Local Government Finance Bill

Andrew Bridgen Excerpts

Tuesday 10th January 2012 Commons Chamber

[Andrew Bridgen (North West Leicestershire) (Con)]

I welcome this Bill as yet another example of this Government’s commitment to localism, private sector business growth, local democracy and local accountability. For too long, councils have not had sufficient incentive to drive business growth in their boroughs and districts. The proposals will mean that councils that have been unwelcoming to the private sector and job creation, or even those that treat the private sector with antipathy, will be found out. They will be answerable for their actions or for their inaction, and will risk punishment at the ballot box, where they will rightly be held accountable by their electorates.

At this point, I should declare an interest. Nine years ago, I relocated my business. I wanted to grow the business and create more employment in a district which is now the constituency that I represent. The unhelpful nature of the then Labour-controlled local authority meant that the project took eight years—it took eight years to go through planning and construction, and the issue was resolved only when it dropped on Tony Blair’s desk as the worst case of red tape and bureaucracy holding back a small or medium-sized business in Great Britain. Since the eventual relocation, in 2003, the company has created more than 150 new jobs for the district, and has paid just under £3 million in corporation tax and £1 million in business rates. We will never know how much more the company could have done if it had not been so mired in bureaucracy for so long. Happily for residents and businesses in North West Leicestershire, the district council is now Conservative-controlled, and has been since 2007, and only last week I was discussing with the council leadership how the authority will be focusing this year on creating jobs and business opportunities in our district.

If we examine the words of the shadow Secretary of State today, we find that they reveal the real beliefs of the Labour party about business and democracy, and go some way to explaining why Labour is not supporting the measures in the Bill. Interestingly, the Opposition now agree with the need for reform, but that raises the question of why they failed to act for 13 years in government. The facts suggest to me that they ignored the need for reform because of the central command and control that the current system gives the Treasury or, alternatively, they simply did not have a clue what to do—perhaps it was a combination of both. What I would say is that we need to move away from the dependency mindset in local government, which leads to councils investing much of their effort in lobbying central Government for funding by demonstrating deprivation. Instead councils should be investing in local growth, in a system where they can raise more than 80% of their revenues locally, which gives them a tangible stake in supporting local shops and local enterprise. Such an approach is in stark contrast to the command-like structure that the previous Labour Government favoured. The shadow Secretary of State has said:

“The proposals don't sufficiently incentivise councils to get growth going”.

Yet Labour left a legacy of no incentive for local councils to go for growth, and so the stance could be construed as hypocritical.

Another concern that the shadow Secretary of State expressed was that there is no guarantee that some councils will not lose out, and so we get to the nub of real Labour party thinking. I believe that Conservative-led councils will do rather well out of this policy, but that is not because the proposals give an unfair advantage at the beginning. The starting point has been explained, and it is transparent and fair. Councils will have a set baseline and those already above it will pay a tariff to the Government, while those below it will get an individually assessed top-up from the Government. So it is fair to say that all councils will start on a level playing field. I would therefore say that a fear of democracy, transparency and a loss of central control is driving the Labour party’s opposition to this Bill. In a nutshell, the current system encourages councils to take part in a race to the bottom in order to get funding, whereas our proposals will incentivise a race to the top.

I warmly welcome this Bill as another step towards creating the growth we need to deal with both the financial and democratic deficit left by the previous Administration. This Government are proving, yet again, their commitment to devolving decision-making powers to local people and making them both responsible and accountable for their actions.