Local Government Finance Bill

Debate between George Hollingbery and Heidi Alexander

Wednesday 18th January 2012 Commons Chamber

[Heidi Alexander]

I completely agree with my hon. Friend. I tried on Second Reading to make some of those points. Local economies grow because of a range of factors, including transport and the availability and type of land—it is not all about what a local authority is doing. One can argue that a local authority should foster economic growth through its planning policies and decisions, but the vast majority of councils across the country do that already. The partial retention of business rates will not stimulate local authorities to think, “Hang on, we need to look at our planning policies to decide what more we can do to foster economic growth.”

[George Hollingbery]

As I mentioned on Second Reading, I had exactly that reaction from Havant borough council, which is by no means a wealthy council. When I explained the changes, it was enthusiastic and said explicitly, “We will now have to re-examine how we plan. We will have to think about what we will do to stimulate business.” It was excited and believed that the proposal would make a difference to its policies towards businesses in the local area.

[Heidi Alexander]

I have not had the same reaction from my local authority, although the hon. Gentleman and I represent very different parts of the country. If the Government’s proposal prompts local authorities to think more positively about what they can do, that is all well and good, but it is not the whole answer. I would also urge caution, as developments need to be appropriate. The benefits of increased business rates as a result of new commercial development, arguably in unsuitable locations, might drive more local authorities to grant planning permission for unsuitable developments. We need the right development in the right place, with local government financed in a way that allows it to provide the services needed by the local population.