English Devolution

Debate between Jim McMahon and Jayne Kirkham

Monday 16th December 2024 Commons Chamber

[Jim McMahon]

That is a fair point. I am losing track of the number of MPs who are standing up to declare they are still councillors, although I recognise there is a transition—I went through it myself—and there may be an overlap between being a councillor and a Member of Parliament. On the detail of individual counties, it is for local areas to make a submission to Government, and for the Government to assess the proposals that come forward. The Government do not have a plan on a map for the hon. Lady’s county, but we expect that the county and the district will get together to work out a proposal that they can accept and submit to Government, which we can then review.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Cornwall will welcome further devolution. We are a long way from London, but I want to build on the question about town councils. In places like Cornwall, cuts to unitary councils have meant town councils have already taken on a lot of responsibility, so how does the Minister see those town councils continuing in the future?

[Jim McMahon]

When Labour was last in government, we brought forward landmark legislation to create the Mayor of London, Parliaments in Scotland and Wales and the Assembly in Northern Ireland. The quality council status was introduced for parish and town councils, and powers on wellbeing and other matters were given to local government. The previous Labour Government recognised, just as this Government recognise, that devolution has to work from the top to the bottom and the right powers have to be in the right places. At a neighbourhood level, we see town and parish councils playing a critical role in devolution, and we look forward to further discussions with the sector.

Non-Domestic Rating (Multipliers and Private Schools) Bill (First sitting)

Debate between Jim McMahon and Jayne Kirkham

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Vikki Slade]

Q In Northern Ireland, there is a single regional rate and then a local levy. Do you have views about whether there should be any local influence in terms of these determinants reflecting higher rents, particularly in the south-east or south-west, that put lots of businesses above the £51,000 threshold?

Stuart Adam: There are a number of questions. One is how far the rates should be set locally versus centrally. Obviously there was a history there of them being centralised in 1990. There is a question as to how much localism you want. If you are going to have local taxes, property taxes are a pretty good choice—housing more so than business property taxes. But if you wanted to localise more taxes, business rates would not be a bad choice. There might be things you can do along the lines that we have seen already about, for example, having a ballot of local businesses as a requirement and that kind of thing. There is a case for whether it should be local or central—I do not have a strong view either way.

There is a question as to how far the revenues should be redistributed across the country and whether areas that get more business rates revenue should have more funding as a result. That, again, comes into a broader question about the local government finance system. It is not obvious that just happening to have more high value businesses in an area is a good reason for that area to get more revenue. I think there is a better argument for things such as business rates retention, where you want to give local authorities some incentives, some reward, for having more businesses, encouraging them and generating local economic growth and so on.

There is then a question about whether, even if it is set centrally, the rates and thresholds of business rates should be different across the country. It is not obvious to me that there is a good argument for that, but it is not obvious to me that there is a good argument for it being different across different sizes of business or sectors, either. I would not rule out that you could make a case for it. In those other cases in terms of smaller businesses and retail, hospitality and leisure, you can make a case for it. I am not saying that you should never have any variation, but I would want to hear that argument made clearly. In terms of variation across areas, I do not think I have heard that argument made.

[Jayne Kirkham]

Q I am from Cornwall, where we have full business rates retention, so that puts a slightly different spin on it. Given that that varies across the country, maybe you could mention that. You talked about high street rents going up or down. I come from a place where there are lots of seaside towns and limited space by the water. A lot of our properties are owned by faceless corporations or insurance funds, so the rents are not remotely responsive. They have stayed high for a long time because they are seen as an asset on a balance sheet. We have struggled very much with that. For some places—maybe you would disagree—the business rates are even more important because the rents either take a very long time to have an impact or we are just left with empty properties for a very long time. Would you agree?

Stuart Adam: I think I would disagree. Actually, it is possibly even more true in the cases where properties are owned by big, faceless corporations, because clearly they will want to set the highest rent they can get away with, but the amount of rent they can get away with will depend on the demand for that property, and the demand for the property depends on the level of business rates and rent attached to it.

You would expect rents to adjust in the long run. How long “the long run” is is an interesting question. There is some evidence that it starts to happen in a relatively short period—something like three or four years—but the evidence on that is not great. The rent adjustment probably happens more quickly than it would have 20 or 30 years ago, because commercial rent contracts have become shorter and there is more use of things like commercial voluntary arrangements, which allow rents to adjust more quickly. It can take a fair number of years before rents are renegotiated, contracts come to an end and so on, but I would still very much expect it to happen.

[Jim McMahon]

Q Is part of the tension not that the question described a broken market, but that response describes a functioning market? Is the real issue that many institutional investors would sooner have an empty property with a notional rent attached to it, even if the rent is never achieved, than accept a tenant for a lower rent that would have an impact on their overall balance sheet? Is there not a tension there?

Stuart Adam: Yes, I think that is right. There is an interesting question as to why so many properties are left empty for so long, when it would seem to be in the landlord’s interest to have anyone in there paying them something, rather than no one in there paying them anything. There are certainly aspects in which the market does not function well, but on the whole it still looks to me like a market where, basically, prices are determined by supply and demand, and such evidence as we have seems to support that.

Non-Domestic Rating (Multipliers and Private Schools) Bill (Second sitting)

Debate between Jim McMahon and Jayne Kirkham

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Jim McMahon]

It is almost the opposite, really. Given the context that has been outlined, this is the respite that the industry has been calling for. If we can keep to the scope of the Bill, and what it provides for, that would be helpful.

[Jayne Kirkham]

Q I have a quick question. I am glad you are here, Mr Lord, because we were talking about the super tax and the £500,000 limit. I am from Cornwall, so I completely understand what you said about large hotels. Will other parts of the leisure sector, such as theme parks, the night time economy, music venues and theatres, be impacted by the super-rate?

Sacha Lord: Nightclubs will certainly be impacted. Obviously, a nightclub is a much larger space than a pub, so sadly they will suffer under this legislation.