Local Government Finance Bill

Justin Tomlinson Excerpts

2nd reading: House of Commons & Carry-over motion: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 23rd January 2017 Commons Chamber

[Mr Jones]

I think that the right hon. Gentleman might be conflating the central list, and the hereditament or infrastructure, with the business rate relief, which is designed to incentivise providers to lay further networks of fibre-optic cables in the ground so that people can benefit from superfast fibre broadband across the country.

Under the current system, central Government put a levy on local growth. We have listened when councils have told us that this tax on success—this penalty for doing well—is a huge disincentive for local authorities. The Bill scraps the central Government levy for good. This means that local authorities will keep 100% of growth in business rate income between reset periods. That will be a real incentive to grow their local economies, and a great way to keep the proceeds of growth in their communities. We will also allow local authorities that set up pooling arrangements to designate specific areas where they want to boost growth. They will have the potential to keep all the growth and not lose it to the periodic reset and redistribution process.

[Justin Tomlinson (North Swindon) (Con)]

To unlock growth through the provision of considerable incentives, we need councillors with direct, relevant business experience. What more can be done to encourage busy businesspeople to put themselves forward for office?

[Mr Jones]

My hon. Friend, who is an entrepreneur, is absolutely right. This Bill and the measures being brought forward will attract entrepreneurial people to the role of councillor. Unlike in the past, when local business rates were collected locally and sent back to Government and then distributed across the country, the change will give local authorities a real incentive to be entrepreneurial and to attract the people that he and many of us want to see in local government.

Going even further, the Bill will provide real flexibility to local authorities. Councils can already provide business rates relief for parts of their area or particular sectors. As a result of the Bill, for the first time since the establishment of the business rate system, councils will be able to reduce the national business rate multiplier for their whole authority, helping them attract business and investment to their area. We are also supporting investment where it is needed to boost growth through infrastructure investment. The Bill will enable mayoral combined authorities and the Greater London Authority to raise a small supplement on business rates in full consultation with businesses to enable them to realise their areas’ growth ambitions. To recognise property owners’ wish to support the regeneration of their areas, the Bill will allow the establishment of new arrangements for property owner business improvement districts, That will enable property owner BIDs to be established across the country whether or not a business rates supplement is in force in that area, allowing a levy to be raised on those with a property interest.

Running a business is more than a full-time job. The working day does not end when the “Closed” sign goes up. There are huge and growing demands on anyone running a business of any size, and such entrepreneurs deserve to have the Government standing firmly behind them, not getting in their way. We will therefore take a power to make the business rate system more convenient, ensuring that every business can access e-billing, and we will provide guidance to ensure that bills look the same everywhere. If a business has premises in Rochdale and in Richmond, it should not have to wrestle with two completely different sets of paperwork. Finally, the Bill includes a paving measure that will help us to meet our commitment of offering joined-up access to tax bills, including business rates, by 2022. The measure will give Her Majesty’s Revenue and Customs the ability to carry out early design work and engagement to develop proposals for how that can be delivered.

For too long local government has been too dependent on the whims and largesse of Whitehall and Westminster. Now is the time to change that forever. Now is the time to help local leaders focus on growth. Now is the time to reduce the burden on local businesses. The Bill provides the framework to do all of that and more. It will realise once-in-a-generation reform that will revolutionise local government funding. I am delighted to commend the Bill to the House.