Local Government Finance

John Redwood Excerpts

Monday 18th July 2011 Commons Chamber

[Mr Pickles]

The hon. Gentleman, who is distinguished in these matters—I am rather hoping that the Communities and Local Government Committee, which he chairs, might consider holding a special hearing on it—is entirely wrong. The levy system is there to pick up various authorities that will enjoy extra growth. [Interruption.] If the hon. Member for Worsley and Eccles South (Barbara Keeley) will contain herself, I shall explain. Different parts of the country will enjoy economic growth at different rates. We will ensure that if areas of the country see disproportionate growth—Kensington and Chelsea, the City of London or the authorities next to Lakeside or Bluewater, for example—the money will be distributed. If we did not do that everybody would go and live there, because the pavements would be covered in gold. It is a natural process. Rather than people being on their bended knees, we will ensure that poorer parts of the country not only enjoy the benefits of economic growth through what they themselves achieve, but benefit from prosperity in the wider community.

[Mr John Redwood (Wokingham) (Con)]

Will the Secretary of State confirm that the increase in the business rate will still be set nationally, in order to reassure business people?

[Mr Pickles]

My right hon. Friend raises an important point. In order to ensure that the system works, business needs to have certainty and predictability, and because we want growth to be generated, we cannot allow businesses to be used as some kind of favourite cash machine for councils. The rate will continue to be set by formula and from the centre. However, local authorities can work closely with business to bring in new businesses.