Growth and Infrastructure Bill

Andrew Gwynne Excerpts

Monday 5th November 2012 Commons Chamber

[Mr Pickles]

I say I will give way for the final time more often than Frank Sinatra said he would be performing for the last time. Therefore, I want to make it clear that, until I have moved off the planning stuff, I will not take any more interventions.

The Bill will make it easier for councils to choose, if they wish, to dispose of surplus land held for planning purposes, thus helping get more brownfield land back into productive use. Councils will also be given more local discretion over when they review the planning conditions for mineral sites, rather than following rigid, centrally-set targets.

The Localism Act 2011 has also given councils more control over local plans to determine where development does, and does not, take place. Some 65% of planning authorities have now published an up-to-date local plan. That is great progress, but the planning system needs to be fair and responsive to applicants and local residents. Alongside tackling the small number of councils whose performance on planning is exceptionally poor, we want to deal with those councils that insist on demanding large amounts of unnecessary paperwork to support planning applications. The Bill will therefore ensure that information requests from councils are genuinely related to planning and proportionate to the scale and nature of the development proposed. The reams of documents demanded have now got out of control. They do not make the planning system more accessible; they achieve quite the reverse. So this practical reform will save everyone time and money.

Planning includes a quasi-judicial process which, of course, puts fairness at its very centre, yet in some cases it is taking far too long for that process to be concluded. Justice delayed is justice denied. Unreasonable delays are unfair to both applicants and local residents because of the uncertainty delays create. The Bill will therefore help speed up planning decisions where councils have a poor record in deciding applications. This will be a help to localised planning, as it will make the worst councils up their game.

The planning system is at times Kafkaesque, with applicants having to wait months, sometimes years, for different pieces of consent from different people. Our proposed change squares with localism. In a quasi-judicial system, there should be minimum standards of due process. That principle is no different from that for the intervention powers that address rare cases of public service failure such as on best value, care homes or education. In the longer term, however, our goal is that no council should find itself in a position where these powers need to be used.

The Bill also contains a series of measures to help local companies grow. We want to help companies introduce a new employment status that gives employees a stake in the company. Employee-owners will benefit from shares in the company worth between £2,000 and £50,000, as well as a different set of UK employment rights than for normal employees. This is particularly aimed at fast-growing small companies and enterprises that will benefit from a flexible work force. We are currently consulting to ensure that appropriate safeguards are in place so people fully understand the consequences of this new type of contract. Only the enemies of aspiration would oppose this modern embrace of co-operative values.

The Bill also provides for tax stability in the business rates system. Business rates are the third biggest outgoing for local firms after rent and staff, but an unpredictable business rate revaluation would be costly to British firms, so this Bill reschedules revaluation to 2017. This will give businesses five years of tax stability and certainty, leaving companies looking to grow and improve the economy free to concentrate on delivering growth. This revaluation comes off the back of Labour’s unsustainable property boom. Rents have been falling, but at any revaluation that would be offset by a soaring multiplier.

There is a popular misconception that postponing the revaluation means delaying falling rate bills. That is not the case. The postponement will be revenue-neutral. It is most important to stop a game of Russian roulette with municipal finances. Initial Valuation Office Agency estimates suggest that the revaluation would see up to 800,000 firms paying more in business rates, with only 300,000 paying less. The decision will avoid local firms and local shops facing unexpected hikes in their business rate bills over the next five years. Places that would be particularly hard hit are small shops, petrol stations and public houses. We cannot know with complete certainty without spending £43 million on a revaluation, but there is a significant risk of the revaluation going very wrong and harming growth. Small and medium-sized firms will be the hardest hit if we do not take action. Without action, there will be massive volatility, which, in itself, could close down businesses and, at the very least, discourage business investment. This reform will provide certainty for business to plan and invest, supporting local economic growth. So these measures complement the local retention of business rates, go hand in hand with the Localism Act’s reforms to small business rate relief and build on the abolition of Labour’s “ports tax”, which threatened to sink Britain’s export trade because of a botched, unfair revaluation.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I share the Secretary of State’s desire to try to use this mechanism to boost our high streets. However, I get a bit lost by his argument, because many small shops in a town centre such as Denton had their business rates set on the basis of their rents before the recession and would benefit from a revaluation on the basis of the current lower rents.

[Mr Pickles]

The hon. Gentleman should not be mocked for not understanding this, because the misconception is a common one. If London values went down enormously, we would have to adjust the multiplier to ensure that the same amount of money was in the system as whole. Initial estimates of the multiplier suggest that a massive increase would be required, so those very places that have seen a drop in rents—a drop in rateable values—could find themselves paying much more through this process. That is the very nature of it. He may recall that when a revaluation took place last time the values had gone up so high that there had to be a small reduction in the multiplier to compensate. Our feeling is that the multiplier would be likely to have to go up considerably, which is why we have taken the unusual decision of trying to do the revaluation against a more stable position.