Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Jim McMahon Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 5th September 2017 Commons Chamber

[Mr Jones]

I am sure that my right hon. Friend the Minister will be very happy to talk to my hon. Friend about this issue.

As I have said, through our work with the sector and the Valuation Office Agency, we believe that we have found a clear way to capture the concept of new fibre. We have set this out in our draft regulations and the consultation document that we published last week. However, this is a technical and fast-moving sector, so we will keep the operation of the relief under review to ensure that it is working as planned and that the regulations keep pace with the continuing technical advances and changes in the industry. Accordingly, it will remain important that we have the powers available to amend the operation of the relief scheme over time. The powers in the clauses will also allow the Secretary of State to determine the level of relief to be awarded. As I have said, the Government intend to allow telecoms operators 100% relief, but only for new fibre. That new fibre will of course form part of existing telecom networks with existing ratings assessments.

Through the operation of this scheme, we intend to ensure that the relief is awarded only in respect of new fibre and not existing fibre. To achieve this, the powers in the clauses will allow us to set, by a formula contained in regulations, the correct level of relief for each property, reflecting the amount of their network that qualifies for the relief. This will be based on a certificate of the amount of rateable value that it appears to the valuation officer is attributable to the new fibre. The consultation document we published last week explains how, when taken together, the formula in the Bill and the formula in the draft regulations will deliver the correct relief for a property.

As I have said, these provisions are mirrored in the first three clauses of the Bill. Sometimes the letters in the formula differ, but that is merely to conform to existing lettering in the sections into which the formula will be introduced. Hon. Members will have noticed that clause 1 includes a table referring to different subsections. In theory, there will be instances where a property could be eligible for the new fibre relief but also for another such as charitable relief, although we believe this to be extremely unlikely. However, for completeness, the table in clause 1 makes it clear which relief should apply. No such conflict can arise for unoccupied properties or properties on the central list, so the table appears only in clause 1. The rules we have adopted here are consistent with the existing hierarchy of reliefs in the business rates system. Charity relief will apply above all others, and then reliefs such as small business rate relief. The relief for new fibre will apply only where no other relief applies.

Clause 4 gives effect to the schedule to the Bill. As I have described, the Bill makes a number of amendments to different sections of the Local Government Finance Act 1988. Most of the amendments in the schedule are to that Act, and are necessary merely to ensure that those provisions continue to make sense and operate as intended. We are also in the schedule making consequential changes to the Business Rate Supplements Act 2009. Ratepayers entitled to mandatory reliefs in the main business rates system are also entitled to the same relief against the business rate supplement currently applied to larger properties in London. The Bill ensures that that continues to apply for the new fibre relief through these consequential amendments.

Clause 4 also includes the normal power to make regulations for other consequential provisions. We intend to use these powers to make consequential changes to the regulations that govern the transitional relief scheme. This will ensure that the relief is also available for those ratepayers who are either receiving transitional relief or whose reductions from the revaluation are being capped to fund the transitional relief.

Clause 5 provides the normal authority from Parliament that is necessary when making provisions that create a charge on public funds.

Clause 6 provides that the Bill applies to England and Wales. Business rates policy is devolved, so it will be for the Welsh Government to consider whether to introduce a similar relief. The Welsh Assembly Government have asked for the powers in this Bill to apply to Wales, although it will of course be a matter for Welsh Ministers to exercise those powers in relation to Wales. In Scotland and Northern Ireland, business rates legislation is made in their own Parliaments, so again it will be a matter for them whether to proceed with this measure. However, under the Barnett formula, Wales, Scotland and Northern Ireland will receive their share of the funding of the relief. As we have discussed, the relief for new fibre will apply from 1 April 2017, so clause 6 also provides that the amendments and powers in the Bill can take effect retrospectively for the financial year commencing 1 April 2017.

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

We have just had a run-through of what the Bill contains, and by and large we welcome it. It is one of the remnants of the Local Government Finance Bill, which fell when the general election was called, and which contained things that industry and local government leaders wanted to see introduced. This could well be the first of several proposals, and I would welcome a conversation about that.

--- Later in debate ---

[Jim McMahon]

I share the vote of thanks to the range of people who have assisted the Bill. A great deal of work went on in the background to ensure the support of Members and the passage of the Bill. I would like to thank the Public Bill Office for the support it gave to the Opposition during the Committee stage, which was a great help.

The Opposition welcome this infrastructure, which aims to improve our connectivity. We know that improved connectivity is important for economic growth, more jobs and improved links between business hubs and individuals alike. One slight regret, which is a major regret for the people affected, is that nothing in the Bill addresses the divide between urban areas and our rural communities. With 95% of people connected, it is a bitter pill for the 5% who live in areas that are not connected. People in those areas do not want warm words about the amounts of money being given away, but a plan in place to say when high-speed will reach them. Self-employment is on the rise, so access to decent IT in rural communities is essential. It is not in the Bill, but I urge the Government to give more detail on what they are going to do to encourage that roll-out, either in terms of allocation or through the soft relationship they are developing with providers.

The Labour party is committed to focusing on improvements to connectivity and infrastructure in rural communities, many of which feel they have been taken for granted by the Government. They have suffered chronic underinvestment for far too long. We know there are different demands, different drivers and different pressures on our communities, but the decisions we make today should not be just about catching up with infrastructure developed five or 10 years ago; it ought to be about preparing the country for the next 10, 20 or 30 years ahead and for the next century. Many communities do not feel that they are a part of such consideration.

The Prime Minister previously called for co-operation across political parties. Over the summer, I reflected on 18 months of being an MP, after previously being a councillor and council leader for 13 years. To make a council and a place work, people need a common vision of what an area can be and they need to know what part they can play in taking it forward. I do not see that taking place nationally. It seems as though party politics is far more important than the people we all, collectively, represent. Getting one up on the Opposition or the Member sat across the Benches seems to be worth more than delivering investment on the ground for the very diverse communities we represent.

I should say that that is not my personal style at all. I am always more than happy to work across political parties if it means, ultimately, that we have better government for all the communities we represent. That is an offer. I do not intend to do the Government’s job for them—I am not a taxi for hire in that sense—but I am keen to ensure that the voice of industry, local government and our many diverse communities really feature in policy as it comes through.

There is one area that we need to address. This is not party political, although I do have a view about what the Local Government Finance Bill included and did not include in terms of some of the safety nets and safeguards required. Our local councils cannot continue with their current funding settlement. We know that demand for adult social care is outstripping the money that they have, we know that they are stripping away frontline services just to keep their heads above water, and we know that that is just not sustainable. People are being expected to pay more and more council tax for what they perceive to be fewer and fewer of the services on which they rely, and which they consider to be vital and the foundation of their communities. Surely, if we believe in a decent country in which people can get on and public service is the foundation stone, we must not stand by and watch those people fall over.

This is, in effect, a plea. We have seen the presentation of one element of the Local Government Finance Bill; let us now see the presentation of a scheduled series of Bills that will really address chronic underfunding and the short-term nature of local government finance.