Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Jim McMahon Excerpts

Ping Pong: House of Commons
Tuesday 23rd January 2018 Commons Chamber

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

I congratulate the new Minister on his promotion. I look forward to working with him on matters of common interest such as local government finance, which is a niche subject that does not always attract wide attention, but it is important, and it is important that we see reform. I made that offer to his predecessor, and most of the issues are not partisan at all. They are technocratic but essential, and if there is room for us to work together, we should seek to do so.

I am pleased to see the Bill return having been amended in the Lords, and I am pleased that the Government have received the amendments in the way they have. As we have seen in our debates, this is not necessarily a subject that gets Members excited or that results in mass attendance, but the people who do attend understand how important it is. This financial relief is intended to ensure that as many parts of England and Wales as possible benefit from high-speed fibre broadband. A financial incentive is an important mechanism for achieving some of that.

We were very probing in Committee and, unsurprisingly, we will be looking to see how the Bill works in practice. In particular, can we ensure that this is not just a tax relief for the big providers and that it gets to the smaller providers, too? Can we ensure it has a net effect on the extension of fibre broadband, or will it basically provide a subsidy for installations that would have happened regardless? Have we been able to reach a position where the providers themselves are satisfied that the Bill goes some way towards balancing the revaluation that they met with a degree of concern? I read recently in the Financial Times that BT and Virgin had hinted at the possibility of considering legal action against the revaluation, and I am interested to know the outcome.

Fundamentally, the Bill does two things. First, it rescues an element of the Finance Bill that fell when the election was called. The Bill contained many important reforms that were not contentious or party political but would have allowed local government finance to catch up with the changing times. I encourage the Minister to look at other provisions in the Bill to see what else could be brought forward to benefit local government.

Secondly, the measure proves that the Government can look at financial incentives for business growth, but business rates, of course, cover a wide range of business activity. It has been a long-standing criticism that we have not yet managed to address the impact of the treatment of plant and machinery, for instance, on business investment in new technologies and in new plant and machinery in those premises.

That has also been a concern on our high streets. When banks and building societies close, they are often the only provider of a cash machine in town. When a local convenience store agrees to take on the cash machine, it generally finds itself in a worse position at the end, despite providing a community service, because the turnover at the cashpoint will count towards its rateable value.

I raise those two points because I think there is a demand in industry and the community to ensure that business rates add value to our communities, rather than detract from them. As we embark on Brexit, we need to ensure that our country is in the most robust position possible to attract investment and ensure that we have strong infrastructure.

Finally, I pay tribute to Members in the other place, particularly Lord Kennedy, who spent a great deal of time on the issue and was involved in amendment 2. Let us see whether it makes a difference on the ground, because we pass legislation here not for the sake of it, but to make a material difference to public policy and the community. I will be waiting with interest to see whether this has a net effect on infrastructure investment.

[Rishi Sunak]

I thank the hon. Member for Oldham West and Royton (Jim McMahon) for his kind words of welcome. He has a long and distinguished track record in local government, and I very much look forward to working with him in the constructive manner he outlined. He made a couple of points that I would like to address briefly. The first point was about who is eligible for the relief. As he knows, it is available for any company deploying new fibre. One of the expectations and hopes for the relief is that it will bring more alternative and smaller providers into the market. We will be watching that closely, as I know he will, because we would all welcome a broader diversity of suppliers.

The hon. Gentleman made a good point about the relief being gamed, and ensuring that it is targeted specifically at new fibre deployments. That was raised in the Commons stages by my right hon. Friend the Member for Wantage (Mr Vaizey), and indeed in the other place by Baroness Harding of Winscombe. I am pleased to tell the hon. Gentleman that, following those exchanges, my Department worked extensively with Gamma Telecom and Ofcom to conduct a detailed study of the potential for the relief to be gamed. The results of that analysis clearly support the conclusion that, based on the evidence available to date, neither the Government nor Ofcom expect the rate relief for new fibre to give rise to gaming in the system. Without going into the details, simply the cost of deploying new fibre, withdrawing dark fibre, opening up the ducts and then reconnecting everything would in almost all cases be more expensive that the saving from business rates.

The hon. Gentleman mentioned other measures in the Local Government Finance Bill and the importance of ensuring that we have a business rates system that supports economic growth. I wholeheartedly agree with him and am keen to use the opportunity for the business rates reset, the revaluation and the fair funding formula to ensure that our financial system does indeed support local authorities in their aspirations to grow their local economies.

I put on record my thanks to Members in the other place and, of course, the officials who brought me up to speed on the legislation incredibly quickly. I also thank my predecessor in this role, my hon. Friend the Member for Nuneaton (Mr Jones), who did so much to get the Bill to the point at which we are in a position to approve it. As I have said, demands on broadband are doubling every couple of years. It is vital that we stay ahead of that need and move quickly to implement the relief scheme that has been promised. I am delighted that we are making good progress on the draft regulations, which will be implemented swiftly. I am grateful to Members in this House and in the other place for the swift progress we have made. This is only one small part of the Government’s strategy, but it is an important one called for by all stakeholders.

Lords amendment 1 agreed to, with Commons financial privilege waived.

Lords amendments 2 to 13 agreed to, with Commons financial privilege waived.

Yorkshire Devolution

Jim McMahon Excerpts

Tuesday 9th January 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on bringing this timely and important debate on English devolution. What this Parliament has not done sufficiently is hear what the public were saying during the EU referendum campaign. We are going through the transactional debate with the European Union about trade terms and our future relationship in a way that most people feel completely disconnected from. What people were saying during the campaign was that they are sick and tired of accepting that the way things have been done for generations is going to be continued in the future.

The real, lived experience for many people in this country is that their communities and families have been left behind. The industries that used to support our towns and that many of our towns and cities were built on do not exist anymore, and the well-paid, decent working-class jobs are not there for future generations as they were for the generations before them. People growing up and raising families in those areas have a right to say that they will not accept that settlement.

Government cannot continue to command and control from this place, misguidedly believing that that will change the way the country works in every community across our diverse and complex land. The problem with devolution as it stands is, first, that there is an absence of a clear national framework, which means it is anybody’s guess as to how these devolution deals have been constructed, how component authorities have been included and how they will be resourced in the future.

There have been contradictory approaches from the Government in terms of where power sits. In some areas, we see skills being devolved but educational powers taken away and centralised in this place. Local authorities’ involvement in local schools is completely taken away, but then they are told to sort out the schools’ problems and fix a broken system for young people who have been let down.

I am not one for regional assemblies and regional government. There is a tendency in the new structure for power to be taken from the ground upwards, rather than given away from the centre. That is not in the spirit of devolution. I was resistant to regional assemblies because I saw that taking place. Yorkshire is the exception to that rule. What is devolution meant to be about? Devolution ought to be about people and place. Before we construct any governance arrangement, we ought to pay proper consideration to the sense of belonging that people feel to their community.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Jim McMahon]

I will not, because I am conscious of the limited time we have.

Members will know from the areas they represent that many of our communities have not got over the 1974 reorganisation that created metropolitan boroughs. They will hark back to the days when their local district council used to exist and their sense of belonging. The one thing that would survive all that reorganisation in Yorkshire is the sense of being Yorkshire. We ought to take into account that very strong and powerful sense of belonging.

The other thing is that the foundations of devolution are extremely weak. The cuts that have been made to many local authorities across Yorkshire mean that their basic everyday survival is at risk. Adult social care and children’s safeguarding pressures are significant, and councils are looking to the future and wondering how they are going to make ends meet.

The deal that has been on the table so far has been crumbs off the table. The Government are saying, “If you’re willing to come round, there are a few million pounds for housing and for transport.” The regional imbalances will continue—London gets the lion’s share and our regions get left behind—but that cannot be the future.

From the Opposition Front Bench, I want to put an offer on the table. This is our position. We have heard from some parts of Yorkshire about an interest in looking at a “one Yorkshire” deal, but we have not yet tested the appetite across Yorkshire for what could be a comprehensive deal covering the whole region. My offer to the Minister is this: why do the Government not look, in a proactive way, at a Yorkshire-wide referendum to ask people what they want? If devolution means anything, it would be the community, from the grassroots, deciding for themselves. That will be a different devolution —I am not proposing the same devolution we see in Greater Manchester, Merseyside, the West Midlands and other areas.

That cannot be at the cost of local authorities. We need to properly work out what the role of those component local authorities is. I would strongly argue that the existing infrastructure of local government is more ready to receive greater powers, greater freedoms and greater funding to deliver local services than central Government, but that can happen only if the Government are committed. What is wrong with asking people what they want?