Local Government Finance Bill

Jim Fitzpatrick Excerpts

Tuesday 10th January 2012 Commons Chamber

[Mr Pickles]

I do not know whether colleagues were listening but I heard an Opposition Member say that economic success was a southern phenomenon. If that is what Opposition Members think, they should seriously consider whether they are doing their electorate a service.

If our reforms had been in place over the past five years—since the last revaluation cycle—places such as Liverpool, Doncaster, Durham and north and south Tyneside would have benefited, because their growth in business rates outstripped the national average.

Most of all, however, the grumblers have missed the key point. This is not simply about redistributing the proceeds of growth. If these reforms lead to every council working as hard as possible to help business to thrive, there is the potential to increase overall growth.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

As part of the south-east phenomenon—the area that I represent covers Canary Wharf and the London borough of Tower Hamlets—my constituency would naturally, I assume, be a winner from these reforms. Has the Secretary of State seen the briefing issued today by London Councils to London MPs? It welcomes the retention of part of the business rate but then states:

“However, the Bill as drafted creates a fiendishly complex system in which the level of the business rate incentive is uncertain and unpredictable”.

Will he respond to that concern from London Councils?

[Mr Pickles]

Yes, of course. The idea is to give the maximum incentive to councils. That is how the system is being devised. However, it is much simpler than the existing system, which is just about impenetrable. Indeed, London Councils considered that point some time ago when it described the four—[Interruption.] Ah, I have it in front of me. How very helpful! This is marvellous. Bob always comes up trumps. This quote comes from the London Councils’ report, “Four Block Muddle”:

“The current formula grant system…lacks transparency and is inherently unstable and unpredictable, generating fluctuations in grant allocation that defy logic… Even finance experts, let alone members of the public, struggle to understand the working of this complex system.”

So here we are introducing a much better system, and, to coin a phrase, I would have expected local councils to rejoice, rejoice, rejoice.