging authority must publish a new Strategic Housing and Market Assessment every three years”.


Amendment 333 provides:

“A charging authority must set rates of IL at a level which, in conjunction with the exercise of such other powers as it possesses, is likely to provide not less than the amount of affordable housing specified in its Strategic Housing and Market Assessment over a three year period”.


The Bill would then continue as it currently does, ensuring that there is no lesser level of funding than before. I have specified a period of three years but would be very happy to discuss with the Minister and others whether that would be appropriate.

It would then be necessary to amend new Section 204N, which requires the charging authority to apply the infrastructure levy in funding

“the provision, improvement, replacement, operation or maintenance of infrastructure”,

which is a term defined to include a wide variety of things, from schools and medical facilities to open spaces and the mitigation of climate change. Those are all very worthy causes, but affordable housing is only seventh out of the 10 matters in the definition of “infrastructure”. There is no provision for prioritising one type of infrastructure over another, while the greatest need is plainly for decent and affordable social housing. To have the right and ability to live in a decent home is one of the most basic human rights. Giving priority to the need for affordable housing—more particularly, affordable social housing—is the purpose of Amendment 341, which would introduce into new Section 204N a cross-reference to new Section 204G as we propose that section should be amended.

[Lord Thurlow (CB)]

My Lords, I add my voice to Amendments 332, 333 and 341 from the noble and learned Lord, Lord Etherton, concerning affordable housing, which lies at the root of the Government’s responsibility to their citizens. As we have just heard, it is the duty of government to provide safety and security to its citizens and a roof over their heads. That responsibility includes, at the very top of the list, the needs of the homeless. It is important to remind ourselves that the definition of homeless here includes many of the most vulnerable in our population. They are citizens too, but current circumstances may cause them to question that.

Successive Governments have repeatedly failed to replace council houses sold into the private sector, and this reducing inventory of low-cost housing, however defined, continues against a background of increasing homelessness and need. The Government must somehow finance more affordable housing. These amendments, taken together, will assist in that objective.

Levelling-up and Regeneration Bill

Lord Etherton Excerpts

Committee stage
Monday 22nd May 2023 Lords Chamber

I am aware that the noble Earl, Lord Lytton, and the noble and learned Lord, Lord Etherton, have amendments in this group, and I am very interested to hear what they have to say. I think I have probably spoken for long enough, so I beg to move.

[Lord Etherton (CB)]

My Lords, I draw attention to my amendment, co-signed by the noble Lord, Lord Thurlow—and I am very grateful to him for doing so. The amendment is to Clause 178(4).

Clause 178 is dealing with the vacancy condition, which is one of the conditions for permitting letting or rental auctions by local authorities. My question is probing, to do with certainty. Clause 178 (4) mentions

“Occupation by … a trespasser, or … a person living in premises that are not designed or adapted for residential use”,


but goes on to say that

“this is not to count for the purposes of this section”.

Since the section deals with both what is occupied and what is not to count as occupation, it is unclear what that means. I ask the Minister to make it clear.

I think the intention must be that where a trespasser is in occupation or there is

“a person living in premises that are not designed or adapted for residential use”,

the premises are not to be treated as unoccupied for the purposes of Clause 178(1). That is my understanding. If that is incorrect and it is intended that they should be treated as unoccupied, the amendment provides that if a landlord has taken possession proceedings, they are not to be treated as unoccupied. It is really a question of clarity as to what Clause 178(4) is meant to do here. If the Minister can give a clear explanation from the Dispatch Box, that would help me and may be the end of the matter.

[Lord Thurlow (CB)]

My Lords, I am grateful to the noble and learned Lord, Lord Etherton, for identifying what I believe to be an unintended consequence in connection with the proposed forced auctions of high street property. I am pleased to add my name in support of Amendment 418.

Following many years of practice as a chartered surveyor, specifically in the commercial property market, I am well aware that one of the most difficult challenges that landlords of vacant property can face is that of the unauthorised or illegal occupation of their premises. Securing legal and legitimate possession from an occupier who refuses to leave is expensive and time-consuming and can easily—and unfairly—add to the long list of bad landlord stories.

If that unauthorised occupation involves residential property, the problems of cost and delay can increase significantly. I appreciate that the clause we are referring to does not refer to residential occupation, but commercial shops are frequently let to sole traders who use an upper floor storage space informally as residential accommodation. It is outside the terms of the lease, but it may remain a fact, so it is worth pointing out that residential occupation comes into this amendment.

Amendment 418 is designed to protect a landlord from enforcement by the local authority of the auction process when they are already doing their very best to secure vacant possession. They are trying to get rid of an unauthorised occupier. Without this possession, it becomes impossible to let the property. Who would conceive of signing a lease for a shop as a tenant with an illegal trader already in place? Surely it is wrong to penalise the landlord who is keen to let their property but is unable to do so. While legal action is under way, that landlord receives no rent and is probably paying interest on a commercial mortgage. They are likely in breach of their rental income covenants with the bank, so may be verging on defaulting on that loan, and are likely employing costly solicitors to pursue legal action for recovery of their property. Yet, by this Bill, they could be accused of keeping a property vacant.

The clock should not start on the period defined as “lying vacant” until the property is vacant and is in the landlord’s gift to be let to a tenant. I do not believe that it is the Government’s intention to auction off commercial premises that are the subject of legal action to recover possession, so I ask the Minister to ensure that, while legal proceedings are under way to secure possession, the landlord does not inadvertently fall into the trap of effective confiscation by the authorities.

This amendment is not a matter of policy or principle. It does not dispute the intention of Clause 178. It is simply a practical matter that, unamended, will lead to confusion and conflict between vested interests, which, I am sure, is unintended.

--- Later in debate ---

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I apologise that I have not been in Committee in recent sessions; I had amendments on housing. I have discovered that, as a non-affiliated Peer, it is difficult to organise the division of labour when there are so many hefty Bills going through the House.

I have a particular interest in a couple of groups of amendments being discussed today. High streets and businesses are a core levelling-up issue for so many people outside of London. The decline of the high street can illustrate viscerally the feeling of being neglected and left behind. Boarded-up shops and closing community resources such as banks and pubs can be demoralising, making it feel like the heart of a community is being ripped out. Amendments 433 and 434 from the noble Baroness, Lady Hayman, are important in this regard; she summed up in a compelling way why this is an important group.

A number of the amendments refer to consultations, which are very important. I was interested in the comments of the noble Lord, Lord Thurlow, the noble and learned Lord, Lord Etherton, and the noble Earl, Lord Lytton, regarding incentives. They show that we cannot simply declare a commitment to reviving the high street; it is a bit more complicated than that, to say the least.

I want to raise the dilemma that arises when government policies with different priorities, in completely different areas from this Bill, inadvertently make matters worse for high streets. I will reflect on and support Amendment 432, from the noble Baroness, Lady Taylor of Stevenage, on assessing the impact of pedestrianisation.

Pedestrianisation can intuitively seem like a good idea for high streets—a positive contributor to a community atmosphere, with increased footfall and increased likelihood of people popping into premises and so on. But stop and consider Naz Choudhury who, for many years, ran the successful Temple Bar, a halal Lebanese grill and Indian food restaurant in Oxford, which permanently closed recently. Why did it close? Mr Choudhury blames a certain form of enforced pedestrianisation in the council-imposed low-traffic neighbourhoods, specifically car restrictions in the Cowley Road area of east Oxford. Mr Choudhury says:

“The council’s decision to put these bollards up along Cowley Road was the main reason people don’t want to travel here anymore”.


Obviously, that is a subjective view, but there are a lot of controversies surrounding the Government’s active travel policies, which emphasise cycling and walking over driving. Businesses are saying that policies such as LTNs are having a negative impact on them. In Haringey, where I live, many shop owners say that LTNs are causing them to lose business.

The controversy around LTNs in Cowley Road in Oxford even hit the national newspaper headlines, largely because of opposition by Clinton Pugh, who is the father of the brilliant “Little Women” actress Florence Pugh. Clinton Pugh said:

“The council have literally strangled the life out of the Cowley Road and it is having a very negative effect on businesses.”


Mr Pugh, who is the owner of two or three cafés and restaurants on the road, even put up a banner accusing Oxford of censorship, quoting Orwell’s Nineteen Eighty-Four. Rather than talking to or listening to him, the council’s response was to threaten to fine him for not getting planning consent for the banner.

Beyond the celebrity stories, a serious point for this group of amendments on the high street is to note that policies such as LTNs, which I am sure are very well intentioned, can create a type of pedestrianisation that is bad for business. Too often, councils just will not listen to the complaints or look at the evidence. Cowley Road traders became so exasperated that they produced their own business impact survey of the effects of traffic-reducing measures. It revealed that at least eight shops had closed where LTNs are located; that 153 shops had been directly or indirectly affected through a loss of customers and logistical problems with deliveries to businesses and customers; and that business owners reported a decrease in turnover of 30% in some instances, with some claiming 50%. A letting agent said that the tradespeople they use had increased their call-out fee from £45 to £65 due to the time it takes to get around in a van, the extra fuel used and so on. Hospitality businesses are particularly affected. A staff member at a specialist supermarket, which people travel a long way to get to, noted:

“We don’t sell many large bags of rice now because they’re too heavy to take on the bus”.


Something that looks like “Let’s get everyone walking or on the bus, and it will all be lovely and pedestrianised” is actually destroying businesses and having a bad effect on consumers, who cannot get what they want to buy. We can see parallels between pedestrianisation and the removal of free—or any—parking spaces in town. This is a double blow to both shoppers and SMEs alike, again in the name of anti-car, active travel policies.

Oxford traders say:

“We’ve been asking for an independent business impact assessment to be carried out but the council have ignored us, so we had to do our own”.


If we are to have a levelling-up discussion, Amendment 432 would be a sensible way to sort out the pros and cons of pedestrianisation in local areas. In other words, you cannot have top-down policies that undo any possibility of local residents or businesses having a proper say. LTNs illustrate that.

[Lord Etherton (CB)]

My Lords, I apologise to the Committee: I should have disclosed before I spoke that I have an interest as the owner of high street retail premises.

[Baroness Thornhill (LD)]

My Lords, there is so much that can be said regarding high streets that is very well evidenced, and in fact there is consensus about what does and does not work. Our concern on these Benches is that the various measures in the Bill, even when combined—it is important to see that—probably do not go far enough or are bold enough to really level up or regenerate. However, this is not Second Reading. I am pleased to speak positively to this part of the Bill and to this group of improving and strengthening amendments, which have been well described in appropriate detail by their proposers, particularly the noble Baroness, Lady Hayman of Ullock, as has already been mentioned.

I have to confess to becoming mildly excited about the prospect of local government being able to oblige landlords to rent out persistently vacant high street premises through the rental auctions process. As the elected Mayor of Watford, I inherited a high street shamefully branded in a tabloid headline as “Ibiza on acid”, and where the national crime survey showed one of our town centre side streets as one of the worst crime hotspots in the country several years running. Yes, more bad headlines, but more importantly it was backed up by local people’s opinions, experiences and—never to be forgotten—their perceptions. There was much work to be done, and it took years.

Thus I have bitter experiences of first, and most importantly, trying to track down the landlords of vacant premises—in other words, those who have real legal responsibilities and can actually do something and not just pass the buck. It was rarely straightforward, and any improvement that the Government can make to ease that part of the process would be very welcome and undoubtedly strengthen this policy.

For us, the formation of a business improvement district was critical to eventual success, and one hopes that they continue to be supported. In fact, it was the BID team which was able to do much of the footwork that is going to be needed of continuously monitoring vacant units and all the other premises on the high street. Given the skills and capacity issues in local councils that have been mentioned, this is definitely going to further stretch resources, particularly in district councils. Will the Minister reassure us that the Government have plans to target these issues?

On further investigation, we found that there was often a wide range of reasons why properties were empty, many of them legitimate and often complex and challenging. Amendment 426 in the name of the noble Earl, Lord Lytton, essentially speaks to that dilemma. He may be surprised to learn that I can empathise. I say to him that any good council would and should seek to work with a landlord in the circumstances outlined in his amendment and help and support the landlord in getting the premises re-let. But I recognise that this is not always the case and despair when I hear case studies such as that from the noble Baroness, Lady Fox, of when things have clearly gone awry and councils have not listened. I do not believe in being prescriptive about it because I could stand here and tell noble Lords how pedestrianisation revitalised our high street. My instincts are always to say, “Let councils decide what suits their circumstances”, but in the full knowledge that sometimes they mess it up.

What was key was the partnership approach—agents, landlords, businesses, the council and the community working collaboratively to get things to a point where a compulsory rental auction would not be necessary. That would be a measure of its success. But all too often we found that the landlord was not the kind of one described by the noble Earl but a pension group or similar investor with a wide range of holdings and for which a couple of shops in Watford High Street were small beer. For a wide range of commercial reasons it did not “suit their circumstances at the moment” to re-let. I sincerely hope that these are the landlords that this legislation will drive to the table.

The word “community” in my list of partners is important. Amendments 417 and 437 emphasise the involvement of the community, which is the heart of any place, as we know—the hub for getting together to enjoy a wide range of activities and events. In short, it is hard to imagine that a local plan would be found sound if it did not involve a policy for the high street and significantly involve the local community in its formation. Can the Minister confirm this?