Greg Clark
Main Page: Greg Clark (Conservative - Tunbridge Wells)
Nusrat Ghani (Wealden) (Con)
4. What estimate he has made of the amount of revenue that councils will be able to collect through devolved business rates.
The Secretary of State for Communities and Local Government (Greg Clark)
Councils currently retain just under £12 billion of the business rates that they collect. As a result of our reforms, we estimate that, by the end of this Parliament, councils will retain the full £26 billion raised from business rates.
Mims Davies
Local confidence is rock bottom in the budget-setting of Eastleigh Borough Council, which is showing a huge funding gap. Does the Minister agree that the new business rates powers will help councils to take control of their finances properly and help local business?
Greg Clark
I do indeed. I enjoyed meeting many of the councillors from my hon. Friend’s constituency recently and seeing the excellent work that is being done to attract businesses through the local enterprise partnership and investment in Eastleigh College. Business rates are buoyant in her area, and she will know that an extra two thirds of a million pounds is available this year because of that buoyancy in business rates, so the prospect of more business rates is clearly going to be of great help to her council.
Nusrat Ghani
The Sussex chamber of commerce has declared its delight at the Chancellor’s announcement that small business rate relief will be doubled, but will the Secretary of State confirm that the Budget measures will ensure that rural areas such as Wealden and East Sussex, which are net receivers of business rates, are not worse off as a result of the change?
Greg Clark
My hon. Friend can have that reassurance. The package for small businesses in the Budget has been warmly received by small businesses right across the country. It amounts to a reduction of nearly £7 billion over four years, and every penny of that will be made up to local councils, so small businesses will benefit and councils will suffer no detriment.
Mr Clive Betts (Sheffield South East) (Lab)
I would like to take the Secretary of State up on that so that he can explain precisely how it will happen. The Institute for Fiscal Studies said the other day that it is perfectly possible to compensate for the changes in small business rate relief at present, while there is grant in play, but that it will be nigh impossible to do that from 2020 onwards, when there will be no grant for the Government to use. Also, how, precisely, will the Secretary of State compensate for the change from RPI to CPI, given that that involves a variable that changes every year? How will the mechanism work?
Greg Clark
The answer to the first question is that compensation will be paid in the way that it always has been when we have reduced business rates: as a section 31 grant from Government to local authorities. That mechanism is tried and tested, as the hon. Gentleman knows, and it is the way these sums are always paid. He will also know that, when it comes to the full retention of business rates by 2020, the forecast, as I said, is that there is £26 billion of revenue, and councils retain £13 billion. Therefore, there are transfers that need to be made in, which will be taken into account by the end of the process. However, I know that his Select Committee, and local government generally, will want to help to advise on that.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Did the Secretary of State see comments in the Sunday papers saying that poorer areas of the country will again be doubly disadvantaged? What is the point of mucking around with local government finance if we continue to rob local government of its powers? Taking away responsibility for education must be one of the most shocking and negative things that I have heard in any Budget.
Greg Clark
For generations, local government has argued that it should be financed from its local revenues. It has taken this Government, in devolving powers and finance, to say that every penny of business rates raised by local government should be kept by local government. The hon. Gentleman talks about the devolution of powers, but he will know that many members of the Labour party in towns and cities across the country have welcomed the devolution of powers to local government under this Government, which is something that I am very proud of.
Robert Neill (Bromley and Chislehurst) (Con)
The Secretary of State has reflected on the importance of protecting local authorities from an erosion of the tax base. That is a welcome measure. In setting the baseline for business rate retention, will he ensure that the measures include an incentive for local authorities to encourage the development of small business premises just as much as larger ones, to ensure that there is a mix?
Greg Clark
My hon. Friend makes an excellent point. One of the reasons for the 100% retention of business rates is so that there is a direct connection between local authorities and their businesses. Of course, the best authorities, including his own, have always seen it as their duty and responsibility to promote and attract businesses. This approach means that they will get their reward for it.
Mr Steve Reed (Croydon North) (Lab)
With a former Cabinet Minister openly admitting that the Government are dividing Britain with unfair cuts, will the Secretary of State reconsider his divisive decision to cut the 10 poorest councils 23 times harder than the 10 richest?
Greg Clark
The hon. Gentleman is wrong. The decisions we have made to reduce spending would have been made by any party that came into power after the election. The difference is that our party has devolved powers so that local authorities can have greater concern for their own future. On the change we have made to the methodology, the Institute for Fiscal Studies has said that it is an improvement and that the system is fairer than that in previous years.
Clive Lewis (Norwich South) (Lab)
2. What recent assessment he has made of the fairness of local government funding.
Andy McDonald (Middlesbrough) (Lab)
17. What recent assessment he has made of the fairness of local government funding.
The Secretary of State for Communities and Local Government (Greg Clark)
The local government finance settlement reflects a detailed assessment of the needs and challenges of each area. We have announced a fair funding review and will work with local authorities to determine the appropriate funding needs of different types of areas as we move to 100% business rates retention by 2020.
Clive Lewis
Last month, the Government announced that 85% of the £300 million transitional fund for local government is going not to Labour or Liberal Democrat councils, but to Conservative councils. Does the Secretary of State agree with the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) that that does not matter, because those areas “don’t vote for us”?
Greg Clark
I am surprise to hear the hon. Gentleman ask that question, given that his county of Norfolk has benefited from £1.6 million through the transitional grant, which I would have thought that he would welcome. On what party colleagues have to say, he should take advice from Bury Council, which has said:
“The methodology is a welcome improvement on that employed for allocating revenue support grant reductions…and goes some way to redressing…years in which poorer metropolitan authorities have received an unequal share of…funding.”
The hon. Gentleman should talk to his party members as well as his constituents.
Andy McDonald
As a native Teessider, it cannot have escaped the Secretary of State’s attention that towns such as Middlesbrough have been hit hardest by his local government cuts, yet Middlesbrough has not had a penny from the transitional fund. It seems that this Government’s duty is only to those wealthier areas that voted Tory. Is he not ashamed of his callous and unfair treatment of his hometown?
Greg Clark
The hon. Gentleman should inform himself better about what is happening in the Middlesbrough local authority. For a start, as a result of the change in methodology, Middlesbrough gets an improvement in resources of nearly £4 million. I would have thought that he had read the consultation response that I received from Middlesbrough Borough Council. In response to the question,
“Do you agree with the proposed methodology for calculation?”,
the council said:
“Yes we would agree with the proposed methodology on the basis that this does not have a disproportionate impact generally across local authorities.”
The hon. Gentleman should inform himself before he comes to the House and asks questions.
Mark Pawsey (Rugby) (Con)
Rugby Borough Council has a proactive attitude towards development and attracting new business, and it is very much looking forward to a greater retention of business rates. The council tells me that it likes certainty. In the event of the Government effecting a change such as additional relief on business rates, could the Secretary of State clarify what the transitional arrangements would be and what compensation might be available to local authorities?
Greg Clark
My hon. Friend is correct to raise this issue. As part of the transition to 100% retention, we need the various checks and balances that will ensure that no authority loses out. The Government and the Local Government Association will work together to design the system. I look forward to receiving the responses to the consultation, which will include taking advice from Members of this House through the Select Committee and other bodies.
Simon Danczuk (Rochdale) (Ind)
The Government have cut millions upon millions of pounds from Rochdale’s council budget, but they have dumped hundreds of asylum seekers in our town, adding pressure to already overstretched local services. Local people are not happy with the situation. What is the Secretary of State going to do about funding?
Greg Clark
Rochdale has benefited from the change to the methodology that we put in place, and the representative organisation for the metropolitan authorities has welcomed the change. The council has benefited from the local government settlement, and the hon. Gentleman should welcome that.
Liz McInnes (Heywood and Middleton) (Lab)
Following this weekend’s revelation that the Government have targeted the working poor because they do not vote Tory, will the Secretary of State admit that the same warped thinking led him to hand £465,000 of transitional funding to Tory-run Trafford council and nothing to Labour-controlled Manchester and Rochdale?
Greg Clark
I would have thought that an Opposition spokesman would make herself familiar with the settlement. Both councils that the hon. Lady mentioned have benefited from the change in methodology. The council that her colleague, the hon. Member for Croydon North (Mr Reed), used to lead—Lambeth Council, which was Labour last time I checked—specifically called for this transitional measure, saying:
“Transitional measures are usually employed where a new distribution methodology is introduced to ensure significant shifts are not experienced…The Council believes this is sensible on the basis that…those benefitting are not adversely affected.”
That is exactly what we have done.
Clive Efford (Eltham) (Lab)
3. What assessment he has made of trends in the number of affordable homes available to buy since 2010.
The Secretary of State for Communities and Local Government (Greg Clark)
Before the Easter recess, I should like briefly to update the House on the recovery following flooding caused by Storm Desmond and Storm Eva. The Government have moved rapidly to support more than 21,000 flooded properties; £50 million in dedicated funding has helped to ensure the rapid repair and reopening of key transport arteries—I am delighted that Pooley bridge in Cumbria reopened yesterday; a further £130 million will be spent repairing roads and bridges; £700 million was announced to boost future flood defence and resilience; and I am delighted that, in response to the fundraising from community foundations, for which the Chancellor offered to have match funding, I can now announce a one-for-one match for every pound raised by those community foundations during the floods.
Daniel Zeichner
The local government pension scheme provides future security in retirement for millions of public service workers. It is a funded scheme financed by the contributions of those workers. The Government now seem to be trying to interfere in the way those funds are invested, but investment decisions should be driven by the interests of the members of the scheme. What legal powers do the Government have to do this? Are they intending to direct the investment strategies of other UK pension funds? If not, why treat the local government pension scheme differently?
Greg Clark
As the hon. Gentleman knows, we have a consultation on this. I do not know whether he has contributed to it, but it has now closed. We are reflecting on the responses, and I will update the House when we have had a chance to do that.
Maria Caulfield (Lewes) (Con)
T2. Many towns and villages in my constituency have formally adopted their neighbourhood plans. Places such as Newick and Ringmer have had their plans in place for a long time, yet they are constantly challenged by developers who put in applications for sites outside the plan. Will the Minister uphold the status of neighbourhood plans in the planning process and return local democracy to our villages and towns?
Peter Kyle (Hove) (Lab)
During his statement on local government funding, the Secretary of State said that he would re-examine the fact that the social care precept will help the areas that need it most the least. How has he updated his thinking, because the areas of the country that rely on this the most are simply not getting the investment they need?
Greg Clark
That is not true. The hon. Gentleman will see that the proposed allocation of the better care fund goes precisely to those authorities that have fewer resources through the precept. I am very happy to meet him to update him.
Martin Vickers (Cleethorpes) (Con)
I welcome the greater Lincolnshire devolution deal that has just been finalised, but things are complicated by the fact that Lincolnshire County Council is in the east midlands whereas the two unitary authorities are in Yorkshire and the Humber. Will the Secretary of State look at this and re-designate the whole of Lincolnshire into the east midlands?
Greg Clark
I do not have any regard to these artificial, expired administrative boundaries. Lincolnshire enjoys a proud identity, and my hon. Friend is a big champion of it.
John Cryer (Leyton and Wanstead) (Lab)
In only six years the Government have managed to take away £100 million from Waltham Forest Council, which, funnily enough, happens to be Labour. How does the Secretary of State think that has assisted local services?
Greg Clark
In their representations, councils across the country, and groups such as the Institute for Fiscal Studies, have reflected that this is a better way to allocate resources, and councils will see it as a fairer means.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
My right hon. Friend has rightly been concerned about the structure and effectiveness of local government in Birmingham. This is not a party political point, because these concerns have extended under Conservative and Labour Administrations. In his negotiations with the Birmingham improvement panel, under the excellent John Crabtree, will he bear in mind the importance of giving the new Labour leader, John Clancy, the space to implement the necessary reforms?
Greg Clark
I will. I pay tribute to John Crabtree and his fellow panellists. I am pleased to say that Birmingham City Council has made progress on the recommendations of the Kerslake report. The panel has done sterling work in helping the council to become more responsive. There remain a number of challenges that the council will have to overcome to translate its vision into reality. The panel wrote to me today suggesting that it step back and return in the autumn to report on how the council has progressed. I am happy to accept that recommendation, and I wish it well for the months ahead.
Gavin Robinson (Belfast East) (DUP)
With your kind permission, Mr Speaker, an inquiry report was launched this afternoon in Speaker’s House on better devolution and the Union. During evidence-taking sessions, the Secretary of State was kind enough to say that he would positively engage in a discussion about a city deal for Belfast. I welcome that report, and ask the Secretary of State to reaffirm his commitment to engage in those discussions about a future city deal for Belfast.
Greg Clark
I will do that with great pleasure, and I look forward to meeting the hon. Gentleman in that context.
Craig Williams (Cardiff North) (Con)
Welsh community centres, rugby clubs and pubs cannot be registered as assets of community value because the Welsh Labour Government opted out of the relevant Bill. How can the Minister help us to protect our rugby clubs, pubs and community centres in Wales?