RICS response to the Queen’s speech December 2019
This Queen’s speech December 2019 comes after one of the most politically and economically turbulent periods the UK has ever seen.
Given the significant parliamentary majority the Conservatives now hold, it is all but assured that the speech – and therefore the government’s legislative programme – will pass through the House of Commons.
The speech opened with the government’s ambition to leave the EU. The Conservative’s election pledge to ‘get Brexit done’ and commence trade talks with the EU and leading global economies will start from today (Friday).
There were some welcome indicators of government’s intent for the built and natural environments, including the announcements of a significant investment in infrastructure, bolstering house buying activity, bringing changes to business rates, and tackling climate change, all of which echo and align with RICS’ own priorities. Further announcements around protecting tenants and enhancing building safety are also welcome.
With a parliamentary majority of this magnitude, however, comes increased likelihood of government Bills passing and therefore great responsibility. It is imperative that the government carefully considers the social and environmental impact of its pledges.
The Queen’s speech saw the new government make good on its manifesto pledges to help hundreds of thousands of small independent businesses. The government claims that reforms and reliefs will reduce the burden of business rates by more than £13bn over the next five years. This includes switching from RPI to CPI indexation, increasing the threshold for the standard multiplier to £51,000 and doubling the threshold for small business rate relief, meaning over 675,000 of the smallest businesses will pay no rates at all.
In their 2018 budget, the government announced a package of business rate support for high streets and town centres, providing 33% off retailers’ business rate bills from April 2019 for properties with a rateable value of below £51,000. This was available to a range of retail properties such as shops, restaurants, cafes and pubs. The government has now promised to extend the discount to independent cinemas and grassroots music venues, and to give a further £1,000 cut in business rates – on top of the existing 50% relief – to independent pubs. This will be welcome pre-Christmas news for the thousands of struggling pubs, restaurants and shops in high streets and town centres across the country.
Earlier this year, the government planned to introduce the Non-Domestic Rating (Lists) Bill 2017–19, which recognises that rating revaluations must take place more frequently and is designed to bring in three-year revaluations, beginning in 2021. This Bill was lost when parliament was prorogued in October, but RICS is pleased to see that the government intends to reintroduce it in the next session.
We believe, however, that more needs to be done. While the government has promised a fundamental review of the business rates system – long called for by RICS – it also needs to address the underlying problems facing high streets and town centres, which requires investment in planning, infrastructure and housing. There also needs to be some recognition of the fact that large, multiple-site retailers are also facing difficulties, evidenced by a decline in big brands.
The Queen’s speech contained numerous announcements to do with housing, the standout intention being assistance for local first-time buyers. While lacking in detail, this will be welcome news to housing sector participants as the RICS Housing Market Forecast 2020 predicted a flatlining of housing transactions over the next year.
The speech also declared support for increased tenant protection. We welcome this news, especially considering the significant increases in the number of private rented sector (PRS) households across the UK, but we believe that any intervention needs to be carefully considered and have long-term goals. The regular and fragmented interference from previous government administrations in the PRS has caused disruption, which has inhibited the stable market conditions required for investment. These changes have resulted in many landlords leaving the market, leading to reduced supply and increased rents.
We would therefore urge this government to support and adopt the Regulation of Property Agents (RoPA) recommendations and recognise the role of RICS as an appropriately resourced independent professional body in a future regulatory regime. A regulated PRS would enhance landlord-tenant relationships and create confidence for investors, leading to a better tenant experience.
In addition, we would also urge the government to remove the section 21 ‘no fault’ eviction process, but only when a viable alternative is established and embedded. This alternative would require significant reform to existing court processes or the creation of a housing tribunal. We also call for the government to commit to not introducing rent caps.
Fire safety is a multifaceted and complex issue that must be addressed as a priority, particularly in light of recent devastating events across the UK. As a contributor to the Hackitt Report, we are pleased to hear the government’s intention and commitment to building safety.
It is imperative that parliamentarians work together to take on advice from sector experts and introduce clear, coherent policy and legislation to embed universally agreed fire safety standards. This should start with adopting all of the Hackitt Report recommendations and amending England’s building regulations to incorporate a requirement for mandatory sprinkler systems in residential buildings above 11m in height.
As a leading professional body in the sector, RICS has undertaken various activities to improve fire safety, such as forming the International Fire Safety Standards (IFSS) Coalition and commissioning the consumer guide A clear, impartial guide to fire safety, published in September 2019. We would urge the government to support RICS’ consumer guide and the IFSS Coalition, and adopt and promote the international standard when it is published in 2020.
Climate change mitigation
RICS welcomes the inclusion of the Environment Bill and the Agricultural Bill on the legislative programme. The Environment Bill, at its second reading pre-election, covered a number of vital areas across land management and climate change mitigation. The Agriculture Bill, which sets out the framework for the new Environmental Land Management scheme, is underpinned by the principle of ‘public money for public good’.
We would like to see government focus on the development of active ecosystem services. Optimum management of natural assets can bring benefits such as flood mitigation and carbon sequestration. Surveying professionals are vital in developing new approaches to valuation, appraisal and management to support the growth of viable markets. However, private investment will be essential to realise the potentials benefits of efficient management of natural capital across economic, environmental and social indicators.
In order for the government to achieve its net zero targets, it must improve energy efficiency within the UK’s building stock. There must be both an incentive across the sector to retrofit and available professional skills capacity within the industry to undertake small- to large-scale measures.
Domestic buildings alone are responsible for around 20% of the UK’s carbon emissions, and in recognition of this, we continue to call for the government to reduce the VAT regime for home repairs, maintenance and improvement work. Reducing VAT could provide a boost in the implementation of a range of retrofitting measures across the housing sector and encourage the adoption of a whole-life perspective of the built asset. We will be working closely with our expert professionals to assess the full potential of this measure.
To support the transition of the sector to being low-carbon, we call on the government to bolster the green construction skill base capacity. We welcome the government’s pledge to invest an additional £3bn to support the creation of a ‘national skills fund’.
Kindly shared by Royal Institution of Chartered Surveyors (RICS)