Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Debate between Baroness Laing of Elderslie and Marcus Jones

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 5th September 2017 Commons Chamber

[Mr Marcus Jones]

Before I talk about the new clause, I would like to make a few observations about the hon. Gentleman’s opening comments. He mentioned the Local Government Finance Bill, which eventually fell when the general election was called. I spent many happy hours with him in that Bill’s Committee, where we debated the merits of allowing local areas to keep more of the taxes they raise locally. I reassure him that, as per our manifesto in the last general election, we are still absolutely committed to allowing local areas to keep more of the taxes that they raise locally. I expect that we will work over the coming months with the local government sector to discuss how we can take that aim forward.

On the point that the hon. Gentleman made about operators gaming the system by, for example, purporting to lay new fibre cable but simply relighting existing fibre cable that is already in the ground, I reiterate that the relief is all about the physical laying of new fibre in the ground. We believe that the definitions in the regulations provide a clear way of capturing what constitutes new fibre, so we consider that we will not be providing business rate relief when new fibre is not being installed and people are merely relighting existing fibre that is already in the ground.

I am grateful to the Opposition for tabling the new clause and giving us the opportunity to discuss at greater length the operation of the relief. Although, as I will explain, we cannot agree to the new clause, I hope that I can provide some detail and assurances on the operation of the relief. It is important to recognise that investment in fibre is a long-term commitment. To support and incentivise that commitment, the relief for new fibre will apply for a five-year period between 1 April 2017 and 31 March 2022. That was the commitment given by the Chancellor in the autumn statement of 2016, and that commitment will be met through the Bill and the draft regulations that we published last week. This is part of a wider package of measures worth £1.1 billion that we announced at the autumn statement to support the market development of digital networks underpinned by full fibre, to ensure that we have the world-class digital infrastructure that we need. This includes £200 million to support local bodies in the roll-out of full fibre networks in their area, and in July 2017 we launched a £400 million investment fund providing finance for network providers to match their fibre investments. Alongside the legislative changes we brought forward in the Digital Economy Act 2017, such as changes to the system that governs access to land and the powers for universal broadband, we are therefore creating the right environment for investment. This measure is a crucial part of that: it is crucial that we provide the necessary support and the environment to allow this investment to happen, and that is what the Bill will do.

Although I am not unsympathetic to the hon. Gentleman’s new clause, I do not think it would support the overall measure to require the Government, as the new clause would do, to review the operation of the relief only one year into the five-year period. This would create significant uncertainty in the sector about the future of the relief, especially as the new clause specifically questions whether a five-year scheme is appropriate. That could in itself damage the success of the scheme and jeopardise the returns we expect for both businesses and households.

As I have said, we cannot agree to the new clause. However, the Government do of course keep all taxes and reliefs under review, and that will include the tax relief for new fibre. We will continue to track the operation of the scheme, and where we believe it can be improved, we will take action. The Bill will allow us to do that. It will also allow the Chancellor in the lead-up to the conclusion of the scheme in 2022 to consider its success and whether it should be reviewed or repeated for future years.

The Bill allows for future relief schemes within the boundaries of telecommunication infrastructure, and for different levels of relief and different technologies within those boundaries, but, as with all taxes, that is a matter for the Chancellor of the Exchequer as part of the Budget process. However, I can give some details of where we will meet some of the aspects of the new clause from existing legislation and practice.

Under the existing local government finance system, local authorities are required to submit to my Department non-domestic rating returns containing information about the business rates income and relief in their area. These are provided before the start of the year as estimates, and after the end of the year as final out-turns. This information is published in full on my Department’s website. I can assure the House that these returns will be amended to include separate information about the level of new fibre relief, so this information will be available for each local authority in England. We expect the first returns to include this information to be the out-turn data for 2017-18, which are expected to be published in the autumn of 2018.

At earlier stages in the progress of the Bill, I gave the House the assurance that we will compensate local government for the cost of its share of the relief. We restated that commitment in the consultation document that we published last week, and I give the same assurance again today. The relief that will be awarded on the central rating list held by my Department is not included in the published return provided by local government, but I can confirm that we will also publish the value of the new fibre relief in respect of the central rating list.

I also assure the House that we take very seriously the challenge of developing a suitable mechanism to deliver relief to new fibre, and that we are listening to the views of the sector. We have been working with Ofcom, the valuation office and the sector to ensure we have the correct mechanism. Last week, we published a consultation document, as I have said, and draft regulations illustrating how this will work. We will have further dialogue with those stakeholders, collect views as part of the consultation and publish a summary of responses to that exercise. In view of the assurances I have given, I hope that the hon. Gentleman will not press his new clause.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

Schedule agreed to.

Clauses 5 to 6 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

As indicated on the Order Paper, Mr Speaker has certified that clauses 1, 2 and 5 relate exclusively to England and Wales, and are within devolved legislative competence. As the Bill has not been amended in Committee, there is no change to that certification.

Under Standing Order No. 83M, a consent motion is required for the Bill to proceed. I shall now suspend the House for about two minutes while the Government table the appropriate consent motion, copies of which will be available shortly in the Vote Office and will be distributed by Doorkeepers.