Provisional Local Government Finance Settlement

Debate between Jim McMahon and Mike Wood

Wednesday 18th December 2024 Commons Chamber

[Jim McMahon]

I am pleased to say that this year, core spending power in my hon. Friend’s area will increase by 8.1%, and again, that does not take into account the billions of pounds that will follow. That reflects the service demand pressures, but also the reality of the local tax bases in that area. Telford, like many areas, does a very good job of providing local public services, but the council itself recognises that the neighbourhood services that most people see and feel—those that make a difference to quality of life—have been retreated on because of the need to fund targeted services, and social care in particular. We are absolutely determined to rebuild adult and children’s social care and sort out the housing crisis, but we also want people to live in good places that people are proud of, which requires those neighbourhood services to be rebuilt. It will take time to do that, but our commitment to Telford and the rest of the country is that we are absolutely determined to do so.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

The core spending power tables that the Government have published today show that total Government funding for South Staffordshire is down by 7.5%. Just what do the Government have against council tax payers in South Staffordshire?

[Jim McMahon]

Given the hon. Gentleman’s background, I am surprised that he is displaying such ignorance of council finance. The Government’s role in local government finance is to be an equaliser. As he knows, everywhere has the ability to raise tax locally through council tax and business rates, but he also knows that some areas have the ability to raise far more than others because of their tax base. It is the job of the Government to equalise—to make sure that when it comes to demand for services, everywhere gets the service provision it needs. That requires the Government to provide more funding in some places to reconcile that lower tax base, so that everyone gets the services they are entitled to. The presentation that the hon. Gentleman has offered shows either ignorance or politics, but I think the country deserves better.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between Jim McMahon and Mike Wood

2nd reading
Monday 25th November 2024 Commons Chamber

[Jim McMahon]

I can answer this question: it is the impact that matters. Whatever Opposition Members say as the farmers’ friends, the truth is different: 7,000 businesses closed on their watch. That is what the evidence says.

Let me move on to the reasoned amendment. This Government are fully committed to protecting and supporting our valuable high streets. The fact is that retail, hospitality and leisure rates relief was due to end in its entirety by the end of March 2025, which would have meant a cliff edge for businesses. At the Budget, we stepped in to prevent that by extending the relief further this year by 40%, with a cash cap of £110,000. We have also frozen the small business rates multiplier for 2025-26. Taken together with the small business rates relief scheme, that means that more than 1 million properties will be protected from any inflationary increases next year. That is 1 million properties protected by this Government.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

By the Minister’s logic, are we to assume that support on business rates for hospitality and retail is to end in April 2026?

[Jim McMahon]

That really was not worth giving way for. I have literally just said that 1 million properties will be supported against inflationary increases next year. The 40% will continue, with a cap of £110,000. That is exactly what this Bill is intended to do. If the hon. Gentleman supports it, he can join the Government in the Aye Lobby and vote for it.

We know from businesses that the current scheme of discretionary relief does not provide the certainty needed. That is why the Bill will enable a permanent tax cut for retail, hospitality and leisure businesses from 2026-27 through new lower multipliers, ending the year-by-year uncertainty that the previous Government hardwired into the system. That is doing what businesses have been calling for. That rebalancing—from out of town to in town, from online to on street—is exactly what people have called for in communities and in business, and Opposition Members know it. Their frustration is that they did not do it in the 14 years that they had in office. It is down to us to take the steps that are needed in government now, and we are happy to do so.

The reasoned amendment raises concerns about the impact on schools in the state sector. I can assure the House that protecting and improving state education is at the forefront of the Government’s mind. In fact, we estimate that only 2,900 more pupils will enter the state sector as a result of the removal of the business rates relief for private schools. Let us be clear about what that means in reality: that goes down to about 300 a year. In any given year across England, 60,000 pupils will move between schools; this is 300. We need to keep that in context, because we have heard a lot of scaremongering about the transfer, but that is what the evidence says. That evidence is placed in the House of Commons Library, in case Members want to take time after this debate to go and look. There might even be enough time to find the documents before the vote if they want to bring themselves up to speed.

Importantly, this is about providing much-needed investment in the state school sector. Just how many parents say, “We need specialist support for SEND, because the mainstream provision is not adequate”? How many parents—by their own admission, among Opposition Members—choose to pay for private education because they do not have faith in mainstream provision? Despite what Opposition Members have said about the glory years of the past 14 years, the truth that parents and pupils on the ground feel is very different, and they know it. We have to repair mainstream provision so that parents and pupils can go with confidence to their local school, knowing that they will get the support that they need—support for all pupils, not just some.

Several hon. Members have mentioned the impact on faith schools. I want to offer some comfort. Of course we value and understand parental choice, but based on the evidence submitted through the HMT consultation, as well as the analysis undertaken by the Department for Education on removing the charitable rate relief, it is not apparent that private faith schools will be affected by this measure any more than non-faith schools. There is no evidence of disadvantage.