Non-Domestic Rating (Rates Retention, Levy and Safety Net and Levy Account: Basis of Distribution) (Amendment) Regulations 2020

Lord Liddle Excerpts

Tuesday 3rd November 2020 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I think the paper before us and the speech we have just heard must convince all Members that the non-domestic rates system is something of an enigma wrapped in a mystery, as Winston Churchill said about something else. There is no better person to talk about it than a Minister who actually understands local government, and that is a shared commitment I have. In my political life I have been on three different authorities: Oxford City, Lambeth and now Cumbria, which I declare as an interest.

I would like to use this opportunity to probe the Government’s intentions on their general policy on non-domestic rating. First of all, this is a muddle. Do the Government have plans for a long-term reform of non-domestic rates, and within what timescale? Economists argue seriously for switching to a system of land value taxation—is this something the Government might contemplate?

Secondly, there is the immediate question of business rates, which is the situation we are currently in with the Covid epidemic. We welcome, obviously, the relief given for the current financial year, but what will happen next year? Will we go back to what I think is a discredited system of complex formulae, a rate base we do not really understand and valuations which are often out of date? What will happen next year?

Thirdly, do the Government recognise—I do not think the public recognise this—that non-domestic rates are actually a very big tax? They are a very big tax indeed on business; I think it comes out at something like 1.7% of GDP. It is a very important part of the national tax base. When you look at other countries, our friends over the channel, France levies only 0.7% on business rates and Germany only 0.3%. When you look at the thriving small towns on the continent by contrast with the dead town centres that we have in so many of our cities, it is not surprising that the fact that we impose such high taxes on business through the rating system plays a part. This is a very big problem with the emergence of online competition, and this makes it a far bigger problem in the UK than it is in countries on the continent where business rates are less of a factor in costs.

Then there is the question of the Government’s general policy on local government finance. Is it the Government’s intention still to make local authorities more dependent on the income they raise, and gradually to phase out government grants to councils—which is what the Government said they were doing in the George Osborne era? Business rates retention was introduced as part of that philosophy of making authorities more dependent on their own tax base and less dependent on central government grants. The argument for that is that it incentivises growth policies, because you have an incentive for growth. The argument against is that if areas are poor, they will not get much richer through a policy that favours authorities with high economic growth rates. Is this approach of making authorities dependent on the money they raise locally consistent with this Government’s levelling-up agenda? That is a very big question. I favour a reform of government grants, a new equalisation formula and—I know the Government do not like this phrase—a form of fiscal federalism in England. The present system needs radical change.

Covid-19: Planning System

Lord Liddle Excerpts

Monday 8th June 2020 Lords Chamber

[Lord Greenhalgh]

I am afraid that I did not capture all of that because of the quality of the transmission, but I can certainly say that we will be taking into consideration Oliver Letwin’s findings in his report.

[Lord Liddle (Lab) [V]]

Can the Minister give us a timetable for what the Government intend to do, and when, given that there is an urgent need for action in this area?

[Lord Greenhalgh]

I am afraid that I cannot give the noble Lord a precise timetable, but we are well aware that many of the emergency measures that we need to reboot the economy, including making the requisite planning changes, need to occur before the Summer Recess.

Housing for the Homeless

Lord Liddle Excerpts

Thursday 14th May 2020 Lords Chamber

[Lord Liddle (Lab)]

My Lords, in one minute I have time for one point. It is about the very important role that local government has played and the heroic efforts that councils have made throughout the country to provide decent accommodation for local people in this Covid emergency. I note this as a member of Cumbria County Council. What will happen when this emergency is over? Will we throw these people out on the streets again or are we going to try to make proper long-term provision? That would require adequate government funding of local government. The costs to local government of this Covid emergency are estimated at £10 billion. So far, the Government have provided £3.8 billion and are hesitating about meeting the rest of the gap. But unless this gap is met and the funding continued, how on earth will the homeless continue to be provided for?

Northamptonshire (Structural Changes) Order 2019

Lord Liddle Excerpts

Tuesday 11th February 2020 Grand Committee

[Lord Deben (Con)]

My Lords, I query the process. Having been the Secretary of State responsible for local government reorganisation, I find this process extremely peculiar. The Secretary of State asked the principal councils in Northamptonshire to decide how they wanted the future to be, but he said that Northamptonshire could not be a single unitary and if it were going to be three unitaries, they had to find some extremely good reasons for it. What we have here is a series of commissioners proposing a particular answer and the Secretary of State thanking the commissioners for all their work and presenting local people with a choice that is not a choice. I am not happy with that as a procedure.

Then we discover that we are supposed to think that the local people will be thrilled about it because there were 300-odd responses to a statutory consultation from a population of something like 700,000. We also had a number of businesses and others who thought it was a frightfully good idea. One of the questions that was asked—this is fascinating—which was thought to be a very good argument, was about whether there should be fewer councils. That is not the issue. The issue is why should we have two councils rather than three or one. That is the first question. I find the process very peculiar.

The second thing that seems odd about it is the decision that the historic county of Northamptonshire should be treated differently from the historic country of Cornwall. I am not suggesting that either is the right answer, but it seems that you have to have a reason for it. When I had to deal with Sir John Banham’s report, one of the things I found very difficult was that a number of the proposals did not seem to tie up with other proposals; it was therefore quite difficult to present them to the House of Commons because the other place, quite naturally, asked why it was that the proposals for this place were based on these arguments and the arguments were overturned in the proposals for some other place.

That leads me to question whether we have any idea about what we are trying to do. What is the Government’s view of local authorities? If we are going to do them piecemeal because of a disaster, I understand that we have to do it quickly—I will not hold up the proceedings any longer than I have to in asking these fundamental questions; I certainly will not suggest that one is not content with this—but it does not seem to be very good business. It does not seem to be a sensible way to proceed.

That leads me to my third point, which is simply this: we have had some quite successful changes in local government. If I remember rightly, the original changes in 1974, which were Conservative ones, were largely bad because they were based on the principle of having a whole lot of councils, many of which were not viable. For example, in my county of Suffolk, we should have had two unitary authorities: the old county council of east Suffolk and the old county council of west Suffolk. That would have been sensible. Instead, we had eight district councils and a county council. It is a very large area, much bigger than Northamptonshire, and it was not a sensible thing. Ever since, there have been attempts for councils to work together. That is now happening. East Suffolk Council is an amalgamation of two district councils. It is true of Mid Suffolk District Council and Babergh District Council and of the western district councils, which are now working together because that is the only way in which they can provide proper services at a proper price.

I do not particularly like neatness. It is the enemy of civilisation. I do not like the concept of being neat for the sake of it, but I do like rationality, and my problem here is that I see no rationality behind this. It looks to me as if there was a failing county council, it was a disaster, we put in some people to hold the place together and now let us get some answer, which we will have, but let us not be too careful about whether we have a philosophy behind it. What sort of numbers should we be dealing with in the historic county of Northamptonshire? Somebody should have said, “What about a unitary authority?” That is one answer. I am not suggesting that it is necessarily right, but should it not have been a question that was asked? Would it have been significantly more expensive? Then you would not have had to have a children’s trust. I am a bit worried about the need for a children’s trust but nobody thinks that you have to have any other, countywide, for what is not an enormous county and one that is quite a reasonable shape.

I have stayed behind because I want to know what the Government’s philosophy is. I know a number of the Minister’s civil servants from my own history—they have been around for quite some time—and I always want to know why we decide on a particular answer. This decision is not based on a “why”; this decision says that we are doing it because it is the easiest, quickest, simplest way—and pray to God it works. I am not sure that that is government.

[Lord Liddle (Lab)]

My Lords, I declare an interest as a county councillor in Cumbria, and some of my remarks are going to relate to Cumbria in the context of what the Government have decided on Northampton- shire. I agree with many of the general points that the noble Baroness, Lady Pinnock, and the noble Lord, Lord Deben, have made, but I am rather concerned that the Northamptonshire model is being seized on by Ministers as something that they can go around the country imposing on people, whatever they think. The cause of that suspicion is that Mr Jake Berry, the Minister for the Northern Powerhouse, summoned the leaders of the councils of Cumbria to see him and basically told them that the only option for the way forward was two unitary authorities in Cumbria—a county of some 500,000 people but obviously a vast geographical area—and that that was basically the Government’s intention. I realise that the noble Viscount, Lord Younger, may not be in a position to answer my questions, but I would be very grateful if he would commit to send me a letter in answer to the points I am about to make.

First, what is the current position on ministerial powers in relation to local government reorganisation? As I understand it, there was a provision in the Local Government Act to allow the department to impose schemes on areas but these powers have now lapsed. I am not sure whether I am right about that, so I want to know what the statutory power is at present and whether the Government are considering—because I know that there is talk of a devolution White Paper later in the year—taking on the power to reorganise local government even if there is not unanimous agreement? I rather gathered from what the Minister said that although seven of the eight authorities said they would accept the two-unitary structure in Northamptonshire, it was not necessarily unanimous of all the authorities. I do not know what the position is there. So, the first question is: where do we currently stand on ministerial powers and on the Government’s intentions for the future, given the Prime Minister’s laudable desire to make local government work better as he sees it and to devolve power?

Secondly, do the Government have rules about what they regard as the minimum size of a unitary authority? Again, there is talk of the normal rule being a population of 300,000, but is that a rule or is it just a thought when people are looking at these questions?

--- Later in debate ---

[Viscount Younger of Leckie]

I think that I heard “dreadful” at least four times. I say, perhaps as a reassurance—although I do not think that it will wash with the noble Lord—that the names have been chosen locally. Admittedly there was no competition, but they were chosen locally rather than being imposed on them.

I shall go further on the consultation. The Northamptonshire Healthcare NHS Foundation Trust and Healthwatch Northamptonshire support a reduction in the number of councils. They both welcome the closer integration possible as a result of having to engage with fewer authorities, and agree that this is a positive opportunity for change to secure a sustainable future. The Northamptonshire police and crime commissioner is supportive and stated that the

“creation of unitary authorities would bring about clarity for the public and present opportunities for greater co-ordination, realisation of efficiencies and simpler partnership working.”

Finally, the Northamptonshire County Association of Local Councils reported that an overwhelming majority of town and parish councillors supported the principle of unitary authorities being established. We should not dismiss the opinions of local people in this respect. This allows me to pick up a point made by the noble Baroness, Lady Pinnock, about taking “local” out of “local government”. I point out to her that the new parish and town councils are in the process of being established, including in Kettering, Northampton and Wellingborough—note those names. I welcome and encourage this as an important way to strengthen local democracy and enable decisions to be taken to reflect the needs of local communities. I do not agree entirely with the noble Baroness that the local is being taken out the process. In my view, we still have some very robust local democracy.

I will pick up another point made by the noble Baroness about the role of councillors in the cabinet system. I think her point was that only 10 were making decisions, as opposed to the other 93—sorry, 89; my maths is bad. It will be for the new councils to determine the role of councillors and to ensure that all councillors can take a full role in representing their residents and ensuring an effective local democracy.

Furthermore, as to the size of wards, for the election in May 2020, each ward, which are county electoral divisions, will have three members. For the next election in May 2025, we expect the independent boundary commission to undertake a full electoral review. It is for the commission to decide the number of councillors and the size of wards. Experience shows that the new unitary councils establish strong and effective arrangements at parish and community levels, to add a little more to what I said. We would expect the new Northamptonshire councils to follow best practice—as, for example, in the unitary Wiltshire Council, led by my noble friend Lady Scott, if I may spare her blushes.

The noble Lord, Lord Deben, spoke and expressed concerns about process. My guess is that a letter will better satisfy him, but the start of the process was the independent inspector. The proposal made follows exactly the inspector’s recommendation. The consideration behind the inspector’s recommendation was that a new start was needed, with two new councils. In the inspector’s view, two unitaries best met this aim and the criteria for unitary local government: improving local government; a credible geography with a population substantially in excess of 300,000; and a good deal of support. That penultimate figure perhaps answers the question asked by the noble Lord, Lord Liddle. To clarify, the figure is substantially in excess of 300,000. A unitary county would risk being seen as replicating and rewarding a failing county.

The noble Lord, Lord Liddle, spoke about Cumbria with great passion, for obvious reasons. The position in Cumbria is all about a devolution deal. It is for Cumbria to decide whether it wishes to have a devolution deal; initial discussions are continuing. Major deals have involved a mayoral combined authority. If Cumbria wished to have a mayor deal with a mayoral combined authority, it would point to a simplification of current local government structures: establishing unitary councils. We know that there are different local views about unitary structures for Cumbria. As I am sure the noble Lord will tell me, discussions are continuing. We will want to hear more from the local area in this respect.

The noble Lord made points about the elected mayors. The idea of elected mayors arises in major devolution deals where substantial powers and budgets are devolved over a functional economic area. An elected mayor is seen as providing a strong single point of accountability for the exercise of those powers and for managing those budgets. That elected mayor can be a combined authority mayor if there is more than one authority in the functional economic area, or if that area comprises a single unitary council or an elected mayor of that council.

[Lord Liddle]

I would take that point if the elected mayor had substantial powers and there was a substantial devolution of the budget. As I understand it, in my county—I could be wrong and I am quite happy to be corrected by the noble Lord’s officials—Mr Berry is talking about a devolution deal that might give Cumbria £10 million a year. That is a very small amount of money compared with the county council’s revenue and capital budgets, never mind the other district councils. I think that our net revenue budget is more than £400 million; the districts must have another £80 million. We have a LEP, of course, which is already in place and deals with economic development. I do not quite understand whether the Government are saying that, if there is a reorganisation in areas such as Cumbria, the mayor will replace the LEP. I was against the abolition of regional development agencies—it was a mistake for the coalition to do that—but the emphasis then was put on local enterprise partnerships. Are we now, hardly a decade later, shifting on to mayors as something completely different?