Local Government Finance

Jackie Doyle-Price Excerpts

Monday 18th July 2011 Commons Chamber

[Mr Pickles]

I have obtained the briefing from the Association of North East Councils that the hon. Lady has just cited. It takes no account whatever of the fact that there is a tariff and a top-up. Opposition Members seem to think that we are dealing with some kind of Monopoly board on which local authorities can decide between retail and other developments. The truth is that the market will decide these things. Where the local authorities fit in is by not getting in the way of the market but working with it and deciding to go for growth. Opposition Members cannot honestly believe that local authorities can just sit there and say, “We’ll have a supermarket on every corner.” They cannot seriously believe that that is what the real world is like. Our proposals will remove a lot of the obstacles to growth.

[Jackie Doyle-Price (Thurrock) (Con)]

My borough of Thurrock currently collects £92 million a year in business rates, but keeps only £52 million. Much of that contribution is generated by two areas, West Thurrock and Tilbury, which also happen to be the least affluent parts of my constituency. Does my right hon. Friend agree that it is much fairer if those communities benefit from the business rates that are generated in their area?

[Mr Pickles]

My hon. Friend makes a reasonable point. It has been said many times at this Dispatch Box that the problem with the existing system is that it does not take into consideration the difference between poverty and sparsity. There are whole sections of Essex and the Thames corridor where poverty exists but is simply not recognised by the formula. Our system will react very quickly, because the business rate value can show, in year, where things are going right and where they are going wrong. Many elements of the existing formula are rather outdated and very unreliable.