Birmingham City Council

Debate between Jim McMahon and Kevin Hollinrake

Monday 31st March 2025 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I thank the Minister for advance sight of the statement. I am sure that the fact that both my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) and I tabled an urgent question on this issue played a part in the Minister coming to the House today. He has said nothing on this matter for the 20 days in which it has been a live issue. It is shameful—a national embarrassment—that one of our nation’s great cities, our second city, finds itself in such a bleak situation.

As the Minister admits, the problem is of the council’s own making. It is a result of the flawed deal with Unite back in 2017, which led to legal action over equal pay, but it is the people who pay the price. We have had mountains of rubbish blighting the streets of Birmingham for more than 20 days, and there is no end in sight to the dispute with Labour’s union paymasters, Unite. Almost every area is plagued by overflowing bins, rats the size of cats, and opportunistic fly-tippers exploiting the chaos to turn open spaces into dumping grounds. That is the reality of Labour in local government.

From Edgbaston to Sutton Coldfield, from Yardley to Erdington, and from Balsall Heath to Sparkhill, the piles of waste grow even higher. This is a public health emergency, as the hon. Member for Birmingham Edgbaston (Preet Kaur Gill) has conceded. Even the Labour Mayor of the West Midlands has said that he is “fed up” with waste piling up and the streets being filthy. That is why we call for a Cobra-led response. This issue demands a co-ordinated effort across local and national Government, harnessing the expertise of public health officials, civil contingencies professionals and emergency services.

We call on the Government to cut councillor allowances for the cabinet members who got Birmingham into this mess, and we urge the Government to appoint binmen from the private sector to clear up Labour’s mess. Where are Labour’s MPs today? I can only see one on the Government Benches. [Interruption.] Okay, there are two here, out of 10. While they have been campaigning for an airport in Kashmir, we are proposing workable solutions.

The Minister talks about the calm leadership of Councillor Cotton. What local residents need is action, not buzzwords, both from the local leadership and from central Government. He says that Ministers cannot legally intervene in this industrial action. Is he honestly saying that he has no influence with the union involved, Unite, which is complicitly holding the city hostage, and which contributed £10,000 to the Deputy Prime Minister’s election war chest? Surely she is now duty-bound to pick up the phone and speak truth to the real power behind the Labour throne, the unions.

Incredibly, Unite is calling on central Government not to live within its means, but to make hundreds of millions of pounds available to the council. Is that something that the Minister is considering? He talks about an increase of 9.8%, or £131 million, in the council’s core spending power for the forthcoming year. Will he confirm that a significant part of that is being raised by means of a council tax increase of 7.8%, and that that is a clear breach of the Prime Minister’s pledge to freeze council tax this year?

I pay particular tribute to Councillor Bobby Alden and the Birmingham Conservatives who, alongside my hon. Friend the Member for Sutton Coalfield, have been doggedly holding the council’s incompetent leadership to account. They have clear solutions to this crisis. Now that Birmingham has today declared a major incident, leading to the availability of new mechanisms, can the Minister confirm that he will meet them to ensure that those mechanisms are considered?

I find it extraordinary that the Minister should say that Birmingham city council has not yet requested national support. Will he not insist that it do so immediately? He also said that he would meet local leaders and commissioners. Given that this crisis has been ongoing for 20 days and counting, why has he not already met those local leaders, and when will he do so? Will it be this very week?

[Jim McMahon]

Well, well. No one listening to that response would think that the Conservative Government had been in government for 14 years, and were in office when Birmingham had to come to them for financial support. But Birmingham was not alone, was it? Councils were falling like dominoes because of the last Government’s chronic underfunding. The Conservatives talk about Kashmir; they left a cash crisis that affected every council. Every single council, whether it was Labour, Conservative or Liberal Democrat, was let down by the Conservative Government. The Conservatives cannot even look their own councils in the eye. When it comes to reorganisation, local leaders who are doing what is needed for their area and showing local leadership have been being undermined by the national leadership. They are lions led by donkeys.

Beyond the party political nonsense that has been deployed, surely we can all agree that we care about the people of Birmingham and want this vital public service restored. Surely we all agree that given the last Government’s intervention in Birmingham, the journey of improvement is fragile. Yes, improvements have been made, but we have to maintain our course. The Conservatives must also accept that one of the biggest barriers to settling the council and giving it long-term stability was the storing up of equal pay liabilities. Resolving this issue is critical, not just for the council but for the people of Birmingham.

I can assure the hon. Member for Thirsk and Malton (Kevin Hollinrake) that regular conversations have been taking place. That includes a meeting with the council leader a couple of weeks ago, and there will be a further meeting this week. We have said that we will do what is needed to help the council achieve what it needs to achieve, and to get the service back on track. I am sure that the hon. Gentleman will agree that that is the right approach, with local leaders showing local leadership and national Government providing the support that is needed.

Bizarrely, the hon. Gentleman referred to council tax increases. The council tax increase in Birmingham last year, under the last Government, was higher than this year’s increase. Why? Because this Government have a clear eye on looking after taxpayers and ensuring that any increases are contained. How did we do that? We did not do what the last Government would have done. We did not say, “Just go to the wall and see what happens.” It was this Government who provided nearly £40 million of new money through the recovery grant for Birmingham, to ensure that it did not have to pass that increase on to local taxpayers. That is genuine partnership, with national Government and local government working hand in hand. Is it not time that the previous Government accepted their failings over 14 years in office and accepted that the foundations of local government were left weaker, not stronger, when they left office? Will they now start putting the interests of the people of this country ahead of political interests?

Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between Jim McMahon and Kevin Hollinrake

Consideration of Lords message
Monday 31st March 2025 Commons Chamber

[Kevin Hollinrake]

The Minister says that the solution that he has alighted on meets his manifesto commitment, but his manifesto says,

“This new system will level the playing field between the high street and online giants”.

That is not what the provision does—not exclusively. He knows that it levies extra taxes, extra business rates, on high street stores, large department stores, supermarkets, football stadiums and many others. They are not online giants.

[Jim McMahon]

The rating system adequately reflects the scale of properties. Less than 1% of properties in the business rates system will use the higher multiplier. That will fund the tax break for those on the high street that will use the lower multipliers. In the evidence session —the hon. Gentleman was there—we heard retailers say, “Of course, that will have an impact on our distribution centres, but we have so many stores that are below the threshold.” That allows national retailers with multiple locations to benefit; in the round, they find themselves better off as a result of this policy. As for rebalancing the situation for online retailers and those on our high streets, that is exactly what this measure does. Big distribution centres will pay for that relief.

I once again thank hon. Members for their contributions, but for the reasons set out, I respectfully ask this House to disagree with the amendments before us.

Question put, That this House disagrees with Lords amendment 1B.

The House proceeded to a Division.

Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill)

Debate between Jim McMahon and Kevin Hollinrake

Consideration of Lords amendments
Tuesday 25th March 2025 Commons Chamber

[Jim McMahon]

First, I am grateful to Members of both the Commons and the Lords who have so diligently scrutinised the Bill throughout its passage. Before I address the amendments tabled by the Lords, allow me to remind the House of why we introduced the Bill in the first place. This Government have committed to transforming the business rates system, and the Bill is a first step on that important journey. We want to achieve a sustainable system that is fit for the current economic landscape, and where business growth is supported and ratepayers pay their fair share. I thank the noble Lord Khan of Burnley for taking the Bill through the other place and for being so thorough in his approach. I also thank officers of the Ministry of Housing, Communities and Local Government and my private office for all their work on the Bill.

The Government oppose all the amendments before us today and I will provide further explanation as to why. At the Budget, the Government explained that we wanted to introduce new lower multipliers for qualifying retail, hospitality and leisure properties from April 2026 to address the uncertainty of the temporary, stopgap support provided by the annual RHL relief. Business rates represent a stable source of revenue for local government, meaning that this permanent tax cut must be sustainably funded. That is why the Government also announced our intention to introduce a higher multiplier for all properties with a rateable value at or above £500,000. This Bill makes provision to enable the introduction of those new multipliers, so this is the first step towards delivering on the Government’s manifesto commitment to transform the business rates system to one that is sustainable, protects the high street and is fit for the 21st century.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

On a point of detail, the Minister says the Bill is a “first step”, so will there be further reforms, following these reforms, to the rest of the business rates system to meet his manifesto commitment to replace the current business rates system completely?

--- Later in debate ---

[Jim McMahon]

I am not going to pre-empt any further decisions on this, other than to say that this represents an important and significant step forward. As a constituency MP, he, like me, will have heard from many small businesses—retailers, hospitality providers or leisure providers—who appreciated the support during covid, but were very clear that there was a cliff edge and that that support was coming to an end. The previous Government did not provide any certainty about what followed, so the Bill ends that uncertainty and hardwires in a permanent relief system to ensure those important businesses that are the foundation of our communities and our economy are supported through the tax system.

[Kevin Hollinrake]

The Minister has already said, as he has in previous speeches, that this is a “first step”, but now he says it is a “permanent” measure. I agree with him that business wants certainty, so it is important that businesses understand: is this now a permanent position that will not be changed, or a first step?

[Jim McMahon]

The answer is that it is both, as I will go on to explain in more detail. It is an important first step, and the relief that is provided, funded through the higher rate properties, will be hard-baked into the system, notwithstanding any future support that may well follow, which we are not pre-empting today.

Lords amendments 1, 6, 7 and 12 would remove qualifying healthcare hereditaments from the higher multiplier, and Lords amendments 2, 5, 8 and 11 would do the same in relating to anchor stores. Considering the challenging fiscal environment, it is vital that this permanent tax cut is funded sustainably. The Government have been clear that they will do that by applying the higher multiplier to all properties with a rateable value at or above £500,000. That accounts for less than 1% of all properties and is the fairest approach. The impact on healthcare properties is limited. As set out in the other place, of the 16,780 properties at or above the £500,000 threshold based on the current rating list and rounded to 10, only 350 are in the health sub-sector. Of those, 290 are NHS hospitals and only 30 are doctors’ surgeries or health centres.

At the autumn Budget, the Chancellor fixed the spending envelope for phase 2 of the spending review. The Government are considering the full range of departmental priorities and pressures as part of the spending review, and that includes any impact of the higher multiplier on public sector properties, such as schools and hospitals. I urge the House to disagree with those amendments.

We recognise the importance of anchor stores, and we are doing a great deal to support the high street in this Bill and elsewhere. While the largest anchor stores may be caught by the higher multiplier, they are often part of large retail chains that will have a number of properties with rateable values below £500,000. Those businesses will, therefore, benefit overall from the lower multipliers.

Oral Answers to Questions

Debate between Jim McMahon and Kevin Hollinrake

Monday 3rd March 2025 Commons Chamber

[Mr Speaker]

We come to the shadow Secretary of State.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The Minister mentions local government reorganisation. On 5 February, the Deputy Prime Minister stated:

“We are postponing elections for one year, from May 2025 to May 2026”—[Official Report, 5 February 2025; Vol. 761, c. 767.]

but on 17 February, the Minister, in a written parliamentary question, said that

“new unitary…government will be established or go-live in 2027”

or 2028. Will the Minister confirm that these elections are not being postponed, and that they are, in fact, being cancelled for up to three years, meaning that councillors will serve terms of up to seven years? Will he also confirm that the Deputy Prime Minister may have unintentionally misled the House, and will he correct the record?

[Jim McMahon]

I can start by confirming that the Deputy Prime Minister did not mislead the House. The Opposition would do well not to muddy the waters. They know better than anybody what local government reorganisation means. Over the past few years, when they were in government, they postponed 17 sets of elections to allow reorganisation to take place. Although elections are being postponed in nine councils, 24 sets of elections will still take place this year. Let us not allow this to be whipped up into something that it is not.

We absolutely want to move at pace on reorganisation. We want to see proposals developed and presented early—the sooner the better—so that we can move to those shadow authorities, and so that local people can elect the new bodies that will deliver public services in their area and be accountable to them. To be clear, nobody will benefit—not the leaders of Conservative councils who have asked for postponement, nor members of the public—if we make the matter more confused than it needs to be.

Local Government Finance

Debate between Jim McMahon and Kevin Hollinrake

Wednesday 5th February 2025 Commons Chamber

[Jim McMahon]

Just to be clear, even rural councils will receive a near 6% increase in their core spending power. It is correct that £600 million through the recovery grant is targeted at deprived communities, but we have followed an assessment of need right through the system, including that of rural authorities. The hon. Member must welcome that.

[Kevin Hollinrake]

I will come on to that, but we do have a different perspective. The point that I am making principally right now is that there are rising costs on councils, both in direct costs through national insurance and through indirect costs, which are not fully covered by this settlement, and I think the Minister accepted that fact earlier in his remarks.

The reality is that rural areas will face higher council tax increases to make up for reduced central funding, despite the cost increases of providing services in rural areas. To give the House an easy example of this, my local authority, North Yorkshire council, spends more on school transport than it does on the whole of children’s social care. That is the cost of delivering services in rural areas. Despite that, the Labour Government have chosen to scrap the rural services delivery grant. They have said that they are repurposing it, but it is now clear that this has not been repurposed to support rural areas in the way that the delivery grant used to do, despite the higher cost of service delivery in those areas.

The chairman of the County Councils Network, Tim Oliver, has warned that rural areas will lose hundreds of millions of pounds due to Labour prioritising urban areas over rural ones in the way that it distributes funds. The Government are moving distribution away from a needs-based formula to one based on deprivation. He has warned that Labour’s funding formula will mean that rural councils would lose an estimated £190 million in a single year. He has also stated that, when taking into account the moneys needed to cover the costs of the national insurance increases, this is the worst settlement for county councils in four years.

Provisional Local Government Finance Settlement

Debate between Jim McMahon and Kevin Hollinrake

Wednesday 18th December 2024 Commons Chamber

[Jim McMahon]

Here we go again. I would think that after 14 years of councils being on year-to-year watch to find out what position they would be in, the Conservatives would at least welcome the preparation now for multiyear settlements. They had 14 years to get their house in order, and they could not even line up to give councils more than 12 months’ certainty about what was coming. The one thing councils were absolutely certain about was that it was only going to be bad news after bad news. When there were crises in adult social care and children’s services and when homelessness was rising at a rate of knots, the last Government were completely missing in action—that was what councils were facing. How many councils went bust on their watch? Councils were lining up saying to the Government that they could not afford—

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Birmingham.

[Jim McMahon]

Let us talk about Birmingham, because the Opposition referenced the £3 million new homes bonus. The new recovery grant—£600 million of brand new money targeted at those councils with high deprivation and low tax bases—just for Birmingham is £39 million. That will start the repair work of rebuilding the foundations.

When we talk about fair funding and why it is needed, we will not do what the previous Government did, where they put party politics ahead of the national interest. Let me remind the Conservatives of what the previous Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak), said in Tunbridge Wells in 2022:

“We inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.”

That is a record of shame. It is nothing to preach about. To right the wrongs of the past 14 years and finally get money where it is needed, this Government will work for public service, not party interest.