Oral Answers to Questions

David Simmonds Excerpts

Monday 11th January 2021 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

What steps his Department is taking to promote house building.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

What steps his Department is taking to promote house building.

[The Secretary of State for Housing, Communities and Local Government (Robert Jenrick)]

The Government care deeply about building more homes and delivered more than 243,000 last year, the highest level for more than 30 years. We have gone to great lengths to keep the whole industry open during the pandemic, sustaining hundreds of thousands of people’s jobs and livelihoods, while continuing to stimulate the market through our stamp duty cut. Covid will impact starts significantly, so we are taking steps to sustain activity, including delivering up to 180,000 homes through our £12 billion investment in affordable homes, the biggest investment of its kind for a decade.

[Robert Jenrick]

Like my right hon. Friend, I want to see more homes of all kinds built in all parts of the country, and I want to deliver as many social and affordable homes as we possibly can. I was delighted that the Chancellor gave us the funding for the £12 billion affordable homes programme, which as I say is the largest for a decade. It has a target to deliver 10% of those homes in rural areas, so it should support his community in Lincolnshire.

To answer the broader question, rural areas need to consider how they can bring forward more land in the plan-making process in their neighbourhood plans for homes of all kinds. The current planning system permits local communities to choose the type of homes that they want, so when they allocate sites, they can say that they should be affordable homes, through which they can support the next generation. I do not think any village in this country should be deemed to be set in aspic. Organic growth has happened throughout the generations and can and should happen in the future.

[David Simmonds]

My constituents particularly welcome my right hon. Friend’s recent announcements in respect of improving the circumstances of leaseholders and ensuring that overly tall buildings are not permitted to blight local neighbourhoods. When can we expect to see the benefit of those measures being implemented?

[Robert Jenrick]

I congratulate my hon. Friend on the work he has done in this area, along with a number of his colleagues representing London constituencies. I have corresponded with the Mayor of London, directing him that in the forthcoming London plan there now be a tall buildings policy for London, which will ensure that every borough can determine if and where tall buildings should be built. We have no objection to tall buildings. London needs more housing, and that includes good-quality tall buildings, but it is fair for communities to decide where that should be focused. It may be in areas where there are existing clusters of tall buildings, such as Nine Elms or Canary Wharf, or it might be around transport infrastructure in other parts of the city, but we should be able to protect the character and feel of outer London and those parts of the suburbs that my hon. Friend represents, which deserve that added level of protection.

Local Government Finance: Croydon

David Simmonds Excerpts

Wednesday 9th December 2020 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

The section 114 legal notice that halted all non-statutory expenditure in the London borough of Croydon was the first in the capital in 20 years. The previous two were in Hillingdon, where I serve, to this day, as a councillor—I draw the attention of the House to my entry in the Register of Members’ Financial Interests—and in Hackney. The circumstances today could not be more different, although they may have the eventual similarity of the need for a new Conservative administration to take office in Croydon to sort out the mess—a challenge that I know Councillor Jason Cummings and his opposition colleagues will rise to, and a challenge that was very familiar to us in Hillingdon.

A section 114 notice starts off as a sign of cash flow distress in a council. Income is insufficient for planned expenditure, so services have to be cut and expenditure halted until the budget is balanced again. We know that it has no direct private sector equivalent, but it has the effect of requiring the organisation’s management to demonstrate that it is a going concern. Today, with councillors and residents across the city seeing what is happening in Croydon with worry, it is important that we address here in Parliament the issues that have led to the situation. Given the unfortunate silence of some of the Labour Members representing them, this debate has the purpose of airing the financial challenges facing our London boroughs and providing some assurance to my constituents and others across our capital that the situation in Croydon will not be replicated elsewhere.

Local government financial management is a complex, some would say dull and, in many respects, unique process. It is unique in the public sector, in that councils have to balance their budgets every year. Clearly, constituents across the capital will want to know that there is effective governance and effective oversight of decision making. The consequences can be very serious. In Hillingdon, we faced a 14.8% council tax rise, tens of millions of pounds of unspecified cuts and a budget that had only been legal for the duration of the meeting at which it was agreed, as the legacy of a previous administration. Residents in Croydon and across the capital will want assurance that that is not the fate that awaits them.

Context, of course, is all-important here. Our councillors and constituents want to see evidence that what has happened in Croydon is unique. Further work is under way in the Ministry of Housing, Communities and Local Government and the wider local government sector to establish the detail of what has happened. Certain things are strikingly different about the situation facing Croydon, which should give some assurance to residents in my constituency and elsewhere.

First, looking at the picture across London, the House may wish to note that the finance report to the London Councils leaders committee of 8 December referenced an overall rise of 4.5% in local authority resources available to London as a result of the spending review. The House may also wish to note that the report highlights the additional resources from the Government to ameliorate the financial impact that covid has had on London’s councils. While that leaves an estimated funding gap in the next financial year, the broad picture from across London and the feedback from my local authorities is that the measures provided by the Ministry have met the costs of covid in terms of service delivery. We all recognise that councils in the capital have done an amazing job of rising to that challenge.

This adds up to a picture in which the serious impact of covid on the capital’s finances has been substantially mitigated, to the extent that councils’ financial resilience should not be compromised. Given that background, it is clear that the situation in Croydon is not a consequence of covid, so is it a consequence of austerity? Council budgets consist of a number of elements, some of which are ring-fenced, such as the dedicated schools grant, housing revenue account, parking revenue account and public health grant. The main part of the budget that is visible to residents—the general fund—is largely spent on the authority’s day-to-day statutory services, with the bulk of that on social care, but also on resident-visible services such as parks, libraries, waste collection and clearing up litter. The general fund also services any debt finance costs relating to general fund capital expenditure. Good practice and the expectation of auditors is that councils will retain a reserve—known in local authority accounting terms as “balances”—sufficient to cover likely risks in that budget. This is where we begin to see a divergence from the practices of other London councils.

Financial risk is a part of life for councils, and planning for it is a characteristic of all soundly financially managed authorities. Hillingdon, for example, faced the covid crisis with around £54 million in balances and reserves, sufficient to cover pretty much any financial challenge that the authority might face and ensuring the stable delivery of services to residents—ensuring that libraries, litter clearing, waste collection and potholes being filled would all carry on come what may. Harrow Council, which also serves my constituents, is more financially challenged, but from my regular briefings by its chief executive and finance team, it is clear that it remains on course for a stable and balanced budget. So we need to ask where we see a variance.

Councils’ involvement in housing development is an essential part of housing delivery in the capital, and it is welcome that council tax payers, rather than developers, will see the upside of the gain where developments take place. However, it is noteworthy in the case of Croydon that, unusually, the local authority has loaned a housing subsidiary of around £220 million of capital—borrowed money—of which a total of zero has been returned against a reported business plan to return £110 million by today.

Clearly, that knocks a very significant hole in its budgetary position. As it went into the covid crisis with a capital debt of £1.5 billion, by far the highest in London, it is clear that, although capital borrowing to invest in assets and services is no bad thing, it does impose borrowing costs on council tax payers—in this case, about £43 million each year. That is compounded if those business plans go wrong. Using those resources to fund what it appears since 2007 has essentially been a burst of speculative property investments, it is clear that diversion of resources into servicing debts that are not generating their planned returns on such a scale was a significant part of the problem and created a very weak financial position going into the covid outbreak.

[Elliot Colburn (Carshalton and Wallington) (Con)]

The financial situation in Croydon is worrying to residents in Carshalton and Wallington, as the London Borough of Sutton sits directly next to the London Borough of Croydon. My hon. Friend mentioned the council’s housing development arm. Does he share my concern that the huge amount of money that has been wasted does not seem to be accepted by the council administration itself, and that the first step to recovery for Croydon will have to be the administration acknowledging the mistakes that were made in getting it to this point?

[David Simmonds]

My hon. Friend is absolutely right to draw attention to that. Part of the reason for this debate is the frustration expressed by many that everyone—from the auditors, to local residents, to councillors in the opposition group, to Members of Parliament—was raising these concerns, but they seem to have fallen on deaf ears. There is an absolutely critical need for the assurance in other local authorities—not just Hillingdon and Harrow but Sutton and elsewhere—that a closer degree of attention is being paid to the finances.

The point that my hon. Friend draws attention to was compounded in the case of Croydon, where—as Grant Thornton, the auditor, has highlighted—there was a growing and unaddressed funding gap in the delivery of day-to-day services. These are the basics for a local authority, as opposed to extraordinary speculative business activity that is out of the norm. That prompted Grant Thornton to issue—an extraordinary step—a report in the public interest, given the scale of its concerns, highlighting a shortfall of about £60 million between the resources available and the budgeted expenditure. That is a cash-flow problem on a massive scale, distinctly out of proportion with anything that we have seen in any other London borough.

I should declare that I enjoyed a positive working relationship with the former Croydon leader, Councillor Tony Newman, in my local government days, and always found him a very passionate advocate for Croydon—somewhere that was clearly his place that he felt determined to improve. There is no suggestion that he or his colleagues have acted in anything other than good faith. However, with such a perilous financial position facing residents, and others across London asking what it means for them, it is important that the Department, the Government, the wider local government family and Croydon itself are clear about what has gone wrong and about the fact that this combination of failed commercial property speculation and, more importantly, the failure to address the fundamental management issues is out of step with what we see in other London boroughs. I want all residents in the capital to enjoy the stability, the residents-first attitude and sound financial management that is consistently highlighted by my constituents, because it is critical to the delivery of services on which our community depends.

It is clear that Hillingdon and Harrow, Barking and Bexley and Havering and Redbridge have all faced the financial challenges of austerity and of covid, and they have emerged with budgets that are robust. It is what some have described as disastrous failed commercial property speculation and a fundamental lack of grip on the finances that have unusually brought Croydon to this position. The local government sector is stepping in to help. I know that Ministers will be aware of the particular value of the Local Government Association-led and sector-led improvement teams, who are already beginning to help out. After all, why pay expensive consultancy firms when peers who have been through it are able to rally round and use their experience to help sort the situation out?

Although Labour representatives have sadly remained silent on these concerns—and, in the case of Mayor Khan, heaped praise on the administration for “perfect examples” of projects that even then were millions of pounds over budget—I am determined, and we should be determined, to provide other residents across London with an assurance that such failings are not common across London’s councils. I know that Ministers are equally determined that the success of our councils is not undermined by the reputational damage and what has happened in Croydon.

United Kingdom Internal Market Bill

David Simmonds Excerpts

Consideration of Lords amendments & Ping Pong & Ping Pong: House of Commons
Monday 7th December 2020 Commons Chamber

[Fleur Anderson (Putney) (Lab)]

It is a pleasure to follow the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald).

We are in the middle of a public health emergency and an economic crisis, yet as always the Government are doing their assignment the night before it is due, or maybe later. Now is the time for competence and consensus, so the country can move on and recover. Instead, the Government have introduced legislation that knowingly and openly breaks international law, and will frustrate the process of getting a deal further still. It is unnecessary, it undermines the rule of law, it undermines devolution, it is internationally damaging to our reputation and it threatens to undermine the Good Friday agreement.

I have had 80 constituents write to me ahead of the debate expressing their disgust at what this deal is attempting to do and urging me to support the amendments made in the other place. They are representative of constituents across Putney, across London and across the country. It is not just my local constituents who were left bemused by the first publication of the Bill. President-elect Joe Biden made it crystal clear that the Good Friday peace agreement in Northern Ireland cannot become a casualty of Brexit. He has made it clear that a future trade deal hinges on that. The Bill will end up undermining trust in us as a country.

I therefore urge colleagues to accept Lords amendments to part 5 of the Bill. For those of us who still believe in the rule of law, the amendments are crucial. As the motion from the convenor of the Cross-Bench peers, Lord Judge, stated:

“Part 5 of the bill…would undermine the rule of law and damage the reputation of the United Kingdom.”

He said that by supporting it, Parliament, which is responsible for making the laws and expects people to obey the laws it makes, would be knowingly granting power to the Executive to break the law.

The strength of feeling on this from the learned and noble peers in the other place cannot be ignored. In Committee, Members in the other place voted by 433 to 165 to remove clause 42. That vote was the largest in terms of turnout since remote voting was introduced in the other place and the third largest since the House was reformed in 1999. How can we ignore the disappointment and anger in the other place? How can the Government expect the public to follow lockdown restrictions or China to respect the Sino-British joint declaration, when they grant themselves a mandate to break the law? States and citizens alike are going to rightly think that it is one rule for them and another for us.

This is about Britain’s reputation, not Brexit. Do we want to be a trustworthy nation that stands by its commitments? Do we want to be able to strike good trade deals with other countries? As we deal with the economic damage inflicted by the pandemic, we need to be winning international friends and not alienating them. Brexit has actually done enough damage already. In my own constituency, businesses have already had to close and jobs have already been lost. Let us not compound that by not accepting the Lords amendments this evening. I welcome the Lords amendments and I urge colleagues, for Britain’s sake, to support the Lords amendments to part 5 of the Bill.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I rise to speak in support of the Government and against the Lords amendments. I do so as somebody who campaigned and voted in the referendum for the United Kingdom to remain in the European Union. I believe passionately that a close, positive relationship with our friends and allies is very important to us and very important to them for the future.

However, it seems to me that, in addressing these issues tonight, we need to be enormously pragmatic. Those of us on the Government Benches, when we fought an election and accepted that our plan was to acknowledge the decision of the British people and to put it into effect, accepted the responsibility to make the decisions that would enable that to happen. Taking the stand that the Government are on this matter this evening is, in my view, a crucial step on that journey.

Covid-19: Funding for Local Authorities

David Simmonds Excerpts

Tuesday 24th November 2020 Westminster Hall

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. It is clear that the countries that went local early are the ones that have had the most positive feedback about the way they responded to covid. My two local authorities, Hillingdon Council and Harrow Council, are no exception to that: they have redeployed huge numbers of staff from roles as diverse as working in our libraries and the councils’ contact centres to tasks such as delivering meals on wheels to vulnerable residents and back-filling other staff to enable them to be released—for example, to set up and run emergency mortuaries to serve London. There is no question but that council staff are on the frontline of the response to covid.

We have to consider the question of financing and what it means for local authorities in the future. Before this year of covid, local authority budgeted expenditure in England stood at about £99.2 billion. Within that, the official returns from local authorities show reserves of just over £25 billion, of which £23.6 is non-ring-fenced. I dare say that colleagues over at the Department of Health and Social Care will be looking enviously at MHCLG, because whereas DHSC has to bail out NHS authorities every year for the work they do, MHCLG is in a situation that many businesses would frankly be enormously envious of.

The challenge, however, is that we uniquely require local authorities to balance their budgets in year. Unlike central Government, they are not able to borrow to finance revenue expenditure. They have to make sure that those budgets balance every year, so if there is excess expenditure, cuts need to be made. When we begin to drill down into the national financial position, we find that revenue balances to cover the additional costs are not necessarily found in the authorities that have the biggest financial challenges.

The point made by my hon. Friend the Member for Waveney (Peter Aldous) goes to the heart of the issue. Social care authorities face a lot of demand. Certain London boroughs and county councils have the largest number of vulnerable people to support, but a significant proportion of the balance is in other types of local authorities that do not face the same day-to-day costs. I add my voice to the pleas to the Minister that we need to look at how the funding in the system is distributed if we are to do this better. When we drill down even further and look at the response of individual local authorities, it becomes clear that the covid impact is very different from place to place. Around two thirds of the average council’s expenditure is on social care for adults and children, which concerns less than one in five of the population.

The response to covid has brought all manner of new and additional costs, the vast majority of which—according to feedback from Hillingdon and Harrow councils—has been covered by the forthcoming additional funding from MHCLG. I might not be expected to say this as a serving vice-president and former Conservative group leader at the Local Government Association, but MHCLG has rightly been coming forward with that funding. With respect to the points about how expenditure has changed over time, it is important to recognise that many authorities have, of course, not historically benefited from additional funding based on deprivation. Many of the authorities that have been criticised never had the extra money to cut in the first place.

Non-Domestic Rating (Lists) (No. 2) Bill

David Simmonds Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Tuesday 20th October 2020 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

One can tell by the enormous crowd in the Chamber that the NDR Bill is going to be the highlight of this parliamentary week. Nevertheless, given that the average local authority delivers over 800 different services which, during this covid crisis, are being brought into sharp focus as to how essential they are as part of the warp and weft of our communities, it is important that we get this right.

This matter has been extensively debated previously, and it is largely of a technical nature. However, I would be pleased to hear the Minister address a point about the timing that has emerged during the Bill’s passage through the House. Among those 800 different services, local authorities provide the billing process to local businesses to ensure that business rates are both accurate and able to be paid on time. It is absolutely critical that they have sufficient time within that process to receive the data from the Valuation Office Agency, to test that with the software supplier who ensures that the bills are physically dispatched to businesses, to resolve any disputes that may subsequently emerge—it is not uncommon for businesses to come back with queries—and then to be in a position to ensure that payment is made in a timely manner.

I entirely understand why, from a Government perspective, it is important to align that process with a fiscal event, which is likely to be an autumn Budget. However, as we have seen, especially in these recent times, there is often a situation whereby the timing of those events needs to move around and change. I hope that the Minister will be able to address the need to ensure that this information is available to local authorities in a timely manner so that businesses have certainty and accuracy regarding these bills. I would like an assurance that if there is a need to change the date of the autumn Budget, there will then be scope within the timetable to provide the information to local authorities, prior to the Budget taking place, to ensure that the bills are available to local businesses in a timely manner, and, indeed, can be paid, so as to be part of the critical funding arrangements for local authorities.

With those observations, I take my seat and look forward to hearing the furious and enthusiastically engaged debate that will doubtless follow.

[Steve Reed (Croydon North) (Lab/Co-op)]

This is not a controversial measure, as the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) has made clear, but I want to put a few points on the record while confirming that the Opposition continue to support the proposals.

Since Second Reading, there have been at least a couple of developments. The first is that the rate of covid infection is rising again, and that makes the case for supporting businesses and local authorities, including through business rate reform, even stronger. The second is that organisations with an interest in this Bill have made it even clearer in conversations with us that although they support the Bill, they are looking for yet more meaningful change. The Bill must be the beginning of root-and-branch reform of the business rate system. Right now, the jobs of people in the arts, retail, hospitality and many other sectors are under threat from the economic impact of the covid-19 pandemic. Those sectors and others need help to get through the rising wave of infections, and they need that help as urgently as possible.

Business rates, as currently set up, do not fairly reflect the rental value of the premises occupied, and they have created regional imbalances. A further and growing unfairness is that retailers that occupy shops in high streets pay far more in tax than online retailers do—that situation is, disappointingly, incentivising the decline of our high streets. Research by Revo shows just how acute the regional imbalance can be. In the north and the midlands, the rate rise is almost 12.5 times greater than the rise in rental values, compared with just four times greater in the south. If the Government are serious about levelling up, they need to address that anomaly.

Getting the business rate system right is essential, and it should be seen as part of the support that the Government must provide to businesses and local authorities to help the economy to recover fully. The Government have been too slow to support businesses and local authorities during the pandemic. According to the Local Government Association, the Government have left councils facing a £3 billion funding gap, which means that support for local economic recovery may be cut precisely when it is needed most.

The country is facing a long, hard winter ahead as we contend with the effects of covid-19, and we must provide all the support we can to local authorities and local businesses to get our communities through this safely.

--- Later in debate ---

[David Simmonds]

Does my hon. Friend agree that, when it comes to the Valuation Office Agency, there is a need to recognise that some business rates appeals concern very significant amounts of money—so significant in some cases that they can imperil the financial viability of a local authority? We can cast our minds back to the circumstances of West Somerset District Council, with which I had some involvement in my time at the Local Government Association. The business rates appeal relating to the nuclear power station in that area, which was the main source of business rates for the local authority, was so big that local government reorganisation was the only solution to make the delivery of local government services in that area viable. In my area, Heathrow airport is the biggest single source of business rate payments, and changes in those payments can lead to significant in-year variations in business rates. Can he give me some assurance that his Department is focused on making clear to the VOA the importance of processing these appeals in a timely manner and giving sufficient scope for local authorities to manage the impact?

[Luke Hall]

I thank my hon. Friend for his intervention. He is entirely right to highlight some of the challenges, and I can give him that assurance. The fundamental review of business rates is considering a number of issues, including the frequency of future revaluations. He is right to make that important point.

I am afraid I cannot agree with the hon. Member for Croydon North about local government funding. We have had exchanges on that important point, and we have different views. The Prime Minister announced last week an extra £1 billion of funding for local government. I am aware of the need for certainty, and we plan to explain the distribution of that funding as quickly as we can. The £4.8 billion that has been provided to local government, including £3.7 billion of un-ring-fenced funding, has been a big support to councils, which are doing an incredible job up and down the country and delivering first-class public services in an extremely difficult and challenging environment.

[David Simmonds]

Does the Minister recognise that the complexity of local government finance is a huge part of addressing public concerns? A top-tier authority such as a London borough will have responsibility for a parking revenue account and a housing revenue account, and it will have business rates income and council tax income. Over and above that, it will expect to see regular income from fees and charges for services that it provides to the public on a traded basis. Although some of that is captured by the core spending power measure, which is usually used by his Department as the critical way to explain the financial position of local authorities specifically and the local government sector in general, does he agree that that could be improved, so that Members and our constituents could grasp in a little more detail the impact that these changes have in their town hall or civic centre?

[Luke Hall]

My hon. Friend makes a fair point about the need for clarity of message about the spending power of councils, and I am happy to continue conversations with him about how we can look at that. We believe that core spending power remains the most accurate available method to discuss local government finance. That is why we use it when highlighting, for instance, the 4.4% real-terms increase in local government finance this year as part of the local government finance settlement. I thank him for that intervention. He is absolutely right to put that on the record.

We are trying to give councils the tools they need to ensure that they can implement this revaluation, cognisant of the need to provide clarity as part of a fiscal spending event. I restate the point that if that was not possible, we would follow our obligations.

[David Simmonds]

Will my hon. Friend give some consideration to updating the list, which was originally conceived in the days of Lord Pickles when he was Secretary of State at the Ministry? He sought to gather best practice from across the local government sector. While we recognise that the reduction in the cost of biscuits at meetings was not going to bridge any budget gaps, many in the sector—I pay particular tribute to Sir Ray Puddifoot, the leader of Hillingdon, who has just announced his retirement—are masters of the art of looking at different ways to maximise local authority income within the framework provided by the Ministry, to provide the greatest possible consistency and financial stability to their local authority.

[Luke Hall]

My hon. Friend makes a hugely important point, and it is probably one that could be looked at in the even wider context of sharing good practice by local authorities that are doing such an incredible job. That is why we have tried to ensure, in the support we have tried to give councils during the pandemic, that they have the tools and ability to share best practice. We also facilitate that through my Department and our Government, whether that is the Brexit delivery board, for instance, or any of the other vehicles that we use to share good practice.

I put on record my thanks and appreciation to council representatives, groups and the sector as a whole for their role in sharing and providing good practice. The Local Government Association does an incredible job of bringing that type of guidance and support together and ensuring that there are good forums for councils to meet and discuss a wide range of issues, including the one that my hon. Friend rightly highlights on council funding and finances.

We know that it has been a challenging time for councils throughout this pandemic, but that is why we have distributed the funding in the way that we have, working closely with the Department of Health and Social Care. We are cognisant of the pressures still faced by local authorities, which is why our income scheme, the infection control fund and others have been so important to supporting local authorities throughout this pandemic.

We believe that this is a small but important Bill. We are extremely grateful for the support of Members across the House. We believe it is a common-sense solution to the problem faced by councils. I take on board the wider points about business rates that Members have raised today, and I therefore highlight the wider review of business rates that is being conducted. I am always willing to take further representations about the importance of that review. This is a common-sense Bill, and I am grateful for the support of the House.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

Non-Domestic Rating (Lists) (No. 2) Bill

David Simmonds Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution & Ways and Means resolution: House of Commons
Wednesday 30th September 2020 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

The reform of business rates and revaluation has been in a holding pattern for many years, and those of us who have spent time in local government will be conscious that the expected impact of that reform on local authority finance has been hotly debated. I think that we are still of the view that business rates in their current form are the worst possible solution to financing local government, with the exception of all other available choices. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) made that point strongly in describing the hard choices we need to make in identifying alternative sources of finance. It seems clear that, in the Treasury, the business rates billions remain a key building block of our national budget. As a consequence, there has been a long-held reluctance to tinker with them, for fear of the wider impact on the bigger fiscal picture.

Business rates have been in existence for a long time. For many of our citizens, they used to walk in lockstep with residential rates, long abolished. Even today, the variation in business rates income at local authority level is reflected in the grant funding—the traditional revenue support grant that was the basis of most local authority funding—and in things such as school funding. When schools were first set up as a local authority responsibility, local authorities funded them according to their incomes from business rates and domestic rates, and that differential has been carried forward into the funding rates of our schools today. That long-standing impact and the fiscal picture across government of linking day-to-day expenditure on these services to the income we can rely upon coming through business rates remain in place. That goes to the heart of the point that a number of colleagues have made about the need for reform, but we need to address it as part of that complex formula.

I would like to add my voice to the request from many colleagues for greater flexibility in the way that business rates are deployed. I am fortunate to represent a constituency that has a great diversity of local businesses and very vibrant high streets. Many of those new businesses have grown up to take the place of more traditional activities, some of which have seen their departure mourned by local residents, and others perhaps less so. For example, a sports club has closed and been replaced by a children’s soft play area, because the baby boom means that there is now a much greater market for that kind of activity. The bank that I used to be responsible for is now a bookshop and coffee shop on Pinner High Street, reflecting the fact that our high streets can remain vibrant.

This is not about saying that the Government or the local authority need to pick the businesses that they think should be winners on the high street. It is about reflecting the fact that the challenge of online versus bricks and mortar retailing, the changing nature of the high street and our ability to keep it vibrant on behalf of our communities means that we need flexibility.

[Kevin Hollinrake]

My hon. Friend makes a good point. He alluded to the point I made earlier. If we had a business rates system that purely provided discounts for retail premises, what would we do with premises that were not retail and became retail or were retail and became another business category?

[David Simmonds]

My hon. Friend reinforces the point robustly. I declare an interest, as a father of young children. The development on our high streets of more community-focused business opportunities, due to there now being many more young children in my part of the world looking to access soft play, clothing retail and other things, is a reflection of the fact that our communities change—they are vibrant. That is what their nature should be, and those market forces are a welcome part of responding to the changes in our communities.

When we see challenges that come along, whether they reflect the national economic position or indeed wider issues on a local level, we need to be able to respond effectively. A really good illustration of that is the impact on the local authority that serves most of my residents and Heathrow airport—the London Borough of Hillingdon. Heathrow is the largest single payer of business rates within the Greater London area, but the challenge for the local authority that collects those business rates is that the revenue it collects and the proportion retained locally is far less than the cost to the local authority of dealing with the consequences of having the airport in its local area.

That brings me on to my final plea to Ministers as we begin to look to what the future of business rates may be beyond this revaluation. Too often, there is little or no upside for local authorities in supporting the development and growth of businesses, because so much of the money goes into the central pool and the community sees the disbenefits such as congestion and pollution—sometimes, in the case of airports, in the form of air pollution—and needing to provide services to people such as refugees and those who find themselves stranded at the airport. All those are direct costs to local taxpayers as part of the statutory frameworks; they simply are not met by the share of the income that lands locally.

We need to have a much broader discussion about how we ensure that local authorities that see these opportunities to develop local businesses, jobs and a vibrant local economic strategy can see the benefit of doing that coming directly into their local community. In the United States, for example, it is a very common part of considerations of any infrastructure development that local politicians can say to the local community, “Yes, you will have to put up with a downside, but you will see this enormous benefit as a consequence of this development or this project going ahead.”

We need to see this as part of a much broader and more strategic review of the way in which we fund public services in this country. The hon. Member for Blackburn (Kate Hollern) pointed to the impact on local authorities of a reduction in revenue support grant. That is part of this complex picture, but over the same period, we have seen significant growth in levels of business rate income that have been retained by local authorities. When the Ministry makes its calculation of spending power, the reduction in spending power does not simply reflect a reduction in the revenue support grant: it then needs adding back into it the additional revenue that is coming from other sources.

As my hon. Friend the Member for Thirsk and Malton explained so clearly, this is not simply a matter of being able to offer everyone out there who would like to see a reduction in their business rates such a reduction, because if we do that, we need to decide which other taxes will go up to pay for it. We must make sure that we consider that decision fully in this House before it is made, because we have a responsibility to local authorities and residents to make sure that the services we commit to provide for them are financially sustainable.

United Kingdom Internal Market Bill

David Simmonds Excerpts

Tuesday 22nd September 2020 Commons Chamber

[Sir Robert Neill]

The first point is that there have to be professional qualifications in order to recognise the people qualified. The Bill does not seem to cause any difficulty about that. I was also making the point that the carve-out on legal qualifications accepts that there are legitimate areas of difference, but there are many other areas where it is entirely legitimate for us to try to work together as a single UK market. I would have therefore thought that the Bill was balanced and proportionate in that regard. I cited services and the importance of the financial services sector, both north and south of the border, as a key example of that. I hope that after the transition period we will also continue our good links with the financial services sector in Dublin, where a number of English legal and professional firms have bases because of those links. The Bill is not malign in any of those regards.

Although the Bill does not and need not cover this, I hope as we go forward that we will see what can be done to help other parts of the broader British family that would desire access to our new internal market—for example, the Crown dependencies, the Channel Islands and the Isle of Man. Many of their financial sectors— their trust arrangements and their banking fund arrangements—are importantly and closely linked to the City of London and the UK. The Justice Committee has oversight of the Ministry of Justice’s work on the relationships with the Crown dependencies, and I think there is a great desire to see how we can strengthen the access between them and the UK. The aspiration for the Crown dependencies to have free and unfettered access to the UK market is something we should look to explore with them on a reciprocal basis.

That particularly and specifically applies to our British territory of Gibraltar—as you know, Ms McDonagh, I have the honour to be the chair of the all-party parliamentary group on Gibraltar. It is a well expressed intention of the Gibraltar Government, supported by all parties in Gibraltar’s Parliament, to have access to, in effect, a free trade area with the United Kingdom. I hope the Minister will take that back to his colleagues in the Government, because it ought to be a no-brainer as we go forward. It causes the United Kingdom no difficulty, and it would be of considerable reassurance to the people of Gibraltar, who despite having voted overwhelmingly to remain in the European Union, none the less trumped even that and asserted their membership of the British family and the desire to remain with the United Kingdom and not to be coerced, sometimes, by their neighbours. Supporting them by making sure they have full access to the internal market ought to be a high priority, both practically and morally, for the United Kingdom Government.

Finally, there is one area that we can perhaps simplify. I am not generally in favour of simplifying or lowering food standards, and I am certainly not in favour of lowering environmental or food standards as we leave the EU or in any future free trade deal, but there is one area, ironically, where leaving the EU may give us something we can turn to our advantage, and that relates to public procurement and, in particular, local authority procurement.

As a number of hon. Members know, I served in local government for many years before I came into this House, and I was local government Minister for the first half of the coalition. One of the genuine complaints I had from councils of all political complexions was about the complexity of going through the OJEU—Official Journal of the European Union—process, where contracts over a fairly basic level had to be advertised through a pretty bureaucratic process. That had the no doubt laudable objective of ensuring that firms across the single market could access those contracts, although, in practice, doing a contract in Bromley, Merton or wherever was not likely to be attractive to a small-sized firm of builders in Poland or the Czech Republic.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

rose—

[Sir Robert Neill]

I will certainly give way to my hon. Friend, who knows a great deal about this.

[David Simmonds]

Does my hon. Friend note, as I do, that the OJEU process in the United Kingdom resulted in less than 1% of procurement exercises yielding a bid from outside the United Kingdom?

[Sir Robert Neill]

My hon. Friend, whose experience in local government is huge and much more recent than mine, is absolutely right. That is the irony—what was a theoretical process none the less caused considerable delay and cost for local authorities seeking to carry out a range of capital works. I hope the Government will say, “Let’s seize the advantage and simplify the public procurement process.”

For a raft of reasons that have been well rehearsed and that I need not repeat, local authorities are hard pressed for cash, and we could certainly make their lives easier by enabling them to save money in the way they do their procurement. We can make it easier for them to adopt a policy of sourcing contractors locally, as they already try to do, so that they can be drivers of support for businesses in their area, without needing to parcel up contracts artificially, as was historically the case to avoid the need to go through the OJEU process. That is one area where I hope the Minister, whose own experience in local government is considerable, will talk urgently and swiftly to his colleagues in the Ministry of Housing, Communities and Local Government so that we can sit down with the local government sector and get rapid reform of local government procurement rules.

So without more ado, I commend the Bill, now that the little obstacle that might potentially have been in its way has, I hope, been resolved. We can now get on with the serious business of making the best of what is, to be frank, a bad job. This is not where I wanted to be, but it is in the interests of the country that we have a proper working set of rules to enhance the internal market in the United Kingdom.

--- Later in debate ---

[James Daly]

Many, many things could happen in life, but the point remains that not one Opposition Member has been able to point to one action of the Government—they have not pointed to literally anything—that would indicate that they are derogating from the highest possible standards and the standards that we enjoy at this moment in time and that we have under the European Union.

This is a good Bill and this is a positive Bill. Rather than dwelling on the legal argument, which would be somewhat going off the point in respect of where we are today and which I am tempted to do, I will say that this is a Bill to strengthen our United Kingdom, to invest moneys in every part of it, to ensure that we have free unfettered access and to ensure that all parts of the United Kingdom are within the UK internal market, as set out in the withdrawal agreement and the Northern Ireland protocol. I congratulate Ministers on this Bill as it will only do good for our fellow citizens in all parts of the United Kingdom.

[David Simmonds]

At this stage in the debate, my challenge is to try to say something original on the various different topics that we are considering. Today’s business concerns mutual recognition and non-discrimination. Having spent many happy days of my life in the Centre Borschette on the rue Froissart in Brussels, alongside very good colleagues from Scotland, Ireland, Wales, the United Kingdom and the other composite states of the European Union, debating these issues in respect of, in my case, education, while committees alongside us debated those issues around financial services, veterinary products, fish and every possible type of goods and services, it is clear that the United Kingdom has long played a key role in writing these rules.

I welcome the commitment that was alluded to by my hon. Friend the Member for Bury North (James Daly) that, at the end of the transition period and as part of the process of withdrawal, the United Kingdom’s commitment is that all those standards are written into the law of the United Kingdom, so the minimum standards that apply to us as a member of the European Union that already prohibit chlorinated chicken and hormone-fed beef will become the law of the land.

Let me try to concentrate on three points that have not been covered in sufficient detail yet. The first is the importance of the integrity of the UK single market and why this matters in the context of the trade deal that we are seeking to achieve. In 2018, the United Kingdom was fined £2.4 billion for failing to uphold its treaty obligations as a member of the EU to enforce the standards that we are committed to apply at our borders.

Having spent so much time in Brussels, I do understand that the UK is a little notorious with our friends and allies, and the risk they fear is that the United Kingdom, with our global reach in terms of our international maritime trade, will become a backdoor into the European single market for goods that do not meet the minimum standards that we need to uphold. That is a legitimate concern, especially as Brussels expects to receive significant amounts of trade tariffs on those goods that are coming into the UK single market and, potentially, with an open border on the island of Ireland, would then be re-exported. We need to respect the fact that that is a genuine concern on the part of the European Union, we need to pay the attention that Ministers have referred to to ensuring we uphold rigorous standards on our own borders, and we need to ensure that our voters and the wider public recognise the commitment that the United Kingdom single market will continue to uphold the high standards that we have in the European Union, and in future, where we seek to diverge, it will be in an upward direction, with higher standards, rather than lower.

The second issue I would like to touch on is devolution. I do have some sympathy with the concerns of Members from devolved nations about the power grab point. Many colleagues—Tony Buchanan and Stewart Maxwell from Scotland, Arnold Hatch and Jonathan Bell from Ireland and many others from across the United Kingdom, and other Members of this House, including the hon. Member for Leicester East (Claudia Webbe) and my hon. Friends the Members for Northampton South (Andrew Lewer) and for Bromley and Chislehurst (Sir Robert Neill)—have played a role in exercising UK local and regional government powers in Brussels over the way in which we, as part of that wider single market, both regulate and choose to spend the funds that we are part of, like the European structural fund and the European social fund.

I note that those issues have already been exhaustively debated, but a point that has not been aired very much in the debate is that, following the ending of the arrangements whereby we participated in those bodies, we have a range of UK Joint Committees, including ones that are there to exercise a similar scrutiny and oversight role around how that regulation is undertaken and how those funds are expended. It should be of concern to us that with an agreement already in place—I know Scotland has nominated SNP Members to the Joint Committee, with the Committee of the Regions to supervise and provide oversight of the run-out period of the European structural funds—we still need to hear a little more about how we are all committed to making those arrangements, which were committed to by Ministers on the Floor of the House, work effectively in the interests of our UK single market in future.

We are seeing many parts of our constitution—our local authorities, our regional authorities—stepping up to the plate, and our businesses being a part of that. It is very sad not to hear that debated and aired in this place, especially when in the case of structural funds there is £730 million unspent that the UK has already contributed, which will be returned to Brussels if Members across the House do not put pressure on our Front-Bench team to make sure it is spent by the end of this year.

Finally, I would like to touch on the point about legality. I am not a lawyer by background, but it is very clear to me that this debate has been something of a lawyers’ delight. We have had advice from those with eminent legal qualifications about whether things do or do not contravene international law and what triggers those decisions, and opinions given by people with immense political experience about the impact that that will have on the UK’s reputation. It strikes me, however, that what is being proposed by the Government is quite similar to what is common practice when sending our armed forces to places where there is a high degree of tension, when the rules of engagement say that people will not fire unless fired upon. What I am hearing from the Government is that these arrangements are there in the backstop so that unless the negotiations— which, as the Secretary of State for Northern Ireland indicated, are proceeding in good faith—break down irretrievably, they will not come into play, but it is a fact that, whether they are in the Bill or not, the UK would have recourse to those provisions if we needed them, and it is an appropriate precaution for the Government to take to bring those forward now.

These kinds of conflicts are not unusual. On 5 May, the German federal court handed down a judgment in respect of Germany’s signing up to the European Central Bank’s buying of bonds in order to enable a European recovery from coronavirus, and said that that was not lawful and conflicted with the domestic law of Germany. While there was much wailing and gnashing of teeth in the Government there, I understand that that is one of many judgments that have been handed down over the years demonstrating that there will be these conflicts between domestic and international law and that they need to be resolved not as a matter of taking down a legal textbook, but as a matter of negotiation in good faith between partners and allies. I have every confidence that that is what will be achieved.

I understand the fury and frustration of many of our colleagues who have given so much of their political lives in seeking to reach a deal. To me it is very clear that both sides are seeking to negotiate in good faith and the more that we can respect that, the better. The European Union is our largest, our most valuable, and, importantly, our most mature single market partner that we engage with. It is crucial to our economy and enormously valuable to their economy that we get a deal. I can see that behind the scenes Ministers and negotiators on all sides have been putting the mechanisms and structures in place to deliver that. I support the Government in seeking to ensure that the deal is in place for the good of the United Kingdom and our allies by the end of the year.

Rented Homes: End of Evictions Ban

David Simmonds Excerpts

Wednesday 22nd July 2020 Commons Chamber

[Christopher Pincher]

The best way to help the hon. Gentleman’s constituents—and all our constituents—out of this crisis is to get the economy back on track and people into work so that they can pay their bills and enjoy their lives again. As for the specifics of his constituents’ cases, in fact, we have not given £50 million—we have given £500 million in council tax relief for the most egregious cases and £63 million for the non-shielded food vulnerable to help them. We have protected, as I have said, 8.6 million people as a result of the other changes that we have made. I am confident that we have done the right thing, and we continue to do the right thing—for example, by adding a further £40 million to discretionary housing payments, bringing the total to £180 million, to help the sort of people he talked about in his question.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

In my constituency, I have military families, returning from serving this country abroad, who are unable to regain access to their family homes because of the moratorium on evictions. I have neighbourhoods that are blighted because, despite the best action of local authorities to evict households that are a persistent source of antisocial behaviour, the moratorium means that those individuals are there, thumbing their noses at their neighbours and causing misery for many. May I encourage and invite the Minister to stick to his guns and ensure that we can still take robust action against those who abuse their position?

[Christopher Pincher]

I quite agree with my hon. Friend. Those who abuse their position make everyone’s lives intolerable. Baroness Newlove, the Victims’ Commissioner, has said that antisocial behaviour is an issue for local authorities, the responsible agencies, Government—possibly even Opposition. People are being let down by antisocial behaviour, and antisocially behaving tenants need to be dealt with by the courts. I will stick to my guns—the Government will stick to their guns—and we will do the right thing by landlords and tenants.

Housing, Communities and Local Government: Departmental Spending

David Simmonds Excerpts

Thursday 9th July 2020 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I first need to draw the House’s attention to my entry in the Register of Members’ Financial Interests as a serving councillor.

I am sure that my hon. Friend the Minister would agree that the story of local government throughout this covid crisis, and for the past decade, has been one of extraordinary financial resilience. A number of Members have made reference to the NHS. We should ask ourselves whether the NHS could have managed a 60% reduction in the funding that it receives from central Government and still have seen the satisfaction of its users increase, as our local authorities have done over that period. How do we get more people into politics who come from business and professional backgrounds and who represent their communities? Clearly, if we look at the cabinets—the leadership—of our local authorities, that is exactly where we find those people. I pay particular tribute to my excellent colleague, Ray Puddifoot of Hillingdon Council, who has just entered his 21st year as leader of that authority, having spent a lifetime as a highly experienced and senior chartered accountant. He is one of the many local government people who have brought stability to the finances of our councils.

I want to pick up on three issues that I invite my hon. Friend to consider and that I think this House needs to pay particular attention to. The first concerns housing and planning. We hear a good deal about the impact that our planning system has, but we need to recognise that more than half a million consented developments are as yet uncommenced. Local authorities are doing an outstanding job in ensuring that housing opportunity is moving through the system, yet, all over the country, developers are playing off different parts of the system. Perhaps it is time to consider simply abolishing the Planning Inspectorate and Secretary of State call-ins, making sure that the local authority’s decision is final so that developers know who they have to negotiate with, the decision is made, and they can get their spades and shovels in the ground to develop the houses that we need.

The second issue that I would like my hon. Friend to consider is social care, which has been touched on extensively. Many of our constituents are astounded to discover that social care accounts for about 70% of all the money that our local authorities spend. Indeed, children’s social care is the only area of council spending to have increased, on average, in the past decade, yet it is a service that touches barely one in five of our constituents. We need to make sure that we have a financial solution that opens this up to the widest possible group of people to get their support.

Finally, I would ask us to learn lessons from what we have done with delayed discharges, where we need to see that local authorities and the NHS work together. Local authorities brought about a massive improvement in delayed discharges; the NHS strolled. We know where the opportunity lies.

Draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020

David Simmonds Excerpts

Wednesday 8th July 2020 General Committees

[Paul Scully]

Thank you for that clarification, Mrs Miller, and I thank my hon. Friend for his intervention. We can debate this issue when the National Security and Investment Bill comes to Parliament.

The second change that the regulations make will allow the Secretary of State to disclose information to the European Commission or member states when the Secretary of State wishes to provide comments on FDI in a member state. As I said earlier, the Enterprise Act already allows the Secretary of State or the CMA to provide information to the Commission or member states where required because of the Community obligation.

The interventions were about further information that is not necessarily required, but I believe that in the upcoming National Security and Investment Bill we will have plenty of chances to debate the area and ensure that, with the Enterprise Act, it is solid. Although we do not believe that we should be part of a reciprocal information-sharing procedure at the end of the transition phase, we are already going that little bit further anyway. However, it will be revoked, along with the EU regulation.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I want to address a key issue for me: the need to have something in place to ensure certainty. That addresses the point made by the right hon. Member for North Durham. These measures envisage a seamless arrangement until such time as Parliament has implemented new measures. What I think I read in the explanatory memorandum is that the Enterprise Act ensures that the system of which we are currently a part with the European Union to manage the process is operational in UK law through the Competition and Markets Authority.

[Paul Scully]

I thank my hon. Friend. The UK and the EU will have separate jurisdictions to scrutinise mergers. The EU might look at a merger if it is relevant, but that would not stop the CMA from conducting its own investigation.