Business Rates (North-East)
Debate between Alan Campbell and Lord Wharton of Yarm(12 years, 11 months ago)
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Mr Alan Campbell (Tynemouth) (Lab)
It is a pleasure to serve under your chairmanship, Mr Amess. May I begin by commending my hon. Friend the Member for Sunderland Central (Julie Elliott) for securing this important and timely debate? It is a pleasure to follow the hon. Member for Bradford East (Mr Ward)—clearly the north-east has just got bigger—and the hon. Member for Stockton South (James Wharton), who, if I have interpreted his speech correctly, has just taken personal responsibility for the success or failure of Government policy in the north-east.
Mr Campbell
If we are talking about what the hon. Gentleman has not done, he has not shared the information that, of all the councils in the north-east, only Stockton council stands to gain from the proposal—some £4 million.
Whatever argument there is for localising business rates, concern has been expressed on both sides of the Chamber today about the impact that the policy might have on the north-east. We welcome the opportunity to play a constructive part in the consultation and the wider debate.
Why should the north-east have cause for nervousness? I am reminded of the comments of the then Leader of the Opposition, now Prime Minister, on the eve of the general election. He said that when the changes and cuts in public spending are made, it will be the north-east that can expect to be hit hardest out of any region. That is why local authorities in the north-east are united across the parties under the banner of the Association of North East Councils in the information that they are providing to the consultation. I believe that that is also why the wider business community shares those concerns.
I want to address the concerns not from a political point-scoring perspective, but in the context of what the Government say they are trying to achieve for the region. Under this change, my local authority, North Tyneside, stands to lose £19 million, which is half as much again as the level of cuts that are necessary because of local government funding changes. The region as a whole stands to lose a third of a billion pounds. Compare that with an area such as Westminster that generates £1.8 billion in business rates each year. The fundamental question is how local economies in the north-east can compete with areas that have a large business rate tax base and the resources to invest not only in attracting future jobs, but in continuing to provide local services. The Government’s own local growth strategy aims to rebalance the United Kingdom’s economy, but if we are not careful, this proposal will have the opposite effect. London and the south-east are not the only areas that stand to do well. Scotland will continue to have Scottish Enterprise, which will attract businesses and jobs. The north-east is losing its development agency and its regional growth fund is proving ineffective.