Westminster update: Law Society wins in the budget

Your weekly update from our public affairs team on all the latest developments and debates in Parliament and across Whitehall.

Palace of Westminster

One thing you need to do

Have a look at what we produced for Justice Week 2021, which ended on Friday 5 March, and watch our Question Time panel on the impact of COVID-19 on our rights.

Find out more about Justice Week

Watch the Justice Week Question Time panel

Five things you need to know

1. Law Society wins in the budget

On Wednesday 3 March, the chancellor delivered the budget in Parliament. The three-point plan is intended to support the economy through the end of the pandemic, to improve public finances, and begin to build the future economy.

We campaigned for a number of policies ahead of the budget that the government has adopted.

The stamp duty land tax (SDLT) holiday has been extended until the end of June, with a tapered transition through to the end of September. This is a win for our recent campaign and reflects an option we put to the government to avoid disruption to the property market and consumers.

The chancellor also announced a £425 million top-up for local authority discretionary grants to businesses that have been affected by the pandemic.

Ahead of the budget, we recommended that the government increase the money available through the scheme, as it has been a lifeline for many businesses.

Read our analysis of the budget

2. Law Society mentioned in National Security and Investment Bill debate

On Tuesday 2 March, the National Security and Investment Bill had its first day of committee stage in the House of Lords.

Eleven amendments that had been drafted by the Law Society were tabled by peers, and we were mentioned eight times during the debate.

Baroness McIntosh of Pickering (Conservative) moved an amendment drafted by the Law Society, stating that "in the view of practitioners, as expressed by the Law Society of England [and Wales], this amendment is needed as it would ensure that ‘national security’ in the bill will not be conflated with other issues of political or industrial concern".

The minister, Lord Callanan, argued that the amendment is not necessary as any use of the call-in power not on the basis of national security could be challenged through a judicial review.

Lord Hodgson of Astley Abbotts (Conservative) moved another amendment drafted by the Law Society, which would have shortened the period in which the secretary of state may give a call-in notice following a trigger event from five years to two. He argued that allowing the secretary of state to unwind a complex transaction after five years would be highly impractical.

The minister responded by arguing that the five year timeframe was necessary to ensure that hostile actors cannot hide transactions from the government, and that this is tempered by the requirement that the secretary of state make a decision within six months of becoming aware of a trigger event.

Both of these amendments were ultimately withdrawn, and the bill will continue through committee stage over the next two weeks.

Read the transcript of the National Security and Investment Bill debate

3. Broad overview of the budget

As well as the important announcements on the stamp duty holiday and local authority grants, the budget also contained a series of policies that may have an impact on solicitors and their firms.

As part of the government’s efforts to protect jobs through the pandemic, the furlough scheme has been extended until September. Alongside this, support for the self-employed has also been extended and those who entered self-employment in 2019/20 will now be eligible for this support.

A series of other measures to encourage investment and training were announced. For the next two years, companies that invest in eligible plant and machinery will be able to deduct 130% of the costs from their corporation tax bill.

Corporation tax itself will be rising to 25% from April 2023, though there will be reduced rates for companies with profits under £250,000.

Two new schemes to help small and medium-sized firms grow will begin in the autumn:

  1. Help to Grow: Digital – this will provide a 50% discount on approved productivity-enhancing technology worth up to £5,000, alongside free training
  2. Help to Grow: Management – this will provide training from business schools in the UK, including mentoring and peer learning. 90% of the cost of training will be met by the government

Finally, the Kalifa review on fintech was published just ahead of the budget, and signalled an ambition to drive growth in the fintech sector, which we hope will have a positive impact on lawtech, given the important relationship between the two.

Further consultations and calls for evidence around the tax system will also be announced on ‘tax day’ on 23 March.

Read the full list of budget measures

4. Counter-Terrorism and Sentencing Bill amended by Lords

The Counter-Terrorism and Sentencing Bill had its report stage debate in the House of Lords on Wednesday 3 March.

While the bill was passed, the government was defeated on an amendment tabled by Lord Anderson of Ipswich (Crossbench) which aimed to limit the number of times a terrorism prevention and investigation measure (TPIM) can be extended to three.

The amendment reflects a key concern we had raised, that the bill would remove the existing two-year statutory limit on the duration of any TPIM and potentially allow TPIMs to be renewed continuously.

While we had supported a stronger amendment which would have kept the current two-year limit, Lord Anderson’s amendment will help to ensure that TPIMs remain only a temporary measure.

Following concerns raised during committee stage, the government also introduced an amendment to strengthen the standard of proof required in the bill for the imposition of a TPIM from “reasonable suspicion” to “reasonable belief”.

This amended provision is nonetheless still a weakening of the current standard of proof, which is based on a “balance of probabilities”, and which we had argued should be retained. The amendment was, however, agreed by the House.

The bill will now proceed to third reading, which will take place on 11 March.

Read the transcript of the Counter-Terrorism and Sentencing Bill debate

5. Cladding remediation discussed in Commons

On Monday 1 March, Stephen Morgan (Labour) led an adjournment debate in the House of Commons on the costs leaseholders are facing for the removal of unsafe cladding on their properties.

In his remarks, Morgan noted the funding that the government has recently pledged to support leaseholders facing such costs, but argued that there are “still large holes in the safety net”.

Morgan called on the government to lift the cost burden from leaseholders and seek to recover the costs from the development sector, and to introduce legislation to reform the regulatory framework to ensure such a situation cannot arise again.

Responding, housing minister Christopher Pincher reiterated the funding scheme that the government has recently set out to support leaseholders with the costs of remediation.

Pincher also highlighted the Building Safety Bill, to be brought forward in the near future, which will reform the building safety regime by placing greater accountability on those responsible for buildings.

Read the transcript of the Fire Safety Remediation debate

Coming up next week

Next week, the Commons will continue to discuss the budget, with the last day of debate being Tuesday 9 March.

A Westminster Hall Debate will be held on Wednesday 10 March on residential leaseholders and interim fire safety costs, and the International Trade Committee will take evidence on the same day for their inquiry into digital trade and data, which we submitted to.

In the Lords, our international policy adviser Catherine Brims will be giving evidence to the EU Sub-Committee on International Agreements in a session on the Comprehensive and Progressive Agreement on Trans-Pacific Partnership. This will take place on Wednesday 10 March.

Legislation including the Domestic Abuse Bill, the National Security and Investment Bill, the Overseas Operations Bill, and the Counter-Terrorism and Sentencing Bill will be debated on in the chamber throughout the rest of the week.

If you made it this far...

The Brexit transition period has now ended. Take a look at our post-transition guidance for members and ensure your firm is prepared.