Wednesday 16 March 2022
Arrangement of Business
My Lords, Members are encouraged to leave some distance between themselves. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division bells are rung and resume after a few minutes.
European Union (Withdrawal) Act 2018 (Repeal of EU Restrictions in Devolution Acts etc.) Regulations 2022
Considered in Grand Committee
My Lords, these regulations were laid in draft before the House on 25 January. Their purpose is to repeal the powers introduced by Section 12 of the European Union (Withdrawal) Act 2018, which provided a regulation-making power to temporarily freeze devolved legislative competence while UK common frameworks were finalised. If approved, the regulations will also remove limitations on devolved legislative and executive competence introduced into the devolution settlements and any cross references to those powers.
The European Union (Withdrawal) Act has an inbuilt duty on Ministers to consider the repeal of Section 12 powers. Those powers are time-limited. In any case, the powers have never been used and, since 31 January this year, can no longer be used. There can now be little reason to retain them. Although the powers have never needed to be used, they provided a useful contingency while the Government and the devolved Governments worked jointly to develop UK common frameworks. The Government and the devolved Governments have successfully worked together on a collaborative basis to develop common frameworks, and the powers have not needed to be used. The frameworks that have jointly been developed now underpin a common approach across the United Kingdom to policy areas previously governed by EU law that are within devolved competence.
If approved and made, the regulations will remove the now redundant powers from the statute book. They will also remove the ongoing statutory obligation on the Government to report to Parliament on the use of these powers. The Government have produced 14 reports since the European Union (Withdrawal) Act 2018 was enacted, with the most recent report published last week.
In addition to keeping the statute book in good order, the regulations mark the progress that this Government have made jointly with the devolved Governments to develop common frameworks. These frameworks are in operation to create a consistent approach across the United Kingdom in a wide range of policy areas. I commend the regulations to the Grand Committee.
I thank the Minister for the clarity of his presentation. As he has already outlined, this SI removes the powers introduced into the devolution settlements by Section 12 of the European Union (Withdrawal) Act. These were temporary powers to prevent divergence from existing structures established in the UK by EU law while the UK common frameworks were developed. The Explanatory Memorandum points out that these regulation-making powers are no longer needed, as the Minister has already explained, because of the progress made towards developing the frameworks. It also points out that the power to make such regulations cannot be exercised after 10.59 pm on 31 January 2022. As we are now six weeks past that date, I presume that the powers no longer exist and that this instrument is therefore needed to remove these redundant provisions from the statute book.
The Government make much of the collaborative approach taken towards working with the devolved Administrations, and point out that the powers introduced by Section 12 of the European Union (Withdrawal) Act have never needed to be used because of that. My concern is that, by removing the powers from the devolution settlements, we are also removing an ongoing statutory obligation to report to Parliament on the use of the powers and, crucially, report on the implementation of the UK common frameworks.
I am a great admirer of the Common Frameworks Scrutiny Committee and the expertise of its chair, the noble Baroness, Lady Andrews, and of its members. I hear of its activities through members of the committee. In its report, Common Frameworks: Building a Cooperative Union, the Committee highlighted three problems with the common frameworks. The first was that the frameworks have been developed behind closed doors, with minimal stakeholder engagement or parliamentary scrutiny. The second was the need to clarify the relationship with the Northern Ireland protocol, and the third was the lack of information given to Parliament to enable it to scrutinise the operation of these important governmental agreements, which, it says, remain largely invisible. While doing excellent work, the committee appears almost to be working in limbo, so what progress has been made on the three problems that it identifies? What steps have been taken to present information to Parliament on a regular basis so that Members can better understand and scrutinise the intergovernmental relationship?
As usual, I am particularly interested in the quality of the collaboration between the UK Government and the devolved Governments. In various Bills that have come before this House recently, the UK Government have talked about consultation or collaboration with the devolved Governments, but they in turn have complained about a lack of meaningful consultation, having sight of a Bill only the day before it is presented to the Commons, and being presented with information without being allowed a sensible response time—so much so that the Senedd’s Legislation, Justice and Constitution Committee, in its legislative consent memorandum to the Elections Bill, made a recommendation that the Welsh Government should include a commentary on the extent of co-operation and engagement with the UK Government in all legislative consent memoranda that are required by virtue of Standing Order 29. This enables the Senedd to scrutinise the level of engagement between the Governments.
I hope that the noble Lord can assure me today that the UK Government have a plan to allow scrutiny of all aspects of the common frameworks process by Members of this House.
My Lords, I am delighted to follow the noble Baroness, Lady Humphreys, and to note that four of the six Members in this Room are from Wales. It is noteworthy that there is nobody from Northern Ireland or Scotland here. Before referring to Wales, I want to ask whether there is any substantive difference in the provisions that are being made for Northern Ireland from those being made for Wales and Scotland, and between Wales and Scotland, or is it a uniform approach for all three? Circumstances and challenges are different in Northern Ireland, as we all know.
Regarding Wales, at First Reading of the Bill, it seemed that there were powers coming back to Wales—but perhaps the Minister can clarify that there are no additional powers coming back to Wales. They are coming back to the UK, and they may be handled in a way which, as the noble Baroness, Lady Humphreys, mentioned, may or may not go down well in the devolved Governments. That brings us to the very serious point of how we oversee the working of these regulations to see that there is proper co-operation between the devolved Governments and Westminster. It is in everybody’s interests, and very often is a matter of talking early with each other, rather than waiting for something to arise.
I have seen in the context of the work of the Select Committee dealing with EU business relationships that notification goes to Cardiff often very late in the day. Ministers can then rightly respond, “Yes, we have contacted Cardiff”, but they have not given a reasonable amount of time to get a meaningful response back. I hope that will be taken on board, and that mechanisms can be developed jointly between the Government and the Parliaments in Westminster and Cardiff so that there is a proper, constructive relationship, and that, when there is a need to harmonise things, it can be done by voluntary agreement rather than imposing things from the centre.
Having said that, these sorts of regulations obviously have to come forward and one accepts that they must be enacted.
My Lords, as we have heard, this instrument will remove the Government’s powers to temporarily freeze devolved legislative competence, which were previously introduced while the UK common frameworks were finalised. The intention was that they would be used only in exceptional circumstances. I am pleased that the powers were never used. Since they were always intended to be time limited, they are now being removed.
The Minister said during the debate in the other place that the removal of these powers is
“a reflection of the huge progress that the Government have made with the devolved Governments in developing new common frameworks.”
I pay tribute to my noble friend Lady Andrews for her chairing of that committee, at which I spoke a few months ago. In the Commons, Labour’s Front Bench welcomed the removal of these powers, saying that
“these were seen as valuable safeguards at the time to ensure orderly transition, but the moment for that has certainly passed.”—[Official Report, Commons, Sixth Delegated Legislation Committee, 3/3/22; col. 4.]
Like other noble Lords today, I continue to urge the UK Government to work in partnership with the devolved Governments, which of course have their own elected mandates. It is positive to build and strengthen the union, not undermine it.
Picking up on the point from the noble Lord, Lord Wigley, I was at a meeting earlier today with the Minister for Local Government in the Welsh Government, Rebecca. She noted that the Welsh Government had not heard of the £150 council tax rebate announced by the UK Government; they were getting questions about it but had not been informed. Those niceties would take only a phone call—from Minister to Minister would be good, but so would senior official to senior official. In this day and age of communication, that should not be a problem.
I will ask two questions in conclusion. Can the Minister foresee any future situations in which these powers would be reintroduced? Does he believe that any consequential legislation is needed to fully repeal these powers? Diolch yn fawr.
My Lords, I thank noble Lords for their attention to these regulations. I think there is great unanimity that we are where we are and that we need to tidy these matters up in the way that noble Lords have outlined. It is quite clear that there is cross-party support for the removal of these regulations.
We have had a short but very helpful debate, with rousing voices from Wales. Under normal circumstances we would probably have heard from my noble friend Lord Caine, who has great experience on Northern Ireland matters; I am the understudy and will try to do my best in that regard. I have certainly learned a great deal from my discussions. In fact, I had tea with the noble Baroness, Lady Andrews, to learn more about common frameworks, which I had not really heard of until I became a Minister at the department that has now taken over this responsibility, with the arrival of my right honourable friend Michael Gove as Secretary of State.
I will do my best to answer the questions—they were asked because noble Lords want some answers. To answer the noble Baroness, Lady Wilcox, there are no plans for these powers to be replaced. They are not being replaced; that is a tick.
In response to the noble Baroness, Lady Humphreys, on common frameworks and our approach to them, we are committed to transparency in the frameworks programme and will continue to work with Parliament to inform it of significant developments beyond the point at which Section 12 powers are repealed. The devolved legislatures have also shown an interest in being kept up to date with the common framework developments, and we are working closely together with the devolved Governments on the form that future reporting on frameworks might take—so there is that commitment, and we need to make sure that we deliver against it. I am sure that noble Lords will hold this Government’s feet to the fire in that regard.
The noble Lord, Lord Wigley, wanted to know about any difference in approach between Wales, Northern Ireland and Scotland. There is essentially a uniform approach across all devolved Administrations, but I was struck by something that the noble Baroness, Lady Wilcox, said. We need to get devolution right, because we all have a shared interest in a strong union through effective devolution. I know that, working together, we can always have that in mind in ensuring that for the devolved Governments or Administrations—to talk about Northern Ireland in particular—this works alongside the strengthening of our overall union as four nations and one United Kingdom.
I have done my best to address the points raised, and I am happy to talk about them, if I have not done so, outside this forum. For the reasons set out, I commend the regulations to the Grand Committee.
Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2022
Considered in Grand Committee
My Lords, I beg to move the regulations. This statutory instrument was laid before the House on Monday 31 January 2022 under paragraph 12(1) of Schedule 7 to the European Union (Withdrawal) Act 2018. It was debated and moved in the Commons Second Delegated Legislation Committee on Tuesday 8 March. Mirroring legislation has been prepared for data registered against properties in Northern Ireland and was considered by the Assembly, also on 8 March. Scotland operates its own energy performance of buildings register and is not covered by this instrument.
This is probably one of the most straightforward statutory instruments that noble Lords will be asked to consider this year. It is almost exactly 12 months ago that I introduced and we last debated a similar measure, and last year the Committee dubbed that SI
“as simple as they come”.—[Official Report, 18/3/21; col. GC 9.]
The instrument relates to the statutory fees that are charged when data is registered for energy performance certificates, display energy certificates and air conditioning inspection reports for properties in England and Wales. Fees are applied to two classes of data registration covering domestic and non-domestic properties. This instrument proposes to reduce fees from £1.64 to £1.50 when data is lodged for domestic premises and from £1.89 to £1.70 for non-domestic premises.
Fees charged for data registrations in England and Wales were last adjusted nearly one year ago. A significant reduction in fees was possible at that time because government had invested in a new, cloud-based digital platform and had moved away from the fixed hardware model, run on concession contracts, that had been in place since 2008. In the last 12 months, contractual costs for building the service have fallen out of the model, which means that we have the opportunity to extend last year’s reductions further.
The new EPB register became operational in September 2020 and has been managed in-house since then. Significantly, it passed the digital service assessment in December 2021 and is the first citizen-facing digital service in my department to be hosted on the GOV.UK platform. It is also one of very few government digital services to publish performance statistics. The register now carries approximately 28 million energy certificates across all types, which includes more than 2 million data lodgements since September 2020, which we are receiving at a rate of around 155,000 each month. Importantly, by managing this cloud-based service in-house, we have delivered efficiencies and reduced the overall burden on public resources.
This instrument builds on the fee reductions we introduced last year. New fee rates set out in this regulation will allow costs of operating the Energy Performance of Buildings Register service to continue to be met. We aim for the register service to be cost neutral, without profiteering, but we do not expect taxpayers to subsidise a loss. Costs of the service, and the fees we propose, have been calculated in line with government policy and tested with stakeholders in the property energy profession.
Officials in my department have engaged with officials from the Treasury, the Department for Business, Energy and Industrial Strategy, the Northern Ireland Executive and the Welsh Government, and all have agreed that, given uncertainty in the property market, recent movements in interest rates and higher inflation, the modest reduction proposed today represents the most practical way to amend fees and ensure that the register is run on as close to a cost-neutral basis as possible.
The small differentiation between fees for domestic and non-domestic lodgements reflects technical differences between the classes of data, but it is now significantly smaller than historically.
The Committee will recall that the United Kingdom aims to bring greenhouse gas emissions to net zero by 2050. Heating and powering buildings currently accounts for 40% of the UK’s total energy usage. We must therefore ensure that buildings are constructed to high standards of energy efficiency.
In December last year, we implemented an uplift to Part L of the building regulations to improve conservation of fuel and power. When it comes into force this summer, new homes and new non-domestic buildings will be expected to deliver 30% and 27% fewer carbon emissions respectively. We are still on track to develop the full technical specification for the future homes strategy and the future building strategy, which we will consult on in 2023.
The Energy Performance of Buildings Register is a key tool in supporting our aspirations for improved energy efficiency. It holds valuable information about the energy performance of buildings. We want homeowners, commercial building owners and occupiers to improve the energy efficiency of their buildings.
Energy certificates improve market information, so that consumers can make informed choices. An energy performance certificate is needed whenever a property is built, sold or let. At a glance, a consumer searching for a new home or for commercial premises can determine how efficient a property might be, while an owner can consider recommendations for how they might improve the energy efficiency of their property.
To conclude, these regulations serve a very specific purpose: to reduce the statutory fees charged when data is registered for domestic and non-domestic energy performance certificates, display energy certificates and air conditioning inspection reports. Over the two classes of fee, reducing domestic data registration fees from £1.64 to £1.50, and non-domestic data registration fees from £1.89 to £1.70, extends the savings that we introduced last year.
Colleagues in Northern Ireland are introducing their own mirroring legislation to ensure coherence between different parts of the United Kingdom that use the same register. This will ensure that fees charged for Northern Ireland data lodgements are in line with those for England and Wales.
I hope colleagues will join me in supporting the draft regulations. I commend them to the Committee.
I warn noble Lords that there is likely to be a series of Divisions in the Chamber quite soon, so prepare to be interrupted.
I will keep off that subject.
I congratulate the Government on implementing a computer system that means it is actually cheaper to do something—perhaps the department could speak to the National Health Service about its implementation of digital systems, which could be better.
I am pleased that the Minister went through the slightly broader issues of home efficiency. This is a big subject and I am not going to speak for long on it, but I need to talk about it a little, and I welcome the fact that he did. I recognise that making our homes and buildings more generally energy efficient—we have 29 million of them in the UK and 2 million commercial buildings—is not an easy task. We all recognise that. But it is something that has to be done to meet net zero.
My Lords, there is a Division in the House. The Committee will suspend, in theory for 10 minutes, but if noble Lords were able to vote more quickly than that and indicate to me that they have voted successfully, we can recommence more quickly.
Sitting suspended for a Division in the House.
I was reminding the Grand Committee that we have 29 million houses in the country and one of the least energy-efficient housing stocks in Europe. Half of them were built before 1956, and a fifth of them before 1919—I am a proud owner of one of them, which operates off oil heating because it is off the grid, like many.
As we all know, we have a huge challenge at the moment with heating bills. The message from the Climate Change Committee, which looked at this recently and produced its report a couple of weeks ago, was to plead with the Government to get on with it. The task is huge and we need to get on with it now. There was a government commitment of, I think, £8.26 billion for 2026. I should be interested to hear how much we have actually managed to spend of that; most of the public money is obviously going on social housing.
We should not just spend money on big nuclear power stations—I shall try not to get into that argument. Of the estimated £18 billion of private and public money that is actually required each year up to 2050 to get through this problem, there is £5 billion per annum savings on it. It is around that.
My colleagues and friends in Denmark have the same energy price increases. Are they concerned about it? Not particularly, because the bills are so low. Why is that? Because of the energy performance of buildings in Scandinavia.
I plead with the Minister to push very strongly to get back to the zero-carbon homes target—I should be interested to understand whether the 2025 deadline for heat pumps in new homes will be a legal requirement—and get on with the programme.
That is a more incoherent speech from me than normal, but this is an important issue and one which I recognise is not easy to solve.
My Lords, I cannot argue with much of what the noble Lord just said on energy performance and energy efficiency. I visited Sweden a number of years ago and was impressed by the way Scandinavians do so much right.
We know about the statutory instrument and about the fees and charges. The reduction in fees is clearly welcome and the Official Opposition support these changes.
I have just a couple of questions for the Minister. Since these regulations relate to England and Wales only, what recent discussions has the department held with the devolved Government of Scotland and the devolved Administration of Northern Ireland on related fees? Can the Minister explain the difference in fees between the two classes of data registration covering domestic and non-domestic properties? Finally, given that fees charged for data registrations in England and Wales were last adjusted nearly a year ago, why are they being changed again?
My Lords, I thank noble Lords for a short, sharp and focused debate. It is appreciated. The fees have changed again a year later because there is essentially a dividend around an IT project, as the noble Lord, Lord Teverson, said; we do not want to profiteer or make a profit, but the cost of running the service has gone down. That comes in the form of lower prices for consumers and commercial users. I think I mentioned in my speech why there is a slight difference between non-domestic and domestic rates, as noble Lords will see in Hansard.
In response to the noble Lord, Lord Teverson, I understand that there is an energy company obligation between 2022 and 2026, estimated at £1 billion per year, to enable poorer, more vulnerable households to get more energy efficient. That is a BEIS policy, and I am not an expert on it.
My property interests are declared in the register, as I am sure the noble Lord’s are. It is a difficulty that, the older the property—I own a Queen Anne cottage—the harder it is to hit the net-zero target; there is a real issue around older properties, even if there is real resolve from the homeowner to be carbon neutral over time. That is a point well made. Brains across government are thinking across different departments about how we embrace that challenge. One way is to set standards, and the future homes standard is critical to do that for new build, which is again only a certain proportion of the existing stock. The question then is how we retrofit and deal with the stock we have in this country.
However, I think we are going beyond EPC price ratings, which are essentially good news for the consumer and people who pay these bills. I take the points from noble Lords that it is good to see an IT project working well, being managed in-house and done efficiently. I commend these regulations to the Committee.
Combined Authorities (Borrowing) Regulations 2022
Considered in Grand Committee
My Lords, these regulations were laid before this House on 31 January 2022. The other place approved them on 14 March 2022. If approved by this House and made, they will implement a commitment made by the then Chancellor of the Exchequer, my noble friend Lord Hammond, back in 2016 to extend the borrowing powers of mayoral combined authorities that have agreed debt caps with HM Treasury, which is reflected in the devolution deals that North of Tyne, South Yorkshire and West Yorkshire have agreed with government.
This extension is another important step towards empowering these mayoral combined authorities to invest in infrastructure while giving local leaders the tools needed to stimulate local economic growth, increase productivity and seize levelling-up opportunities available to their areas. In the levelling-up White Paper we set out plans to transform the fortunes of places across the UK by spreading growth and prosperity in areas that feel as though Westminster has forgotten about them. That paper sets out a series of long-term missions that put us on a trajectory towards that goal, including giving every part of England that wants one a devolution deal by 2030.
Devolution is a central part of our levelling-up agenda and we want to give areas the powers they need, along with a simplified, long-term funding settlement. We are committed not only to extending devolution to new areas but to deepening it in areas that already have devolved powers. The regulations we are discussing today will live up to that ambition: deepening devolution in North of Tyne, South Yorkshire and West Yorkshire in line with commitments we have already given, by providing new and deeper powers to the local leaders so that they can act more flexibly and innovatively to respond to local need and be held to account by local citizens.
Put simply, these new powers will allow these three combined authorities to borrow not only for their transport functions but for any of the other functions conferred on them as a result of their bespoke devolution deals. These areas will be able to make the most of new opportunities by borrowing for their investment programmes, delivering improved public services and greater prosperity for their areas. At the moment, the legislation in place allows combined authorities to borrow only for transport or, where the mayor is also the police and crime commissioner, for such purposes. The primary legislation also provides that the Secretary of State may, by regulations, confer the ability to borrow for additional functions.
The draft regulations specifically provide that the three named combined authorities can borrow for all their functions other than transport, which is, of course, already covered by the existing primary legislation. Each of the three mayoral combined authorities and each of their constituent authorities—15 in total—has given consent to these regulations. If Parliament approves these regulations and they are made, then North of Tyne, South Yorkshire and West Yorkshire mayoral combined authorities will be able to borrow for all their functions. I should say that, through regulations made four years ago, this is already the case for the six other mayoral combined authorities of Greater Manchester, Liverpool City Region, West Midlands, West of England, Cambridgeshire and Peterborough, and Tees Valley. It is also the position for the generality of local authorities, which are empowered to borrow for all their functions.
In the same way as a local authority, combined authorities are subject to the requirements for borrowing provided in the Local Government Act 2003. The prudential borrowing regime requires that an authority can borrow lawfully only if it can demonstrate that servicing and repayments of debt are affordable. As such, this gives the necessary assurance that the proposed borrowing powers will be used appropriately. I add that, in the case of combined authorities, this ability to borrow is also subject to a debt cap agreed with the Treasury. Each agreed debt cap specifies the ceiling for the mayoral combined authority’s debt for 2021-22. Debt caps for future years are currently being agreed with all nine mayoral combined authorities.
These regulations fulfil our existing promise to deepen the devolution deals of these three combined authorities and extend their borrowing powers to bring them in line with the six other mayoral combined authorities. With this extension, they will be able to borrow to make investments in infrastructure that are essential to an area’s ambition for growth. We firmly believe they will also lay the groundwork for further levelling up in these areas. I commend these regulations to the Committee.
My Lords, this instrument implements a 2016 commitment to extend the borrowing powers of mayoral combined authorities. As the Minister noted, it reflects devolution deals agreed with the Government for North of Tyne, South Yorkshire and West Yorkshire.
During the debate in the other place, the Minister said that this is
“another important step towards empowering mayoral combined authorities to invest in the right infrastructure while giving local leaders the tools needed to stimulate local economic growth, increase productivity and seize the levelling-up opportunities available to their areas.”—[Official Report, Commons, Seventh Delegated Legislation Committee, 9/3/22; col. 3.]
Labour colleagues in the other place welcomed the instrument and reminded the Government that Labour mayors had indeed been calling for this change.
I politely and respectfully ask that the Minister recommends to his colleagues in the Department for Education that they trust the judgments of the MCAs when finalising the skills Bill that is about to return to your Lordships’ House.
I have two short questions for the Minister on this business. Do the Government intend to extend these borrowing powers in further devolution deals? What steps will they take to monitor levels of borrowing?
My Lords, that was a very short and knowledgeable debate. I make the general observation that we are both former local authority leaders. We are the most centrally taxed nation in western Europe, but we also hold the least amount of debt below the level of national debt. That is the policy background for all this. Essentially, this moves to a level playing field for all mayoral combined authorities.
I have just been given a helpful note to say that we are negotiating deals, so the points raised by the noble Baroness, Lady Wilcox, are in play and will be part of the negotiations with all the mayoral combined authorities. We all know that the reality is that the levers required to change places often require thinking about local taxation that is appropriate to a local place, but also about borrowing. If you get that right, you can borrow in a way that provides a real dividend for local areas. Those flexibilities are part of what makes local government function more effectively. This is a step in the right direction and I am sure that more will follow.
Committee adjourned at 4.55 pm.