Health and Social Care Levy

Clive Betts Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Jesse Norman]

The hon. Lady will be aware that, because of the employment allowance, the bottom 40% of businesses will pay nothing and the next 40% will pay an average of £450. So this does not fall heavily on the bottom end of businesses, and of course it comes in a context in which the Government have provided over £400 billion of support to business and to the nation as a whole in the course of fighting the pandemic. In that sense it is, and it has been recognised to be by reputable independent commentators, a broad-based approach.

From April 2023, once HMRC systems have been updated, a formal legal surcharge of 1.25% will replace the temporary increase in NICs rates, which will return to their previous level. Again, this revenue will be ring-fenced in law for health and for social care only. As the Chancellor stated yesterday, this levy is no stealth tax. That is why the exact amount that each employee pays will also be visible as a separate line on their payslip. Finally, the levy will be administered by HMRC, and collected by the current reporting and collection procedures for NICs—pay-as-you-earn and income tax self-assessment.

[Mr Clive Betts (Sheffield South East) (Lab)]

I want to ask the Minister: how much money is actually going to get to local authorities to deliver social care at the frontline? Can I refer him to paragraph 36 of the Government’s document, which we got yesterday? It says that £5.4 billion in adult social care will be provided from this levy, but that will be spent on the reforms that are in the document. It also says that all the other pressures on social care that local authorities have now, demographic and otherwise, will be paid for from council tax and the social care precept, which is council tax by another name. So are we expecting the pressures on social care to be funded not from this document, but actually from further rises in council tax? Is that the honest situation?

[Jesse Norman]

I am grateful to the hon. Gentleman, and I am also very grateful to him for actually reading the document, which many of his colleagues may not have done, and he is absolutely right to draw attention to that section. What the levy does, of course, is to provide a very substantial form of funding for social care. The question of the capacity of local authorities, which is of course a matter of great interest to Government and an area that we have supported significantly in the last year or two, will be considered in the Budget in the normal course of things.

If I may, I will now set out why a levy based on national insurance is the best way to raise the funds needed for the Government’s plan for health and social care. The first reason is that there is already a clear precedent. Indeed, in 2003 the then Labour Government increased these same NICs rates by 1% specifically to put more funding into the NHS. Within the NICs system there is, as Members across the House will know, already a long-standing ring-fenced proportion of receipts directed to the NHS.

The second reason is that this is a fair method. Businesses will play their part. In fact, the largest 1% of businesses will contribute 70% of the revenue. However, existing NICs reliefs and allowances will also apply to the levy. That will mean, as I have said, that 40% of all businesses will not be affected due to the employment allowance. When it comes to individuals, those earning more will pay more. Conversely, at least 6.2 million people earning less than the NICs primary threshold will not pay the levy at all.

The third reason why a levy based on NICs is the right approach is that it has worked elsewhere. France, Germany and Japan have all increased social security contributions to fund social care provision. Finally, the question of how to fund health and social care is one that applies to a whole nation. NICs are set on a UK-wide basis, and the levy therefore provides a clear UK-wide solution.

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[Rachel Reeves]

I will give way to the Chair of the Select Committee.

[Mr Betts]

I bring my hon. Friend back to paragraph 36, which I asked the Minister about, which seems absolutely key. There is no clear money coming from the levy to social care. That is what the Government said. I think the Minister said it would all be revealed in the spending review. Paragraph 36 states:

“The Government will ensure Local Authorities have access to sustainable funding for core budgets at the Spending Review. We expect demographic and unit cost pressures will be met through Council Tax, social care precept”.

On top of all the other hits that working families are going to get, can they expect an above-inflation rise in their council tax next year to pay for the Government’s failure to fund social care properly?

[Rachel Reeves]

I think many councils and the people who work for them and provide social care at a local level will be incredibly worried about what they are hearing from this Government, which is that council costs are going to go up while they are getting no additional money.

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[Paul Bristow]

We will not approach the backlog unless we have the money and capacity to fund it, and that needs to go hand in hand with what I said about innovation, new pathways and new ways of working. I remember talking to someone who told me that we had three years’ worth of innovation in the NHS in just three months because of the pandemic. New ways of working and new pathways were adopted.

Every time we talk about innovation in our NHS and new pathways—the accelerated access review, the “Innovation Health and Wealth” report and a new life sciences strategy all talk about innovation and new ways of doing things in our NHS. But those new ways of doing things need to be spread at pace and at scale. There is no excuse not to do it now. If it works in one part of the NHS, it will work in another. Culturally, the NHS needs to grasp the nettle and spread that innovation and new ways of doing things so that we can get productivity and outcomes for patients. Now is the time to do it.

[Mr Betts]

The Health and Social Care Committee, of which the hon. Gentleman is a member, estimated last autumn that there was a £3.9 billion funding gap in social care. I assume that he agreed with that report. Can he explain, therefore, how this levy will deliver £3.9 billion a year for social care? I have not seen any figures showing that at all.

[Paul Bristow]

Having no plan will not provide the £3.9 billion, and Labour Members have indicated today that there is no plan.

This is a significant tax increase. I am a Conservative, so I do not like tax increases, but I also understand that an enormous thing happened between the manifesto and now. There has been a global pandemic, and Labour Members seem to have missed that fact. We need to shorten waiting lists, we need to do something about it and we need to correct it.

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[Mr Clive Betts (Sheffield South East) (Lab)]

It is pretty obvious that there has been a major funding crisis in local government over the past 10 years. Local councils have had bigger cuts to their budgets than any other part of the public sector, around 30%.

[Imran Hussain]

My hon. Friend is right to highlight the importance of local government, unlike the Minister, who barely acknowledged its existence. Does he agree that the last decade of ideological austerity and cuts by this Government has meant that local government budgets have been slashed by up to 50%, directly contributing to this crisis?

[Mr Betts]

I have made my position clear on the extent to which local government has been unfairly cut compared with other parts of the public sector.

Across the piece, local councils of all political persuasions have done a brilliant job of protecting their communities over the past few years. They have done it by giving priority to social care, but that has still meant real-terms cuts due to the demographics, with more older people, with people with learning disabilities living longer and with increased costs and demand for children’s social care—demand for the latter two has gone up faster than the demand for elderly care over the past few years.

In protecting social care, there have still been real-terms cuts. There are 1 million more elderly people not getting care who would have received it in the past. Other services, such as parks, libraries, buses and highway safety, have all been cut by up to 50% in local authorities across the country. We are repeatedly asking our constituents to pay increased council tax, often for care services they are not receiving, when the services they do receive are being cut to shreds. That is the reality.

As representatives of both parties in the local government sector said to the Select Committee on Housing, Communities and Local Government, we cannot sort out the funding problems in local government without sorting out the funding problems in social care. That is the reality.

We are in the middle of a Select Committee inquiry, and we will be taking evidence from Ministers. I hope they will start to explain to us how the care plan will solve that problem. The Housing, Communities and Local Government Committee and the Health and Social Care Committee have received estimates that the funding gap for social care alone is between £2.5 billion and £4 billion a year, which does nothing to restore services to the level they should be at or to address the real problems of low pay, which will eventually destroy the service because it will not be able to recruit people as alternative jobs, such as at Amazon, pay so much more. That is simply the reality.

How much money will come from the levy? Paragraph 30 is the only bit that talks about money: £5.5 billion over three years. The gap is between £2.5 billion and £4 billion a year, yet we know the £5.5 billion has to fund: the cap and floor system, which will be at least half of it, maybe more; and the £500 million for workforce training, which is welcome. The money goes nowhere near funding the current gap, let alone bringing about any improvements or bringing people into the social care system who are currently excluded. It just does not do it.

The Government have said they will

“ensure local authorities have access to sustainable funding for core budgets at the spending review”.

All will be revealed in the spending review, but the key bit is that the Government say they expect

“demographic and unit cost pressures”

will be met

“through council tax, social care precept”.

We have had 5% council tax increases year on year, and a lot of it has been to fund social care, so we are going to get above-inflation council tax increases again, are we? If we say national insurance payments are regressive, council tax is now regressive, too. That is the reality.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Mr Betts]

Yes, I will give way, because I think the hon. Gentleman will ask me about the Select Committee’s 2018 report. Am I correct?

[Kevin Hollinrake]

Yes, the hon. Gentleman is absolutely right. As always, he is making some very good points. I thoroughly enjoyed my time with him on the Select Committee.

We did two reports on social care, and we made a recommendation in 2018 to fund social care through the national insurance system. Does the hon. Gentleman still support that recommendation?

[Mr Betts]

Yes. However, may I just say to the hon. Gentleman that it was a slightly different recommendation from what the Government are proposing now? I have our report here, just by chance—I thought I might be asked the question. We talked about the rate at which national insurance would be paid—this was to cover the points that the right hon. Member for Rossendale and Darwen (Jake Berry) made about low-paid areas. We talked about paying right the way up the income scale. We talked about extending it to pensions and unearned income, and about it not being paid for by the under-40s, who have been really badly hit by this pandemic, and we ought to be doing our best to protect them. In paragraph 95, we also made the important point that people should not have to sell their homes to pay for social care and proposed instead

“that a specified additional amount of Inheritance Tax should be levied”.

We all agreed to that. That system is a lot fairer; people would pay according to the value of their home and it would not be that people in constituencies such as the right hon. Gentleman’s, where house prices are relatively low, end up paying a bigger percentage of the value of their home to fund care than people in areas with higher house prices. I stand by that recommendation. It is a different proposal from the one the Government are now putting forward.

I want to come back to the point for the Minister. There is a crisis in social care, and we have all got that; we all have constituents come to us begging for social care. They are really concerned about having to sell their home, but sometimes it is about not being able to get into a care home or get the care at home they need. Most social care should be delivered in the home where people live. The reality is that there simply is not a proposal in this so-called “plan” to give local authorities that money that is needed to both fund the existing gap and to extend social care to the many people who have been denied it because of the cuts in the past few years. Furthermore, the alternatives will be: bigger rises in council tax—the Government have almost signalled that in this report; or further devastating cuts to other services received by most of our constituents, who do not get social care but have to pay for it. This is a recipe for disaster. Eventually, when it works through, everyone will see that there is no plan for social care here, because there is no funding for social care that will deliver the sort of social care system we all want to see.

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[Steve Barclay]

I will come to the points on devolution and happily give way at that stage, but let me just deal with the Opposition amendment, which requests a distributional impact assessment. As we have covered, that has been set out today. The Government have already published a document on the impact of our health and social care plan on households, looking at the impact of the new spending and the levy, with a full distributional analysis being published at the Budget and spending review.

As for the impact on businesses, businesses will play their part in funding this plan. However, existing national insurance contribution reliefs and allowances will also apply to the levy. This means that 40% of all businesses will not be affected due to the employment allowance, and it allows eligible employees to reduce their national insurance liability by up to £4,000. Again, that point was brought out by my right hon. Friend the Member for South West Wiltshire (Dr Murrison), who highlighted the impact on business and the fact that businesses, with 1% of the highest turnover, will cover 70% of the cost.

[Mr Betts]

I think the right hon. Gentleman probably knows which point I am going to raise. I am very interested in the impact on local authorities. Out of the £36 billion that will be raised over three years, how much extra money will go to local authorities after the costs of the “cap and floor” system have been taken into account? How much extra money over three years will go to local authorities out of the £36 billion?

[Steve Barclay]

I listened very closely to the hon. Gentleman’s speech, because he is a very informed and knowledgeable commentator on these issues. He rightly pointed to paragraph 36, where we are being very clear about the role in terms of demographic and unit pressure. As he well knows, part of the discussion at a spending review is to look at local government pressures in the round. That is in the context that local authorities are getting an additional £2.2 billion of funding. I remind the House, in terms of the adult social care flexibility that was allowed for councils this year, that out of the 152 local authorities, less than two thirds actually used that flexibility. That is part of looking at these issues in context.

Let me come to the central point put forward by the Scottish National party, which was very well demolished by my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont). All parts of the United Kingdom need a long-term solution to fund health and social care. The Scottish Government’s independent review of adult social care recently noted—[Interruption.] I am quoting from their own review. I thought they would want to hear that. It stated that

“Scotland’s ageing demography means that more money will need to be spent on adult social care over the long term”—

and its recommendations to the Scottish Government are that this would

“require a long-term and substantial uplift in adult social care funding.”

In fact, in 2002, John Swinney said that a 1% increase was

“progressive taxation…required to invest in the health service in Scotland”.—[Scottish Parliament Official Report, 18 April 2002; c. 8005.]

Spending Review 2020 and OBR Forecast

Clive Betts Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for his comment. He is right—I think the average aid spending of the last Labour Government was 0.36%, so it will be sufficiently ahead of that. As I said, we intend to return to this over time when the fiscal situation allows. He will appreciate better than others the unbelievable uncertainty at the moment, but that is our intention.

[Mr Clive Betts (Sheffield South East) (Lab) [V]]

May I declare an interest in this question, as I suffer from myeloma, a form of blood cancer?

We all recognise and applaud the incredible work that the NHS and its staff have done for us all in the past few months. In terms of the future, does the Chancellor recognise, however, that much research for cancer is funded by charitable donations, which have fallen significantly during recent months for reasons that everyone can understand? To ensure that treatments continue to improve in the future, will he agree to fully fund cancer research to make up the difference in charitable donations, at least for the next few years?

[Rishi Sunak]

I am grateful to the hon. Gentleman for his question. I know that it is a topic on which he speaks passionately. He will be pleased to know more generally about our record spending on R&D next year of just shy of £15 billion; the exact allocation is for the Department for Business, Energy and Industrial Strategy, but there is a significant increase for basic research. Also, within the Department of Health and Social Care Budget settlement, there is about £1.3 billion to fund research for the National Institute for Health Research and Genomics England—both of which do a fantastic job, and I am sure will be working on treatments for us all for many years to come.

Additional Covid-19 Restrictions: Fair Economic Support

Clive Betts Excerpts

Wednesday 21st October 2020 Commons Chamber

[Angela Rayner]

I thank my hon. Friend for his contribution. I will go a little bit further and compliment some of the Tory Members who have stood up as part of Greater Manchester, and I will be incredibly disappointed if what I have seen over the past 24 hours results in this becoming a party political fight. Because in Greater Manchester, despite what the Prime Minister and the Health Secretary were trying to suggest, we were united in trying to support our citizens across the conurbation in doing the right thing, bringing the virus rate down and supporting our economy. I hope we can continue to do that. I hope we do not get distracted by messages that are not in the motion, and I absolutely hope the Prime Minister does the right thing, because this is not just about Greater Manchester—this is coming to a town near you. In so many areas now, the R number is increasing. So many areas are in tier 2; so many areas are going to go into tier 3. This is a marker to ensure that our economy survives through those problems.

[Mr Clive Betts (Sheffield South East) (Lab)]

On that point about coming to a town near you: it is indeed coming to cities and towns in the Sheffield city region, it was announced today. The package of assistance is totally inadequate. It is nothing like what the leaders and the Mayor asked for. It is exactly the same as has been offered to other areas—the standard package. It is not locally negotiated; it is the standard package. As the leader of Rotherham said, “They put lots of civil servants into a room with us to tell us what we couldn’t have.” That is actually what has been happening in the negotiations.

[Angela Rayner]

I thank my hon. Friend for his insight. Many of the local leaders I have heard from have said that it felt like they had been blackmailed and pressurised into taking a deal. Greater Manchester and the Mayor were not just trying arbitrarily to get more than somewhere else. We put a package together based on the needs of our city, our conurbation, our lowest-paid and the businesses that needed the support. It was not a bargaining chip to get this or that; it was about making sure that there was a floor that meant people were given the support that, by the way, this Government promised. They promised that support, and we are just asking them to keep to their promise.

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[Steve Barclay]

I will make a little progress and then of course I will give way.

In taking forward the targeted action plan that the Prime Minister has set out, we recognise that there will be significant local economic impacts, particularly for the areas in tier 3. That is why the Government have set out a package of support, and indeed why, as I say, the Mayors in other areas have worked constructively with it. This package has a number of parts. I heard reference in the shadow Minister’s opening remarks to £8 per head. That is just one component of a much wider package. It may therefore be helpful to take the House through the full suite of funding that is available.

First, local authorities are absolutely critical to the tier 3 restrictions. That is why, in addition to the £3.7 billion of un-ring-fenced grants that were announced earlier this year, the Prime Minister announced a further £1 billion of support, so that is agreed funding for local authorities that will be allocated to them shortly. In addition to that, local authorities in tier 3 will receive a further £8 per head in respect of public health measures specifically linked to enforcement within the outbreak management fund. That goes alongside other measures such as the availability of military support, which sits in addition to the infection control funding that local authorities also have access to—a further £300 million that will support localised test and trace services, specifically within tier 3—and the £1.1 billion to support infection control within the adult social care sector. Before we get on to the discussion around business support or the support for individuals through the job support scheme, it is important not to talk about local authority support just in terms of £8 per head, because that is one component of a much wider package of support that the Prime Minister has announced.

[Mr Betts]

I welcome the support for local testing, tracking and tracing. It should have been done months ago: that is the reality of the situation. As regards local negotiations—I put this to the Health Secretary last night and he did not deny it—there are not negotiations; there is a financial package that the Government have decided on that has been offered to all areas that have been put up to tier 3 status. It is a case of saying, “Take it or leave it: there’s no extra money going to be negotiated.” That is exactly what leaders in South Yorkshire have said it is: lots of civil servants in a room telling us what we cannot have. These have been the discussions, not negotiations, that have been happening in South Yorkshire in the past few days.

[Steve Barclay]

There has been a framework that we have used to shape our discussions. However, is this not what the Opposition motion, in essence, is calling for—a nationalised approach? In fact, we just heard an Opposition Member calling for the exact opposite in saying that the Mayor of Manchester had a case that was supposedly better than that of the Mayors in Liverpool or South Yorkshire, so the Mayor of Manchester should be treated a preferential way to constituents elsewhere in the north-west. Yet the hon. Gentleman, who I know comes at this very constructively—I recognise that that has always been his approach in the House—says something different. There seems to be confusion among Opposition Members. Do they want a national approach or do they want the Mayor of Manchester to be able to negotiate something allegedly on behalf of Great Britain? I do not think that was his electoral mandate.

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[Mr Clive Betts (Sheffield South East) (Lab)]

As I have already said, I welcome the extra money for track and trace; that should have happened a long time ago. Directors of public health are the professionals—not Serco—and if we had given them the responsibility a long time ago, virus infection levels would not be as high as they are today.

Let us be clear: there have not been local negotiations; there have been discussions with local leaders about how much the Government are going to give them from a standard package, which is the same in every area. The Government have not denied that that is what has happened; it is the reality. If the standard package was sufficient to provide the help that businesses and local people need, I would welcome it wholeheartedly, but it is not.

Many businesses that are partly affected—such as the breweries mentioned by the hon. Member for Thirsk and Malton (Kevin Hollinrake) and the coach companies mentioned by my hon. Friend the Member for Halton (Derek Twigg)—are not going to get help at all. They are going to struggle and they may have to close. If they close but are not forced to close by Government diktat, then of course help would not be forthcoming. People who are made unemployed will not get the same help that they did under the furlough scheme. How can they manage? It is a simple question, and the answer, of course, is that they cannot manage.

We know that the number of people going into isolation who should be isolating is not nearly sufficient, and the reason is that many families simply cannot afford two weeks without any income. For heaven’s sake, extend the scheme beyond the £500 for the poorest families to those who are on average or below average incomes to encourage them to isolate when necessary, knowing that they do not have to make a choice between putting food on their family’s table and paying their rent, and going into isolation. No family should have to make that choice.

Let me turn to the travel restrictions. What we have been told this morning about going into tier 3 is that my constituents cannot go on holiday in the United Kingdom. But they can go on holiday abroad to any country that will have them. What does that say about helping the UK tourism industry? It is exactly the opposite of what Government were saying to people only a few weeks ago: “Go on holiday in the UK, not abroad.” Can the Financial Secretary to the Treasury, the right hon. Member for Hereford and South Herefordshire (Jesse Norman) confirm whether that is the case? The Health Minister this morning confirmed that it was.

Can the Minister also explain what will happen to a constituent of mine who emailed me? They said, “I am already on holiday in the UK. Do I have to come back, because I am not supposed to stay in another part of the United Kingdom once the tier 3 restrictions come in?” Nobody could give me any guidance this morning. This plan is half-baked and half thought-through. Other constituents of mine can walk to the pub in north-east Derbyshire, which will be in tier 2. The pubs will be open there and my constituents can go for a drink in them. They cannot go for a drink in my constituency, without a substantial meal. The Government are giving advice, but they are not actually enforcing it. What is going to happen in such cases?

The most stupid thing of all—I know that the Minister will not have an answer to this because nobody could give me an answer on the Zoom call this morning; they tried to, but it was a piece of nonsense—is that in my constituency during the last lockdown, people got great enjoyment from walking in the Moss valley, where the footpaths run between Sheffield and Derbyshire. When people walk on those footpaths, they walk between a tier 3 area and a tier 2 area, but the Government advice says that they are not supposed to leave a tier 3 area. I asked this morning whether people should stop at the boundary on those footpaths, and then turn around and come back. It is an unmarked boundary, so people would have to look at an Ordnance Survey map to find its location. I was told that that is the Government guidance now—that is, if someone is walking on a rural footpath, with no chance of giving covid to anyone, they should stop at that imaginary boundary, turn around and come back. I am sorry, but it is that sort of stupid, simplistic advice that brings the whole system into disrepute.

Finally, will the Government please tell people the measures by which tier 3 will end? No one has told us yet.

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[The Financial Secretary to the Treasury (Jesse Norman)]

We have had a lively, passionate and—what should I say?—vigorous debate across the House. We have heard a wide range of arguments and a considerable amount of passion. It is clear, however, that when we cut through the air being discharged on either side of the Chamber, there is a commonality of values across the House. In fact, the House is united on the most fundamental issues that we face, which are the need to combat this terrible covid-19 virus; the need to protect public health; the need to make every effort to prevent economic harm to our businesses, jobs and people; and the need to protect the fabric of our society. We all share those ambitions.

To do that, we need to do achieve a balance, as the Chancellor discussed last week. In the words of the deputy chief medical officer last night, we are trying to walk “a very fine line” between getting the virus under control in areas where it is surging and incurring minimal damage to the daily lives and livelihoods of people across the country. It was noticeable that the deputy chief medical officer also made it explicit that he did not support a national lockdown, that he backed a local approach and that it would not be appropriate to impose the strictest restrictions across the country. I thought that was an important and telling point from an independent adviser.

For the same reasons, it is clear that no Government, in any normal circumstances, would wish to impose the restrictions that we are discussing today. I can only express my thanks and recognition to the people of Liverpool, Lancashire, Greater Manchester and South Yorkshire for the fortitude that they have demonstrated, are demonstrating and will demonstrate.

The evidence shows that the most successful countries in combating covid-19 are those that have adopted localised measures to protect their populations. That is why we launched the three covid alert levels for England based on the prevalence of the virus in those areas. Although it is vital that we take decisive action to control the virus where it is surging, as we did yesterday in Manchester, we must also recognise that covid-19 is spreading in different ways and at different speeds across the country.

Covid-19 is a virus that we do not fully understand in epidemiological terms, or indeed in medical terms, but we know enough to say that the epidemiological evidence simply does not justify introducing a national circuit breaker. The costs of such an approach would be absolutely huge.

I vigorously support the point made by my hon. Friend the Member for Clwyd South (Simon Baynes), who said that there were weaknesses in the Welsh Government’s decision to impose a circuit breaker because it would put tremendous strain on areas where there had been no great upsurge in the virus. That point was also made by the former Secretary of State for Wales, my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns). It falls in fact into the category of being unnecessarily damaging to the economic fabric of our country.

The idea that the Welsh Government have done that, as my hon. Friend the Member for Clwyd South put it, without adequate scrutiny, is a sharp contrast to here where the Opposition have been vigorous in holding the Government to account, and rightly so. Having said that, it is important to say, as my right hon. Friend the Chancellor said last week, that these are not virtual costs: every day that a national lockdown was in place would bring very real costs in jobs lost, businesses closed and children’s education harmed. The costs can be measured and weighed in permanent damage to the economy, which in turn undermines our ability to fund our public services.

Let me briefly remind the House of what we are doing to support, in a broad, deep and consistent way, areas that face higher restrictions. We are helping businesses with fixed costs such as rents and bills through a new business grant scheme. We are supporting local authorities in tier 2 or 3 with significant new funding. We have introduced a national funding formula of £1 per head in tier 1 areas with a high incidence, going up to £3 and £8. Of course, that is just a covid-outbreak-combat measure —it is dedicated to a small part of a much wider pattern of programmes of support totalling, as the House will know, more than £200 billion in total. To give the House a sense of scale, that means that areas in high or very high alert are receiving, or will receive, up to half a billion pounds just focused on public health activities to do with combating the virus, such as local enforcement and contact tracing. That comes on top of the £6 billion that we have already provided to local authorities since the start of the crisis.

The third element is extra support for local authorities in tier 3—

[Mr Betts]

Will the Minister give way?

[Jesse Norman]

I would but I have been given so little time and have so much material to get through. I hope the hon. Gentleman does not mind if I press on.

As the House will know, we have provided one-off grants to Lancashire and Liverpool and will continue to do so for other authorities. Finally, we are expanding the job support scheme: businesses that have been legally required to close, whether in tier 3 areas or elsewhere, will be able to claim a direct wage subsidy.

Let me say a couple of things on the issue more widely before I finish. The hon. Member for Oxford East (Anneliese Dodds) quite rightly said at the outset of this pandemic that it would be, in her words, “completely inappropriate” to engage in party politics on these desperately important issues of human life and human wellbeing. The hon. Member for Ashton-under-Lyne (Angela Rayner) said that we should not be having “political games”. I am afraid that an awful lot of what we have seen in the past 48 hours has been political games and party politics. It is a terrible, terrible shame.

Love Manchester though I do, I am afraid there is no reason why it should be treated as a special case and any differently from any other part of the country. Every country faces the potential of being struck down by covid and every part of this country should be supported in a proper way that is consistent across the piece. When the Mayor of Birmingham says, by contrast, that he will not put lives at risk, we have to recognise the sincerity and importance of his view.

Let me pick up a couple of other points that have been made. The hon. Member for Salford and Eccles (Rebecca Long Bailey) spoke of Abraham Lincoln; she may also remember that Lincoln said that the gentleman he spoke of compressed the smallest amount of thought into the largest number of words. I am afraid we have seen a bit of that today.

The hon. Member for Birmingham, Ladywood (Shabana Mahmood) called for rationality and a truly national strategy; that is exactly what we are offering. That is what the Government are giving to her.

My hon. Friend the Member for Warrington South (Andy Carter) was absolutely right to highlight the danger of theatrics and the importance of our not making this a north-south issue. It is absolutely not that. This is an issue in respect of which we are all desperately concerned to do the same thing: to protect people’s livelihoods, to protect their health and to protect the fabric of our economy and our society. What is the Labour alternative? A national firebreak? A circuit break? We should do everything that we possibly can to avoid that because of the unfairness of striking down areas that do not have high virus levels and suppressing their businesses. We all recognise the economic costs associated with that.

I do not think it is consistent with the Labour party’s commitment to avoid party politics to have descriptions from the Opposition Benches of, in one phrase, “screwing people over” heard in this Chamber, or, indeed, to hear references to a Member of this Chamber as scum from the Labour Front Bench.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

Areas with Additional Public Health Restrictions: Economic Support

Clive Betts Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

I am very happy to reassure my hon. Friend that the package of support that the Chancellor set out in his winter plan will assist businesses in Stoke and elsewhere, bringing back jobs that are viable and supporting them in terms of their cash flow. Furlough has already seen more than half the jobs—from a peak of 8.9 million—come back, so it has served a key part of its purpose. I know that my hon. Friend is also a keen champion of the wider levelling up agenda, so as those businesses bounce back, it will also be important that we work together on that agenda, which I know areas such as Stoke should benefit from very strongly.

[Mr Clive Betts (Sheffield South East) (Lab)]

In the leisure and entertainment industry in my constituency, Cineworld shut its cinema, Hollywood Bowl has written to me about the problems that it has, wanting a further cut in VAT because of the impact of additional restrictions, Peller Agency has had virtually no work for any of its artists in live entertainment venues since March, and Central Travel and Linburg Travel were offered no help by the Government at all because, perversely, coach companies are not seen as part of the leisure industry. Those are effects on the constituency without additional restrictions; it can only get worse if additional restrictions come into play. Will the Government introduce a comprehensive range of measures to help the leisure and entertainment industry? Ultimately, if measures are not brought in, such products and offerings will not be available for all of us to enjoy once the restrictions are lifted.

[Steve Barclay]

I gently take issue with the point about coaches not having support. One of the areas where coach firms have been able to benefit hugely from our response, and to work with the Government, has been in school transport. We were able to secure the additional capacity that we needed in part through the willingness of coach companies to adapt as part of our response. It is not the case that coach companies have been unable to get any business during the pandemic.

On more comprehensive measures, the hon. Member is right that the cinema industry has been hit hard. We were all concerned to see the announcement from Cineworld at the weekend. Together with Odeon and Vue that is 75% of the market, but as he knows it is not simply down to one issue. With cinemas, there is the supply of films—the delay of some of the blockbuster films has had an impact—and consumer confidence. Attendance is significantly down compared with last year, and there is also the impact of the non-pharmaceutical interventions. There is not one single factor, but we continue to work with the cinema industry in shaping our response.

Discrimination in Football

Clive Betts Excerpts

Thursday 11th April 2019 Commons Chamber

[Mims Davies]

I think the two go together. We can tackle the ills in wider society by rooting out the use of football as a cloak for bad behaviour in wider society. We must not use football and sport as a way to have intolerance. We don’t want it—get rid of it.

[Mr Clive Betts (Sheffield South East) (Lab)]

Does the Minister agree that racism does not merely exist in football grounds; it also exists in the boardroom? Some 30% of players are black and minority ethnic, but less than 5% of managers are. What will she do to require the football authorities to address this issue?

[Mims Davies]

The hon. Gentleman makes an important point. At the racism summit I held, there were people outside football holding football to account for not being diverse and welcoming enough. They know the problem. It is time to change who is at the top, because that changes everything.

Flybmi

Clive Betts Excerpts

Monday 18th February 2019 Commons Chamber

[Ms Ghani]

It is good that my hon. Friend notes the importance of Derry City and Strabane District Council’s role in procuring and maintaining the contract, and it is interesting to note the council’s positivity about other airlines taking on the route. I noted over the weekend that Ryanair was offering flights for less than £10 for those who wished to travel from Belfast, although that means making another journey. We are obviously committed to supporting our regional airports, to holding the CAA to account so that it monitors what airlines are doing when they are struggling and to examining what we can do to help passengers to continue their journeys across the UK.

[Mr Clive Betts (Sheffield South East) (Lab)]

It is quite frankly astonishing that the Minister did not mention Brexit in her initial comments, because the company certainly did. Flybmi said that uncertainty around Brexit and the possible costs of needing both UK and EU licences in the event of a no-deal Brexit were factors in its decision to go out of business. Will the Minister now make it clear whether all airlines should be planning for a no-deal scenario and looking at how to get dual licences?

[Ms Ghani]

The EU has been very clear that the UK aviation industry can continue as it is. We have been having good conversations with the EU on this, and we have tabled a number of statutory instruments and regulations to make sure we can continue flying. I just do not buy the argument that planes will not fly.

[Mr Betts]

These won’t fly anymore.

[Ms Ghani]

No, but Flybmi’s accounts show that, as far back as 2014, it was not as healthy as it could have been. If a company undertakes flights that are barely at 50% capacity, it is making a loss. To make an assumption that it is all down to Brexit just does not wash.

Grassroots Football Funding: Wembley Stadium

Clive Betts Excerpts

Tuesday 22nd January 2019 Westminster Hall

[Justin Madders]

My hon. Friend is right. As the shadow Sports Minister, she will know far more about the challenges than I do. When we compare our facilities with other countries, we are lagging behind. We have half the number of third generation pitches that Germany has and, shockingly, only one in three grass pitches are of adequate quality. Some 5 million playing opportunities were lost last year because of inadequate facilities. With the NHS struggling, schools facing a funding crisis, and the challenge of affordable housing, it is fair to say that we cannot expect the taxpayer to find the resources for this. However, as my hon. Friend said, there are huge opportunities for the grassroots in terms of the cash that is washing around the game.

[Mr Clive Betts (Sheffield South East) (Lab)]

There are some really good examples. The Sheffield junior football league is the largest junior football league in Europe. The Isobel Bowler Sports Ground in my constituency is part of the Parklife project, funded by the FA and the Football Foundation. It has a great artificial pitch and a wonderful gym, where Disability Awareness with Sport runs facilities for disabled people. That is all wonderful and very positive—as is Mosborough rugby football club, where the Rugby Football Union has come in with support—but let us contrast the £300 million that local authorities spend on pitches in parks with the more than £200 million that the premier league’s clubs spent on agents’ fees alone in the last financial year. Is that not a contrast that we simply should not accept?

[Justin Madders]

I thank my hon. Friend for his contribution and for his excellent work with the parliamentary football club and with the Football Foundation. He is absolutely right about the cost: £200 million on agents’ fees, more than £1 billion in transfer fees every year now, and the direction of travel is only upwards. I know a levy operates at the moment on transfer fees, but a significant amount of that goes to players’ pensions and academies. There is nothing wrong with that, but that is for the professional side of the game and we are talking about the grassroots. I believe a small levy or a redistribution of existing funds could do an awful lot more for grassroots football.

European Union (Withdrawal) Act

Clive Betts Excerpts

Thursday 6th December 2018 Commons Chamber

[The Chancellor of the Exchequer (Mr Philip Hammond)]

Thank you, Mr Speaker. I welcome the opportunity to take part in this debate today and to make the case to the House for backing the Prime Minister’s Brexit deal, ensuring a smooth and orderly departure from the European Union, delivering on the referendum decision of the British people and, at the same time, securing a close economic and security partnership with our nearest neighbours and most important trading partners. I will also make the case for rejecting the calls from those who would prefer to plunge the country into the uncertainty and economic self-harm of no deal and from those who would seek to undo the referendum decision and, in doing so, fuel a narrative of betrayal that would undermine the broad consent on which our democratic politics is based.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Chancellor said recently that backing the Prime Minister’s deal would be better for the country than remaining in the EU. However, during the referendum campaign in February 2016, he said that a yes vote would lead to “very significant uncertainty” and would have a “chilling effect” on the economy. What information can the Chancellor share with the House that has caused him to have such a fundamental change of opinion?

[Mr Hammond]

I have always recognised that leaving the EU will have an economic cost, but the deal that the Prime Minister has negotiated minimises that cost. Our nation is divided on the issue, and I fundamentally believe that we have to bring the country back together in order to succeed in the future. This deal offers a sensible compromise that protects our economy but delivers on the decision of the British people in the referendum. My judgment is that, if we want to maximise the chances of our nation being successful in the future, this is the right way to go.

--- Later in debate ---

[John McDonnell]

I think the hon. Gentleman has already intervened twice. That is absolute generosity. I will press on, because I know that many other Members wish to speak.

The Government need to recognise what motivated the Brexit vote. Over time, industries that sustained whole communities around the country have been destroyed or allowed to wither, tearing the heart out of our towns, from fishing ports to mining and manufacturing communities. This week’s report from the Joseph Rowntree Foundation should be a wake-up call to us all. It confirmed that 1.5 million people are living not just in poverty, but in destitution, including 365,000 children. If we are to learn anything from the referendum vote, it is that so many of our people want change, and the decision on Brexit is fundamentally a choice about the kind of country we want to live in.

[Mr Betts]

Does my right hon. Friend agree that, whatever deal we come up with and wherever we move to on Brexit, we need to recognise those left-behind communities and what drove many people to vote leave, and we therefore need a major package of economic and social reconstruction in those areas, to support them?

[John McDonnell]

We need a major package, but one of the key criteria of that package is that it has to go beyond London and the south-east. It has to ensure that we invest in our regions, coastal towns and small towns—not just the cities. It has to bring everyone with us, as the result of a prosperous economy where prosperity is shared by everybody.

Labour has set out our stall. We stand for change, for an economy that works collaboratively and closely alongside our European partners, for an economy that invests in all the regions and nations of the UK, and for higher wages, driven by investment in skills and greater trade union rights. That is what our proposal embodies. I firmly hope that Members will agree to reject the prospect of no deal. Let us accept that the Prime Minister’s deal will not protect our economy and has to be rejected. Let us work together to secure the long-term interests and future prosperity of our country and our constituents.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

In the referendum, Sheffield voted 51% to 49% to leave. My constituency voted two to one to leave. Like the country, the city was split, with the more affluent western parts voting to remain and the poorer eastern part voting to leave. Whatever happens with this deal and the vote on it, we have to understand the reasons that led many of the poorest parts of the country to vote to leave. People feel left behind, disadvantaged, and that the burden of austerity has been placed on them unduly. That is the truth of the matter, and we have to recognise that. As I said to the shadow Chancellor, my right hon. Friend the Member for Hayes and Harlington (John McDonnell)—and I think he agreed—we need a major programme of economic and social reconstruction to help these areas.

We also need to understand the issue of migration, which affected many people in these areas. It is not good enough simply to dismiss the concerns and fears that people had as racism. We should recognise that migration from eastern Europe had real impacts on communities, which got very little help to deal with it—in fact, they got no help at all from the Government. We also have to recognise the feeling that people come over here and claim benefits, having paid nothing into the system. We did not use the 90-day rule in the way that countries such as Belgium did to prevent that from happening. It could have removed many of the concerns, or more appropriately dealt with them.

I think back to Sheffield in the 1970s and 1980s, when we lost 45,000 jobs in steel and engineering in the Don valley alone. Now, with the advanced manufacturing research centre, we have Rolls-Royce coming in, and Boeing and McLaren, and, building on the companies that are left, such as Forgemasters and Outokumpu, we have created new, high-tech, advanced jobs. I will not vote for any deal that puts those at risk. That is the fundamental issue for me to consider in deciding whether to vote for this or any other deal.

Some 56% of Sheffield exports go to the EU. That is higher than the national average. I have had a lot of advice, as I am sure all hon. Members have, from constituents telling me how to vote. Interestingly, very few people have written to me saying, “Vote for this deal.” The Prime Minister has managed to unite leavers and remainers against her deal. I have, however, had one letter, from Tinsley Bridge, an important exporter in my constituency, saying, “Please vote for the deal,” not because it thinks it is a particularly good deal, but because it worries that the alternative is no deal, which would put its just-in-time business at risk. I say to Tinsley Bridge and other businesses that we are not going to leave with no deal; that is not a good reason for voting for the bad deal that the Government are putting forward.

In the end, businesses are concerned about uncertainty, and the Government’s deal is all about uncertainty. It perpetuates uncertainty. Everything is postponed until 2020, at the earliest, and almost certainly until later, and the chances of getting a good deal then will be lessened because we will have given away all our bargaining power. The EU can keep us in the backstop until it chooses to let us go. We will have no bargaining power whatsoever. According to an article in the Financial Times, the path to an independent trade policy

“is one of the most ambiguous and contradictory parts of the political declaration.”

This is an uncertain deal, an unclear deal and a contradictory deal. I cannot vote for no deal, because that is the greatest risk to jobs in my constituency, but I cannot vote for an inadequate deal either. I want a deal that keeps us in a customs union and closely tied to the single market. If we cannot get a deal that protects jobs in my constituency and preserves living standards, environmental protections, health and safety protections and workers right—or rather if we cannot get a change of Government to secure that deal, since no one can trust this Government any more to secure a deal in the interests of the British people—I will, at that point, be prepared to consider voting for a second referendum, so that the British people, knowing clearly what they are voting for, can choose between clear-cut options. If we have to do that, it should be seen as an enhancement of the democratic process, not a negation of it.

--- Later in debate ---

[Jim McMahon]

rose—

[Mr Betts]

rose—

[Dr Fox]

I will not give way again.

My hon. Friend the Member for Gloucester (Richard Graham) was clear that we must beware of some of the siren voices on other alternatives, particularly the EEA/EFTA option. We would pay highly for such an option. We would have to negotiate membership from outside the EU. The EU members as well as the EFTA members would all have to agree such a membership. We would have full regulatory alignment inside the single market and have less freedom on future trade agreements than we have under the agreement being put forward by the Government. We would be hamstrung by rules on our financial services—not even able to set the rules in our own City—and we would have full freedom of movement applied to us. It could not be further from what the public voted for in the referendum.

[Stephen Kinnock]

rose—

[Mr Betts]

rose—

[Gareth Snell]

rose—

Mental Health: Absence from Work

Clive Betts Excerpts

Wednesday 17th October 2018 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to be called to speak, Mr Betts.

I congratulate the hon. Member for North Warwickshire (Craig Tracey) on securing the debate. His introduction was excellent. The subject is important and topical, and one that I am aware of primarily through my constituents, as will be the case for others who participate in the debate. I hope that the Minister will give us some answers.

Recently, I read an interesting article in the Safety and Health Practitioner about this very issue. The crux of the matter is clear: with great respect, we are doing a disservice to those suffering from mental health issues if we make no changes. That is why this debate in Westminster Hall is important, even though many other things are happening in the House at the same time.

We are all aware of the massive impact that mental health issues have on our physical wellbeing, our mental acumen and our ability to cope with work relationships, home life and, simply, life in general. As an elected representative, I am into my 34th year, whether as a councillor, an Assembly Member or, now, an MP. Over all those years I have been very aware of those with mental health issues such as depression and anxiety, and the impact that all that has on their life, work, income and whole lifestyle. The issue is so important.

The article is worth reading—it would be time well spent—but I do not have the time to repeat it verbatim in full:

“In the workplace, mental health issues can have a serious impact on both the morale of employees, those suffering from mental health issues and their colleagues who then pick up the additional workload.”

If an individual is under pressure to work but is not able to cope and is doing less, who knows who else will have to do more? That is one of the reasons why I want to highlight the issue.

The article goes on:

“It can also impact an organisation’s productivity and profitability through overtime costs, recruitment of temporary or permanent cover—absence from work due to mental health issues is thought to cost the UK economy £26 billion per annum.”

That assesses the magnitude of the issue financially, but it only tells a small part of the story. Each one of us, as elected representatives, will have individual cases with which to illustrate matters. Furthermore:

“Mental health issues can appear as the result of experiences in both our personal and working lives.”

Sometimes people’s personal life spills over into their working life, and sometimes their working life spills over into their private life. The person who is always happy and jolly in the workplace might not be a happy or jolly person when he or she gets home.

The Health and Safety Executive’s draft health and work strategy for work-related stress identifies that 1.5% of the working population suffers from mental health issues, a figure that resulted in 11.7 million lost working days in 2015-16. That is another indication of how, if we improve the health ability of our workforce, we can save working days and thereby turn around the profitability of a company. Compare that figure with self-reported injuries: 4.9 million working days lost—the scale of workplace mental ill health is almost two and a half times the physical impact of unsafe workplaces and working practices. Clearly, something needs to be done. Perhaps the job of the Minister and his Department is to lead the way. Furthermore, it is suspected that at least a third of injuries go unreported, and the same is likely to be true for work-related stress.

The initiative “Mates in Mind” has identified that the suicide rate in the construction industry could be 10 times more than the rate for construction fatalities. If that estimation is true, we have a massive problem that needs to be addressed. I am pleased that the Government created a suicide prevention Minister—that is a direction we need to be moving in. That Minister is not present, but perhaps the Minister responding to this debate will also comment on that initiative.

In 2011, the then coalition Government developed “No Health Without Mental Health”, a cross-Government mental health outcomes strategy for people of all ages. It was a great idea, but it has not stopped the rise in the numbers of those with mental health issues. The document states how the Government want people to recognise mental health in the same way as they view physical and biological health.

The strategy also set out the aspiration of improved services for people with mental health issues. However, only an extra £15 million is expected to be pledged for creating places of safety and, with respect to the Minister, that amounts to only about £23,000 per parliamentary constituency. That is not a terrible lot per constituency—mine has a population of 79,000; I am not sure about the Minister’s constituency, but the average one has about 70,000, 75,000 or 80,000. If that is the case, that is about £3 per person, which does not really go anywhere towards addressing the issue.

According to the Centre for Mental Health, the financial cost to British business of mental ill health is an estimated £26 billion per annum, but positive steps to improve the management of mental health in the workplace can enable employers to save at least 30% of the cost of lost production and staff turnover. We are looking not only for the Government to do something but for companies to. It is important for companies to accept their responsibility—clearly, if they cut down on days lost to mental stress by making some changes, they thereby help themselves. If they can indeed save at least 30% of the cost of lost production and staff turnover, I say gently that it is an open-door policy and one that should be adopted right away.

One in four people will experience a mental health problem in any year. A common misconception is that mental health problems are only caused by issues at home—no, they are not—so some employers feel that it is not appropriate, or their responsibility, to intervene and provide support to employees. More commonly, the cause of an employee’s mental health problems is a combination of issues relating to both work and private lives.

To conclude, what I have sought today is not only to show in a small way support for the hon. Member for North Warwickshire but to seek Government intervention and help, and to raise company awareness. Companies have a clear role to play and one that they cannot ignore or not take responsibility for. I believe that the hon. Gentleman intended to demonstrate in his introduction to the debate that it is more cost-effective to take small steps to promote good mental health in the workplace, rather than having members of staff feeling like they cannot cope and going on the sick. We want to prevent that if possible.

I believe that enforced lunch breaks away from desks are an essential component, for example. It is all too easy for people to stay at their desks—my staff do it all the time. I was thinking about this before the debate: sometimes we ought to say to our staff, “Girls, go on down to the wee café there and take half an hour, 45 minutes or an hour, whatever it may be, away from the office”, because if they stay to eat their lunch, they also answer the phone. If someone comes in, they speak to them. I am not saying that they should not do that, but I am saying that the two—work and breaks—need to be divorced from each other.

I do not have all the answers but I do believe that we must do more—not because that is good for business, but for the sake of our one in four who are struggling with their mental health and who simply need help.

[Mr Clive Betts (in the Chair)]

We are going to have a Division imminently, so it is sensible to suspend the sitting now for 15 minutes. We can go to vote and then come back to resume the debate.

Business Rates

Clive Betts Excerpts

Wednesday 13th June 2018 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for York Central (Rachael Maskell) on securing this important debate about the relevance of business rates to our local communities, and the impact that they may be having on them.

I may approach the debate slightly differently, from a local government perspective, because I have the privilege of chairing the Housing, Communities and Local Government Committee, which has looked recently at business rate retention. The Committee will also look at the future of the high street in an inquiry for which we are taking evidence.

First, I am pleased that the motion moved by my hon. Friend is about a “review” of the business rates system. I think that is important. I wish to begin by saying that I hope we end up with a review rather than a complete abolition of the system. I am sure that the Treasury will be the first to say that abolishing taxes and starting again has slight dangers attached to it, in terms of a complete dislocation. Reorganisations on that sort of scale rarely go well.

I would also argue that property tax is quite important. We tax many things in this country. Nobody particularly likes taxes, but taxing property in some way is quite an important element of our overall taxation system. Of course, households pay a property tax—through council tax at one time. Some of us have been around in various forms of representative government long enough to remember when we had a rating system that covered both domestic and non-domestic properties. The change was made when the poll tax was brought in, and business rates were effectively nationalised and council tax came in instead.

Secondly, we have to make it clear that business rates are an important source of local income for councils. Councils have a Government grant, council tax and business rates—that is basically it. They can raise certain charges, but those are their meaningful sources of money. I would strongly argue, and the Committee has, that over time we should find more ways for councils to raise money at a local level, so that local people can see accountability and the direction between the money they pay and the services that they get. However, that wider discussion is for another day.

The issue is becoming more important because in 2020 the Government intend to move to 75% business rate retention from the current 50%. Some pilots are doing 100% around the country. Increasingly, it is not about merely the totality of business rates, and what is raised in a local area is extremely important for that council. The Finance Bill before the election was going to move to 100% business rate retention. I am disappointed that we have stopped at 75%. The Government say that they will look in the future to moving to 100%, but that makes it even more important that we do not just tear it up and start again.

[Matt Rodda (Reading East) (Lab)]

I urge my hon. Friend and colleagues to consider the importance of continuing the pilots for retaining 100% of business rates, which many local authorities in the pilots find very effective. The Berkshire unitaries all have a one-year 100% retention, and they very much wish to continue that. If the Minister considered that, I am sure it would be greatly appreciated in our county.

[Mr Betts]

That was a very helpful intervention. It shows that some very interesting things are going on at a local level. Very often, ideas begin in local government, are tried and tested at a local level, and then are moved on to the whole country. It is very important that we do not simply say that now we want to move away from the whole system, and leave those valuable lessons unlearned and unapplied.

The other point is that there is the capability for even more local control of business rates. In the days when we had domestic and non-domestic rates, councillors set the rates. They were nationalised when the poll tax came in and the control for setting the rate in the pound was moved to national level. That is an argument that we have had on the Select Committee. I would like to move towards more local control eventually and the system is at least capable of doing that. Business rates are also easy to collect and difficult to avoid, and we should see that as quite a strong benefit of the system.

The right hon. Member for East Devon (Sir Hugo Swire) raised some very pertinent concerns about the impact on high streets, which we see whether it is a village, a small town or a major city. We see derelict shops and the change that is happening. The Select Committee is therefore taking evidence in an inquiry on what high streets are going to look like in 2030. We are trying to look ahead to see what change is happening and whether people are planning for it.

A good point was made about the planning system. We ran an inquiry a few years ago on the high street, and it was stark then that very few councils seemed to be adapting their local plans in recognition of the change in shopping habits. Everyone can see it happening, but nobody seemed to be recognising it when they were looking at what town and city centres would be used for in the future. That will be an issue to address.

I know business rates are an issue for some small retailers, and I will come on to a couple of points we ought to address, but I suspect that that is sometimes an excuse when the real issue is the change in shopping habits. People are just changing what they do. Whatever shopping centre it is, people are simply choosing not to go there, or, as has already quite rightly been said, they go to have a look and then buy online. About 30% of retail shopping is now done online. There cannot be that degree of change without an impact on the retail floor space needed. All the signs are that that is going to continue, and I am sure it is one of the issues we will address in our inquiry.

We are also going to look at some of the things being done by retailers and the property owners, such as the company voluntary agreements that are coming out now as retailers try to negotiate their leases effectively, with a bit of pressure. The retailers did sign up to those leases and there are reasons why they did, sometimes on a long-term basis. We are going to have a look at the issues there as well.

We will also look at revaluations, but we have to remember that revaluation is a zero-sum game: it simply changes who pays what and does not actually raise more money. I am not saying that some centres and high streets are not disadvantaged, but somebody somewhere is probably gaining in the system, which is something that we have to think about.

Two points that we have to look at were powerfully raised by my hon. Friend the Member for York Central. In terms of retailing, the change in shopping habits is to businesses that by and large pay very little in business rates. That is absolutely fundamental if we are going to review the system. How do we get from a system that is a bit archaic and a bit stuck in a particular rut, to a situation where we can charge more for those big online retailers, and indeed the out-of-town shopping centres that were mentioned? Why do they pay relatively so little in rates, compared with the often smaller shops on the high street?

[Ruth George]

My hon. Friend is making some excellent points. Does he agree that we need to make sure that we incentivise British businesses that trade in this country and make sure that they cannot be undercut, whether on the high street or online, by companies that are directly importing and often avoiding customs and other charges by doing so?

[Mr Betts]

It is important that we look at those issues in wider taxation. I am not sure we can quite go there this morning, but we certainly need to look at whether we can tax some of those major companies—we know the international conglomerates of online shopping without necessarily having to name them—on the turnover that they have in this country rather than on the profits that they declare, as they move those profits into the lowest- tax countries. Of course that is what happens.

There is a wider tax issue about how we deal with some of those online companies, but in terms of business rates, the unfairness between them and retailers on the high street is very stark, as with out-of-town shopping centres. It always seems unfair. I have a major out-of-town shopping centre in my constituency, Meadow Hall, which provides a great service to people, is incredibly well used and provides a lot of jobs, but nevertheless the rates paid there are not comparable with those paid by many shops in the high street.

We also have to bear it in mind that business rates are not just about retail. Commercial, manufacturing and other businesses pay rates and there are some disparities. One point we picked up was that where manufacturing industry innovates and improves, it gets an increase in business rates on that improvement. There is something odd about taxing improvement in that way. We should also look at that. There are some other strange things, such as hospital trusts trying to claim exemption from business rates, or lower rates, under charitable status. I mean, come on—that is about moving money from one bit of government to another! The hospitals are saying they are not going to pay, but then local authorities do not get the money. The Government have to sort out those issues. There are some nonsenses around.

If there is a review and there are changes, we have to be very clear that, if the Government legislate for those changes nationally, there is a mechanism to compensate local government for any money that it loses collectively. After 2020, that is going to be quite a challenge. My understanding is that when the 75% retention of business rates comes in in 2020, local authorities will receive only council tax and business rates, which will then be redistributed in some form. There will not be a central Government grant, so if central Government are going to compensate local authorities for any change to the business rate system that reduces the amount of money in total going into local authorities, how will they be compensated? That is a challenge we all need to think about.