Local Government Finance Bill

John Hemming Excerpts

Wednesday 31st October 2012 Commons Chamber

[Robert Neill]

Lords amendment 1 is important because it enables pooling, and pooling is one reason why irrelevances such as unitary reorganisation need not trouble the Government in the future.

[John Hemming (Birmingham, Yardley) (LD)]

I represent a Birmingham constituency. The local government structure in the area arises from the fact that the West Midlands county council was abolished in 1985 and three functions were dealt with separately: the police and the fire service are now precepting authorities, while the integrated transport authority—it used to be the passenger transport authority—is not a precepting authority. In terms of encouraging economic development, therefore, there is a key question as to whether pooling serves to improve transport. Will the Minister comment on—

[Mr Deputy Speaker]

Order. The hon. Member for Bromley and Chislehurst (Robert Neill) is a former Minister; he is not still a Minister. Also, interventions need to be shorter. If Members wish to speak, they should put their name down, and I am sure we will be able to accommodate them.

[Robert Neill]

My hon. Friend makes a fair point. When seeking clarity on these matters, we are sometimes bedevilled by history. A passenger transport authority would, I suspect, be a levying authority rather than a precepting authority for the purposes under discussion. At present, it would not necessarily fall within the scope of this pooling. It is important to raise such topics, however. There must be a means whereby the pooling of retained business rates includes incentives for transport authorities. In Greater Manchester, the solution has been the creation of a joint authority. There might be merit in considering a similar solution in Birmingham. I am sure the Minister will take that point on board, and I ask him to address it in his concluding remarks. It is also worth pointing out that if there is a large amount of money in the business rate pool, more money can, of course, be leveraged into investment, particularly for infrastructure purposes—and infrastructure investment is precisely what authorities want.

[John Hemming]

The key point is that public transport is an important driver of economic development, and it therefore needs to be encouraged through the pooling process.

[Robert Neill]

I agree, and I am sure we will be able to find ways to address that. The amendment in question and the pooling of business rates is one of the tools, and it is an important one, but it is not the only tool the Government are putting into the local authority box.

--- Later in debate ---

[Robert Neill]

I hope that if there is the political and economic will to do that, we will see it; I favour the maximum diversity in these measures. We should seek to give the maximum flexibility to local authorities on how they use these various tools, because that is genuinely localist. What will be appropriate in Rossendale will probably not be appropriate in Bromley, but it is sensible that those alternatives are available. I want an emphasis on outcomes, rather than on structure or process. Breaking down the barriers that can sometimes be an impediment is an important part of that. My hon. Friend the Member for Bedford talked about a mindset. Just as breaking that down is important, so, too, is breaking down the structural impediments that might stifle the initiative that I am increasingly finding local authorities want to take up through the opportunities that come from business rates retention. That is an important part of the mix that we must introduce.

[John Hemming]

One of the issues about hypothecating the pooled revenue from national non-domestic rates is that we can develop further employment. Does the hon. Gentleman feel there is merit in having a facility for localised sector tendering, funded by a transport authority, receiving money through the pooled process of the national non-domestic rates—it is now localised non-domestic rates, of course—on the basis that that would make it easier for people to get to work by bus?

[Robert Neill]

That is an interesting proposition. I had not specifically applied my mind to it and I cannot say off the top of my head whether or not the legislation would permit it. I am sure the Minister will be advised on that before he responds. We ought to be examining all these matters.

I am conscious that this is a technical measure and that we have to discuss a number of other important measures. I have probably said all I need to say on pooling. Other elements of a more technical kind are contained in the schedules, which are addressed in amendments 19 to 82. I would not dream of dealing with those individually, but it is important that we examine them carefully—yet briefly—because, as is always the way of local government on these things, the devil is in the detail of the schedules. Indeed, when, as Ministers, we looked at the Bill early on, we found that most of the work is in the schedules. Amendments 19 to 82 seem to deal with some of the important issues that the hon. Member for Warrington North (Helen Jones) raised: the questions relating to how we deal with deficits or surpluses in the collection fund. The solution that the Government propose is workable and elegant, and will merit attention. The amendments clarify and strengthen the position, so I hope that they will also commend themselves to the House.

Important amendments are also proposed to the schedules in respect of the position of major precepting and billing authorities. I am sorry that my hon. Friend the Member for Rochford and Southend East is not in his place, as those amendments will help to clarify the issues he raised. I hope that those amendments, too, will be seen as important and valuable. Although there are a lot of them, they deal with certain themes, and all of them, taken together, represent a significant strengthening of the Bill. I hope that this stream of amendments will commend itself to the House.