Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Jim McMahon Excerpts

Tuesday 16th October 2018 Commons Chamber

[Rishi Sunak]

I agree that land banking should be looked into. The hon. Lady will be aware that my hon. Friend the Member for North Dorset (Simon Hoare) is currently looking at that issue. Interim findings have been published and more findings will be coming out shortly. I hope that she will be happy to wait for the findings of those reports.

Nor are we proposing to change any other arrangements for charging premiums. It will rightly remain a matter for local authorities individually to decide whether and what premium to charge. In making these decisions, local authorities should of course consider local circumstances, as we have discussed, as well as the guidance issued by the Government.

It is right that we target particularly the homes that are empty for excessively long periods in this way. To be sure, they are likely to be few in number— potentially 11,000, as we heard from my hon. Friend the Member for Walsall North (Eddie Hughes)—but where they exist, they can indeed be a nuisance and a blight on their community. Such properties may even become sites of crime and antisocial behaviour. It is right that local authorities are equipped with greater powers in these difficult cases, where a 100% premium may be ineffective. We are proposing that these higher premiums come into effect slightly later than the original measure, which was announced at last year’s autumn Budget. This will give homeowners sufficient notice of the change. The 200% premiums will come into effect from 1 April 2020, and the 300% premiums a year later. The original proposal, of which people have had good notice, will come into effect from 1 April 2019, as planned.

We recognise the crucial importance of ensuring that premiums are applied fairly. That is why in 2013 the Government published guidance reminding local authorities to take into account the specific reasons a local property is empty, as indeed we heard from my hon. Friend the Member for Harrow East (Bob Blackman). In the light of this amendment, I can confirm that the Government will take a fresh look at the guidance with the aim of publishing revised guidance ahead of the introduction of the 200% and 300% premiums. This refreshed guidance will be subject to consultation, of course, and we will welcome the opportunity to benefit from the experience of local authorities, council tax payers and others when the time comes. In particular, we are keen to ensure that the guidance clarifies that premiums must be applied with due consideration to issues facing low-demand areas and cases of hardship. We expect to revisit the wording of the guidance to set out clearly the Government’s expectation that premiums are not applied where homeowners can demonstrate that their properties are genuinely on the market for rent or sale and appropriately priced.

Another area we expect to consider is cases where homeowners, as my hon. Friend the Member for Harrow East noted, are struggling to complete or afford renovations that are necessary before the property can be occupied or sold on and where they can demonstrate progress and hardship.

I am delighted to bring forward this amendment, which has been termed the escalator amendment. I am grateful to all colleagues, the Select Committee and partners in the rating agencies for helping to get this amendment and this Bill to the House. By strengthening the incentive for owners of long-term empty properties to bring them back into use, this amendment will surely come as good news for local government, for families seeking a place to live and for the affected local communities as a whole. I commend it to the House.

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

It takes a very good education to be able to talk at length without saying much at all.

We are at the end of a process as we reflect on the Lords amendment, which I should say is entirely in line with Labour’s manifesto. If anything, it could have gone much further. While the Lords have suggested a 10-year period regarding the charge on empty properties, the Labour manifesto proposed that after a year, because we recognise not only that there are lots of people on the housing waiting list and many people who are homeless—sofa-surfing and on the streets—but that these properties are often a blight on their local communities. It is right that the owners of the properties are held to account, and a charge is one way of doing so. Of course we welcome the amendment, but we would have liked it to go much further.

We have heard in Committee and in the Chamber that the staircase tax was about listening to the interests of business and how the business rates system was adversely affecting them, but it is slightly odd that of all the issues that businesses are raising when it comes to business rates, this is the sole one that has been picked out for this place to address. There is absolutely nothing about the condition of our high streets and town centres, and nothing about business rates’ impact on our pubs. There is no recognition that while we have rural rate relief for the last pub in a village, council estates are not given the same luxury for the last pub on the estate. Businesses are raising plenty of important issues.

Fundamentally, we see with rates the same thing that we are seeing with council tax: we are incrementally putting more and more pressure on what is a diminishing resource in many places. We have seen that with the revaluation, where the value shifted to London and the south-east, and certainly away from my region. The Conservative party has been in power for 10 years, through the coalition and more recently with the support of the Democratic Unionist party, and the housing shame in this country is a national scandal.

[Kevin Hollinrake]

The hon. Gentleman says that the Government are doing nothing to tackle some of the issues on the high street. Is he not aware of the Government inquiry that is led by Sir John Timpson on the difficulties the high street is facing and what we should do about it? Is it not a sensible starting point that we gather some evidence before we decide what we should do?

[Jim McMahon]

If all we had was time, we could carry out an inquiry and a review every few months, but the fact is that that leads to almost no change. Our tax base system is getting to a point where it will not be fit for purpose. How can we have a situation where someone’s ability to get adult social care in later life will be predicated on their local authority’s ability to raise money from a diminishing base of council tax and business rates, thereby putting more and more pressure on the communities that can least afford it? How can it be right that a child’s ability to get the protection they need will be based on house values in 1991 when the Government walk off the pitch and end revenue support grant completely? How can that be fair?

[Kevin Hollinrake]

The hon. Gentleman is being generous in giving way. Will he set out his party’s policies on rejuvenating the high street and replacing business rates?

--- Later in debate ---

[Mr Deputy Speaker]

I know. I have allowed Members to generalise. I do not want to narrow down what the shadow Minister has to say. I allowed the Minister to spread his wings—perhaps I was a bit too open in allowing that. I do not want to concentrate on just one area.

[Jim McMahon]

Thank you, Mr Deputy Speaker. I will not abuse the purpose of the debate; I will stick to the Bill and the Lords amendment.

Many of these issues on council tax and business rates need not be party political. Most people recognise that high streets and town centres are at a point where they cannot take much more pressure. Most people recognise that council tax is taking on a disproportionate burden to fund local public services and, increasingly, people services, too. These are not party political points; they are self-evident when we see the condition of council budgets, and our town and city centres and high streets.

I have offered from this Dispatch Box to sit down with the Minister and work out where there is common ground and where we ought to be working together. I am afraid that all these offers of visits to constituencies around the country are taking away time that could be spent in this place working through some of these complex issues, in which have been ignored for so long.

Clearly, we are not going to oppose the Bill, in which very sensible steps are being taken. We support the Lords amendment, so we do not suggest opposing that either. However, we do want a bit more courage from the Department. There is a brand-new Secretary of State in place, who I hope has more access to the door of No. 11 than previously and can finally get a conversation about how we can properly fund local government services. We ought to be working together to find a long-term, sustainable solution to ensure that every man, woman and child right across the country gets the public services they need and deserve.