Non-Domestic Rating (Lists) Bill

Jim McMahon Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 17th June 2019 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

First, may I refer Members to my entry in the Register of Members’ Financial Interests? I am a vice-president of the Local Government Association. We are very supportive of more frequent revaluations. There are growing calls to make sure that that happens, not only to ensure their relevance but to remove any potential sharp cliff edges—the longer a revaluation is left, the more the valuations between regions drift.

The LGA, though, would like the Government to go further, and asks them specifically to reduce the significant backlog of appeals: there are a staggering 65,000 unresolved appeals from 2010 in the system. That is important because local councils have to have £2.5 billion in reserves, in case those appeals are successful and the risk is carried by council services. The LGA also asks for the appeal period to be capped at six months. Again, that would reduce the financial exposure for which local authorities would have to make provision through their reserves. The LGA believes that that would be more appropriate.

We must consider the impact of revaluations with regard not only to the changing nature of demand—including for retail, office and other types of uses—but to the geographical shift away from our regions to London and the south-east, as shown by the most recent revaluation. The net take for the Treasury has to be broadly the same, and the revaluation reflects the increase in value in London and the reduction in the regions.

In the 2017 revaluation, it was only London that experienced an increase in all values across all sectors: retail was up by 26.2%, industry by 15.1%, office by 21.2%, and other uses by 25.7%. Every other region, bar the south-east, experienced a reduction in retail values, including by 1.2% in the west midlands and by 6.8% in the north-east. Although office values were more mixed, Yorkshire and the Humber experienced a decrease in value of 13.25%, followed by the north-east, which was down by 12.5%. A real shift is taking place away from our regions, primarily in the north, towards London and the south-east.

Let me paint what that picture means in pounds and pence, because that is what the Treasury cares about when it comes to business rates. The square mile of the City of London alone is now valued higher than the whole of Wales. Westminster City Council and Camden Council together are worth more than the whole of the north-west of England. Greater Manchester alone is valued higher than the whole of the north-east of England. We are seeing major shifts in values across the country, focusing not just on the capital but on the city bases away from our towns.

Why is that important? As more local authorities move towards business rate retention schemes, all with varying degrees of retention and because of that different degrees of exposure, there will be an impact on those with 100% retention in particular. Councils will be asking—following the next revaluation in 2021, should the Bill go through—what safety net will be in place to ensure that councils with perhaps weaker economic bases are not disadvantaged because they have opted into a business rate scheme. That is not because they have not been working hard to drive their local base—many have been doing that, which is why they went into the scheme in the first place—but because the nature of demand in those places has changed so much.

In Committee, when we have a bit of time to secure evidence to test some of these ideas out, I hope there will be a spirit of wanting to work together to try to make the system work. We have heard some pushing demands from Members who, quite rightly, recognise that council tax and business rates are both very important property taxes which also have limitations. It is important that both are sustainable and fair on the payers.

[Bob Blackman]

The hon. Gentleman provides an analysis, which I recognise, of the changes that took place during the previous revaluation. He also says that there is an opportunity for local authorities to grow their economic base. Has he done any economic analysis of how successful those areas of the country that have seen a greater fall in their valuations have been in attracting businesses, in particular where public services and Government Departments have been devolved to those areas, which can increase the economic basis of those local authorities?

[Jim McMahon]

We have done that analysis. We have spoken to local authorities that are part of the retention scheme and where they have managed to capture the uplift in growth of values. I should say, however, that in combined authority areas and city regions, where we take the locality in the round we are seeing a shift away from towns to cities. The cities are performing very well and we are seeing stability in the retail and office markets, but we are not seeing the same repeated in the neighbouring towns that can be only a mile or two up the road. In terms of net gain, a lot of them will have to bring forward their strategic plans to ensure they are developing enough big employment sites, because it will eventually come down to square footage as we see the nature of it shift.

Let us be honest: we are talking about an online sales tax. The Government have really resisted that. There are some legitimate reasons to be cautious, particularly in terms of EU legislation and what that might mean for a potential challenge, but the fact is that we have not addressed, even within the business rate regime, how completely unfair it is for the high street anchor store —John Lewis, Debenhams and so on—which brings in footfall into town centres and supports the other retailers. The Amazon big shed on the edge of the motorway pays a fraction of the business rates to occupy that space, when it is actually a more productive space direct to the consumer. There is a lot of room to go here, not just to rely on an internet sales tax, but to get around a table, work through the detail cross-party and really test what areas are not controversial. Most people who understand this recognise that the system has to catch up with the changing times. That offer has been on the table for a while and perhaps one day it will be taken up.

Non-Domestic Rating (Lists) Bill (First sitting)

Jim McMahon Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 25th June 2019 Public Bill Committees

[The Chair]

Okay. I call Jim McMahon.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Q Thank you. Welcome, Dominic. It is good to see you. What impact do your members consider that the current business rates system is having on our high streets and town centres?

Dominic Curran: An extremely adverse impact. The business rates level has risen 50% since its inception in 1990. It has risen by 10p in the pound, from 40p to just over 50p, in the last decade alone, at a time when there is, as you well know, an enormous retail transformation happening on the high street. That prohibitive level of business rates is hindering our members’ ability to invest in their stores and in the retail experience for the future that we hear so much about and that our members want to be a part of.

[Jim McMahon]

Q Quite often when we hear about the decline of the high street and the pressures in town centres, it is framed as a challenge between the on-street and the online, when actually most of your members will trade in both ways. Do your members have a view on how best to balance the shift to a growing online presence with the cost of occupying high street locations?

Dominic Curran: Yes. We have put in a submission to the Treasury Committee, which, as you will know, is holding an inquiry on the impact of business rates at the moment. Fundamentally, we think the system is broken. It needs reform. Our overarching call is for a wide-ranging, fundamental reform of the entire suite of business taxation. The problem is that, in the past, there have been reviews just of the business rate system in isolation. Given its links to local government finance, and the wider impact of how different taxes affect the ways in which businesses operate—online and offline—we need a much more wide-ranging review.

That said, we recognise that that is quite a big, long-term ask, so we have called for some immediate reforms—most importantly and immediately, a freeze in the multiplier, and then a way of using the forecast increased revenue from corporation tax to offset business rates revenue, so that we can begin to, essentially, treat all business taxes with one coherent tax system, and use one element to help another element. An online tax, which is often prayed in aid, is not the best idea. If it is an online tax on goods, it would effectively be levied 100% on the retail sector. Retail pays 25% of business rates, so if you were to use the online tax to recycle the revenue from that to help retailers, they would essentially be paying 100% of the tax and getting 25% of the benefit.

[The Chair]

May I just interrupt for a moment? Questions and answers need to be within the scope of the Bill, which is specifically about the timing of bills and business rates, and we should try to constrain ourselves to that very narrow basis and avoid talking about wider issues. Was there a supplementary within scope, Mr McMahon?

[Jim McMahon]

Q The revaluation period is being brought forward, which is a subject of the Bill. Revaluations obviously have a direct cash impact on the members that each of you represent. With the revaluation that will now take place in 2021, and the subsequent revaluations every three years, should there be scope to review the treatment of direct-to-consumer warehousing—for instance, the Amazon warehouse delivering direct to the end consumer—and the amount of business rates that they pay per square metre compared with the high street department store?

Dominic Curran: I think—

[The Chair]

Again, I do not mean to be difficult, but I am advised that consumer warehousing is not strictly within the scope of the Bill, which is on the timing. Do you want to make a comment within the scope of the Bill?

Dominic Curran: I would only say that I think that all business properties should be valued every three years, as the Bill suggests.

--- Later in debate ---

[Rishi Sunak]

Thank you.

[Jim McMahon]

Q To follow up on that point, when the revaluation is brought forward, that will not dispense with the appeals already in the system—they are still there and need to be administered—and it will just create the opportunity for further appeals. Have your members expressed any concern about the capacity in the valuation office? Do you have any concerns about what it might mean if no additional capacity is brought in and there is a more recent revaluation in 2021?

Martin McTague: I can certainly answer that. There is widespread concern about the lack of capacity in the VOA. It is bizarre that the solution seems to be that you impose a six-month cap on appeals. That is effectively saying, “It’s so difficult to get these appeals through the process that we are going to cap the time required to do it.” Yet the information is not available to the business rate payer to be able to challenge things easily. The point that you made at the beginning—that the VOA is fundamentally under-resourced to deal with this change—needs to be addressed quickly.

Edward Woodall: I agree with Martin. The feedback I get from my members is that there is a lack of capacity at the VOA to allow them to engage meaningfully in the process and talk to individuals. There is also a challenge, which we will probably come to, about the structure of the process it has developed—check, challenge, appeal—and people’s ability to interact with that, which is causing difficulties.

Dominic Curran: Absolutely. Our members are enormously frustrated with the VOA on a day-to-day basis. The appeal system is clogged up at best. It needs better resourcing. There certainly should not be a cap on appeals, in terms of the time length. But more frequent revaluations would, to an extent, reduce the need for appeals, because valuations would be less out of date, although they would probably still be somewhat out of date.

[Rishi Sunak]

Q A final quick question, Mr Curran. One of the things that the VOA has to do at the moment is to deal with appeals. You just made the point that more frequent revaluations ought to reduce the volume of appeals. Will you elaborate on that point, because, obviously, less appeal work would be an offset to the increased work of more frequent revaluations?

Dominic Curran: The argument is strongest if we were to move to a system of annual revaluations. With an annual revaluation, it almost would not be worth appealing a valuation that you thought was wrong, because it would change in a year’s time anyway. The other effect would be that the valuation probably would not be so wrong, because your annual changes would be on a much smoother line—looking at it on a graph—whereas if we revalue every seven years, as we have, you get quite a steep change. Obviously, somewhere between seven years and one year, the line gets smoother and smoother. It is a question of judgment which number we pick. Using that logic, three years should have fewer appeals than five or seven, but one year should have fewer than three. We will see how good the VOA is at dealing with three-yearly revaluations.

--- Later in debate ---

[The Chair]

Thank you. Who will be the first Member to ask a question? I call Jim McMahon.

[Jim McMahon]

Q Thank you, Chair. I thank the panel members for taking the time to come and give evidence. This is a question for each of you in your different guises. We heard in the previous evidence session that there is concern about the Valuation Office Agency’s capacity to deal with the revaluations and the appeals that may follow. Have you got any views on that?

Annie Gascoyne: I am happy to go first. It is an issue that the VOA has struggled with the number of appeals in the past. There would be a challenge with VOA capacity if we moved to annual revaluations, which is what businesses would like to see in the longer term, because it would mean that the revaluations were more in sync with the economic cycle and what businesses are able to pay. However, we think that the three-year revaluations are a good stopgap, and are something that the VOA should have the capacity to deal with. That said, there have been issues with the check, challenge, appeal system and the VOA’s IT systems, which were implemented too quickly without due thought to some of the more complex business relationships when it comes to property.

The VOA has some work to do to look at modernising its IT infrastructure, perhaps taking lessons learned from how making tax digital for VAT was implemented. We should see whether there are ways that the VOA can streamline the process so that, in the longer term, instead of three-yearly revaluations, which is what we are talking about today, we can move towards annual valuations, and potentially in the future self-assessment, which would simplify the process for everyone in the long term.

Councillor Watts: Thanks for the question, Jim. We have significant worries about the VOA’s capacity. Clearly, if we are going to give it more work, which this Bill does, it will need to be properly resourced. It is worth adding, even at this early stage, that this is not just about the VOA’s capacity to do extra work in the future. There is a very significant backlog of work stored up at the VOA and the appeals tribunal. It is a sad fact that there is more than £2.5 billion tied up in council reserves that could be spent on public services. That is currently being kept back to guard against the risk of appeals from the 2010 revaluation. Clearly, if that money is to be freed up to be used on public services, as we all want, we need to crack through the backlog of appeals rapidly, and we must recognise that more regular revaluations will lead to more work in the future. We think that more resource is needed at the VOA so it can get through what is already a pretty big mountain of work, and there will be more work if the Bill passes.

Adrian Blaylock: I agree with my colleague from the LGA. He is right that the VOA is struggling with its capacity, in terms of the backlog of appeals from the 2010 list. I do not think we have yet seen the impact of the 2017 list and the switch to the check, challenge, appeal system. Moving to three-yearly revaluations will certainly have an impact on the VOA’s resources, which has an impact on local government because of the provisions it has to set aside for loss on appeals. It is really important that the VOA is resourced sufficiently under the new CCA system to deal with the revaluations and the appeals, or whatever we want to call them, coming out of the more frequent revaluation.

[Jim McMahon]

Q My next question is probably more for Richard and Adrian, in terms of your member authorities and your members. It is about the impact of rate retention. Are you confident that the floors and ceilings are sufficient to mitigate a potential shift in values away from many of your member areas? We know that the 2017 revaluation led to significant shifts away from many regions, towards London and the south-east in particular. In fact, only London saw an increase across all value types; many other areas saw declines. Do you have concerns about what that might mean for members who are part of rate retention pilots?

Adrian Blaylock: It depends where we go in terms of rates retention. The consultation that happened in December and the switch to the alternative model for rates retention give local authorities certainty, in terms of a guaranteed baseline funding level, regardless of what a revaluation does. If we go down that route, I do not think it will be an issue, but you are right that, if you look at the impact of any revaluation, there are winners and losers in the different regions across the country. It is important that there is a rebalance of funding across local government so that no single authority is overly adversely affected. The safety net built into the current rates retention system seems to be working adequately for 50% retention. It probably needs to be reviewed as part of the move to 75%, and ultimately—hopefully—100%. I guess that will have to be part of the consultations about how we move to that sort of system.

Councillor Watts: I agree with that. There is a wider point, which I will stray into only briefly because it is not precisely the topic of the Bill. The risk we face on business rates is that we represent a council area that has seen a very rapid rise in valuations, which has put enormous pressure on many of our small and medium-sized businesses, and we are seeing holes in our high street for the first time in a while as a result of rapid increases in rates and rents. There is a disparity between the amount being paid locally and the amount being received locally, which at some point stops adding up for people. There is a challenge relating to the wider business rates system. Some areas are seeing very rapid rises in the value of property. Most businesses do not own the property they operate from, and therefore do not feel the benefit of the rise in its capital value; they just get a high rent bill as well as a high rates bill.

[Jim McMahon]

I recognise from the outset that this is slightly expanding the scope, but I will try to be disciplined about it. Do your members have a view about the treatment of plant and machinery in the revaluation?

[The Chair]

I think we cannot go there, given the timeframe. You were right to give a warning. Do you have another question that is in scope? Stephen Morgan, you have one.

--- Later in debate ---

[Graham P. Jones (Hyndburn) (Lab)]

Q Do you foresee any problems with the roll-out of the business rate retention scheme and this Bill? Do you think any anomalies or complexities will emerge from those two?

Adrian Blaylock: Nothing obvious occurs. There are a lot of unknowns about rates retention—we are talking about whether we carry on with a similar model to what we use now, just with the 75%, or whether we go for the alternative model, which was favoured in the December consultation—and what local government needs is certainty of funding, and understanding of when and how the money will come. So I do not think that the Bill particularly causes any issues, but it would be nice to get some early indication of where we are going with rates retention and how that will change.

Councillor Watts: I do not think there are any in-principle reasons why the Bill creates problems for business rates retention.

Annie Gascoyne: I agree.

[Jim McMahon]

Q Is there a call from your members for a more fundamental review of business taxation, rather than the silo approach of the review of business rates?

Annie Gascoyne: You mean beyond business rates? We would see a fundamental reform of business rates as being high on our priority list—

[The Chair]

May I just intervene? Sorry to interrupt. To be in scope, a question has to be about timing, so do you want to rephrase that question to be about the timing of change? Otherwise it is not in scope.

[Jim McMahon]

The question has been answered. I need no further response.

--- Later in debate ---

[Rishi Sunak]

No.

[Jim McMahon]

Q May I ask one question of Richard? Is the LGA making a specific request that the change of date from September to December be reviewed as part of this process?

Councillor Watts: We are, yes. In effect, our request is that we would welcome further conversations with the Government about getting a date. We understand the arguments for shifting it, because it is quite a long time and 30 September is quite early in the process. However, for one year out of three when that impacts on the potential local government announcement, we would like to understand more about how the Government would like to co-ordinate between this announcement in December and the local government spending announcement having to be earlier than it, because that is a change in precedent. We cannot push the local government spending announcement each year beyond 31 December—it is already too late where it is, given that local budget setting for any authority of size is effectively always concluded before the spending settlement on the basis of guesswork, then tweaked when the settlement is announced in the House.

[The Chair]

As there are no further questions, I thank all members of the panel for their evidence. I invite the Government Whip to move the adjournment.

Ordered, That further consideration be now adjourned. —(Jeremy Quin.)

Non-Domestic Rating (Lists) Bill (Second sitting)

Jim McMahon Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 25th June 2019 Public Bill Committees

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Gray. I hope not to detain the Committee for more than a few minutes.

I hope that by now the Committee is familiar with the three specific improvements the Bill will make to the business rates system: first, it will move the next revaluation in England and Wales to 1 April 2021; secondly, it will move the cycle for revaluations in England thereafter from every five years to every three years; and, thirdly, it will move the latest date by which draft rateable values must be prepared in England and Wales to the 31 December preceding the revaluation. I am glad to say that those substantive changes can all be found in clause 1.

To understand clause 1, we need first to consider the main primary legislation for business rates: the Local Government Finance Act 1988. Part III of the Act concerns business rates; it currently requires revaluations in England and Wales to take place every five years from 1 April 2017. Clause 1 is concerned entirely with amendments to that Act, and specifically to section 41(2A), which provides for revaluations of local rating lists in England

“on 1 April 2017 and on 1 April in every fifth year afterwards”;

to section 52(2A), which does the same for central rating lists in England; and to sections 54A(4)(b) and 54A(5)(b), which provide for revaluations of local and central rating lists in Wales on a date specified by the Welsh Government by order—1 April 2017—and

“on 1 April in every fifth year afterwards.”

That shows in black and white the delivery of our commitment to make the rating system more responsive to changes in the property market and fairer for ratepayers, and to ensure that businesses see those benefits as soon as possible.

Sections 41(5) and 52(5) of the 1988 Act set out the deadline by which draft rateable values must be provided before the revaluation. That is currently set at no later than 30 September. Clauses 1(3) and 1(6) of the Bill move the deadline to no later than 31 December. It is important to remember that that is only a deadline—it is the latest date by which draft rateable values must be prepared. The Welsh Government agree that the deadline for the draft list should be changed to 31 December. Sections 41(5) and 52(5) of the 1988 Act apply to both England and Wales, so the amendments made by clauses 1(3) and 1(6) will automatically change that date in both countries.

Clause 2 will make purely consequential amendments to primary and secondary legislation. The sections of the 1988 Act that concern the transitional arrangements made at the time of each revaluation, and the regulations made under those powers in England, reflect the existing five-year cycle of rating lists. Clause 2 will therefore amend those references to bring them in line with the new cycle of rating lists in England and Wales. It will make no other changes to the powers in those sections.

Clauses 3 and 4 are, I hope, self-explanatory. As is normal practice, the Bill will come into force two months after it is passed. It will give the valuation office the legal basis it needs to complete the valuation exercise for a revaluation in 2021. Since it has already started work on those valuations under the existing legislation and will continue that work over the coming months, there is no need to shorten the normal two-month commencement period.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

This morning, though brief and focused, we heard from representatives of the Association of Convenience Stores, the Federation of Small Businesses, the British Retail Consortium, the Confederation of British Industry, the Local Government Association, and the Chartered Institute of Public Finance and Accountancy. We place on record our thanks for the time they took to give evidence to the Committee.

The scope of the Bill is narrow, and that was reflected in the discussion we had. However, some themes came out during that session that are worth repeating. Clause 1 brings forward the new ratings list by a year, to 2021—a move that we welcome and that was welcomed by all those who gave evidence earlier today. There were calls for annual reviews, but given the concerns about capacity in the Valuation Office Agency, evolution might be more advisable, which is why we support bringing the new list forward by one year.

One element that was queried by the Local Government Association was the change from six to three months’ notice to billing authorities of the new list, pushing the deadline from “not later than September” to December. That change will hit many local authorities, as they will be presenting—or, in many cases, would intend to have already presented—their budget proposals to council. That is important because, as employers, councils have to meet their statutory obligations to their employees for any changes that might follow, whether for redundancies or any structural changes within the organisation. It is important that councils can meet the January deadline for that, so the notice period is important. I therefore ask that the Minister meets representatives of the LGA as a matter of urgency to address their concerns and decide whether something can be done to minimise the impact of that change.

Clause 2 addresses transitional relief and brings it in line with the new list proposals. There was a broader discussion, which I do not intend to pad out here, about business rates and their impact on the retail sector, the viability of businesses and the future of high streets and town centres. We share the concerns about those issues and would welcome further discussions to create a business rates system that is not only fairer but helps British businesses and industry to thrive in future, rather than—as business rates do at the moment—simply acting as a tax to occupy or exist. There are growing calls for change, and I hope they are heard and acted on by the Government beyond the scope of this Bill.

[Rishi Sunak]

I thank the hon. Gentleman for his typically thoughtful comments and join him in thanking all the witnesses we were lucky to hear from this morning.

During this morning’s session, I was pleased that there was widespread support for the principle of the Bill, namely shortening the revaluation cycle to make business rates more responsive to economic conditions. It felt like all participants agreed that three years was the right place to end up, striking an appropriate balance between responsiveness on the one hand and providing some certainty and stability for ratepayers on the other.

I am pleased to tell the hon. Gentleman that my team is already in discussions with the LGA and will continue to be so. It is also in discussions with CIPFA, which participates in a technical working group on business rates and business rate reform to ensure that the process for local authorities submitting their NNDR1 forms by the end of January is not unduly impacted by the change. As in the past, we have been able to work constructively with local government and CIPFA to ensure all the processes that need to happen for revaluation work for the sector, ratepayers and everyone else involved.

To the hon. Gentleman’s last point, and without wanting to stretch the scope of the Bill, I understand what he says. I am glad he recognises the contribution of business to our economy and society—not least providing employment and the funds we need for our public services. We will always be keen to do what we can to support business. With regard to business rates, £13 billion of various reforms have already been enacted by the Government—most recently the retail relief scheme, which provides a third discount to retail high street stores on their business rates bill and has been warmly welcomed. The Government will continue to watch that issue closely.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

Bill to be reported, without amendment.

Non-Domestic Rating (Lists) Bill

Jim McMahon Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 22nd July 2019 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

The Bill came around very quickly from Second Reading to Committee and then to Third Reading, which just shows that, when Parliament decides to do something, it can do it. Perhaps that is because we are light on business and there is time to debate and discuss these issues. I know that this is a geek interest—I take pride in being a geek and in liking data, numbers and finance, and this is an important matter. We cannot achieve the Government’s ambitions if we do not have a solid financial foundation. Business rates, although boring for many people, are actually a very important part of that. I also wish to echo the thanks to the Clerks for supporting the passage of the Bill. As always, they acted with absolute professionalism and ensured its smooth passage.

The purpose of the Bill has already been outlined, which is that it creates a three-year cycle and brings forward the revaluation period by one year. None the less, issues were raised on Second Reading and in Committee. I am slightly fearful that the Minister will be whisked away to another Department very shortly, and that we will lose his consistency and thoughtfulness. It matters not only that we pass the legislation in this place, but that we manage the transitional arrangements and the impact that naturally follows. We need to see what transitional arrangements will be in place. We need to ensure not only that the valuation office has capacity and is encouraged to deal with the backlog of 60,000 appeals going back to 2010, but that it has the people to deal with a new revaluation in the appeals process that will come. We need to make sure that the transitional arrangements are there, so that those who are adversely affected are able to manage that transition.

As part of the wider review, we need to ensure that we are clocking the geographical shift in valuations that takes place with every revaluation, because if we are going to move to 50%, 75% or 100% retention, that will naturally have an impact on the financial stability of local authorities that are part of those schemes. If, after every revaluation, we see a transition to the values of London and the south-east, that will not help build the northern powerhouse, which is a shared ambition for everyone who cares about the whole of the UK benefiting from the country moving forward.

We also need a more fundamental review of local government finance. I really feel sorry for local government Ministers. It is not right that the Treasury often has a closed mind to their funding issues, that they are told to deal with the envelope of money that they have, and that they are always last in the queue, behind the NHS, the police service and other more pressing Departments. The truth is that, if we do not get this right, older people will not get the care they need, younger people will be put at risk, and, critically for democracy, people will question why they are paying more and more council tax for less and less of the neighbourhood services that everybody enjoys universally. We on the Labour Benches will be holding our own review.

I thank the Minister for his approach this Bill, and I look forward to scrutinising it through the transitional arrangements as we approach the revaluation.

Question put and agreed to.

Bill accordingly read the Third time and passed.