Local Government Finance Bill (Sixth sitting)

Debate between Kevin Hollinrake and Rob Marris

Tuesday 7th February 2017 Public Bill Committees

[Kevin Hollinrake]

During the opportunities to challenge and ask questions of the witnesses, did any Opposition Member ask that question of them?

[Rob Marris]

Yes.

[Kevin Hollinrake]

What was the response?

Local Government Finance Bill (Fourth sitting)

Debate between Kevin Hollinrake and Rob Marris

Thursday 2nd February 2017 Public Bill Committees

[Rob Marris]

It is, as ever, a pleasure to appear before you, Mr Gapes.

I am intrigued that my hon. Friend the Member for Harrow West is leaving as soon as I have started talking. [Laughter.] He has probably heard what I am going to say and agrees with it; I hope so.

I will focus on clause 1(3), which deals with the abolition of the revenue support grant, and to the surprise of some, I will actually be brief, Mr Gapes. I am concerned about that measure. We have heard talk of incentives but no evidence of that. I am concerned about the inequalities that the abolition of the revenue support grant may lock in.

[Kevin Hollinrake]

What evidence did Labour find before it introduced the local authority business growth incentive scheme, which served a similar purpose?

[Rob Marris]

There is a lack of evidence. Things do not work. Now we have this Bill, which is supposed to work. The 50% has not worked, so we are now talking about the 100% not working. I am not the Government. It is not my party saying in the explanatory notes—the Minister said this more than once on Tuesday morning—that the Bill will provide incentives. I understand that concept. It is just that a bit of evidence would be welcome.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Rob Marris]

No, I will not, because I want to move on and talk about the abolition of the revenue support grant—I am not primarily talking about incentives—which is set out in clause 1(3). I appreciate that the abolition of the revenue support grant would not abolish the discretionary grant-paying power under section 31 of the Local Government Act 2003, but it would replace a mandatory with a discretionary funding approach. The explanatory notes, produced at the behest of the Government, are very helpful in that regard. They lay bare the Government’s intention, which is, in effect, to abandon just-about-managing authorities and to help those that are doing well—a kind of survival-of-the-fittest approach. I say that because paragraph 31 states:

“The removal of revenue support grant, together with provisions ensuring that local government will keep 100% of locally collected business rates, will increase the self-sufficiency of local government by making them less reliant on grant and more reliant on locally raised taxes.”

I understand the concept of self-sufficiency—it can be laudable—but we have to take into account where our country is at, not where we would like it to be at. That is the very point that my hon. Friend the Member for Oldham West and Royton made about us being one country.

We have heard about the incentives to balance this proposal and about what councils are going to do with their self-sufficiency, but in places such as Wolverhampton, which is one of the most densely populated cities in Europe—presumably because it is such a wonderful place and lots of people want to live there—there is not a lot of spare land. I understand—the hon. Member for North Swindon can correct me if I am wrong—that land is not such a pressing issue in Swindon or, indeed, in Wiltshire.

Hon. Members adverted to what councils might do with the self-sufficiency that the abolition of the revenue support grant in clause 1(3) is ushering in. They might have cheaper car parking. I understand that, for business rates purposes, they might think that will get more people coming in and shopping, and therefore the rental value of shops will go up, but it can be dog eat dog in terms of air quality, which is a huge problem not just in London but around our country, including in Wolverhampton.

Out-of-town shopping centres were adverted to. There are huge problems with the environment in that regard. There are problems in places such as Wolverhampton, a densely populated unitary authority. Any out-of-town shopping centre is likely to be next door, in the Chief Whip’s constituency. That is great for the people of South Staffordshire, but not so good for the people of Wolverhampton. We are going to get a dog-eat-dog approach, because South Staffordshire District Council is going to encourage that. We have heard about warehousing. I appreciate that, during the economic crisis, it was in Swindon’s interest to provide a giant car park for Honda, but that does not help the future economic development of our country.

This is not the way forward for our country. Getting rid of the revenue support grant, and having a system that is much more dog eat dog and “every municipality for itself” is not a good way to go if we want our country —England—to be a society where we have mutual obligations to each other.

Local Government Finance Bill (First sitting)

Debate between Kevin Hollinrake and Rob Marris

Tuesday 31st January 2017 Public Bill Committees

[Rob Marris]

Q But we will be discussing the Bill in Committee very shortly. Your answer is not encouraging, Minister. Will we receive the responses before the end of our sittings on the Bill?

Mr Jones: I can assure you that my intention is to bring those forward before the end of the Bill sittings.

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

Q On redistribution, I accept that the Bill gives local authorities the incentive to grow business rates, but the vast majority of income that will go to councils will be through a redistribution of the 100%, and that will be distributed according to need. The Local Government Finance Act 1988 stated that local authority funding for people should be fair, regardless of where they live. In London, local authorities have around 40% more spending power. If you add up all the local authorities of whatever tier divided by the number of people, the residents pay a lot less in council tax. Out of the total funding—business rates, revenue support grant or council tax—they have 40% more spending power, yet they contribute less in council tax. There does not seem to be any correlation in terms of need in those local authorities. That cannot be fair.

Mr Jones: I know this is a subject that you care about deeply, Mr Hollinrake. Quite rightly, at every opportunity available, you raise it with me and other Ministers in the Department. I understand that. The response to the call for evidence on the fair funding review conducted in the middle of last year will be released shortly. We will then look to introduce further consultation on fair funding. As you know, it will be complex. The way in which the needs assessment was put together more than 10 years ago means that there is significant complexity and we will have to look at the system very carefully, but we are alive to the fact that we need to bring that together with the fair funding review and the issues of redistribution by the time we get to implementing the outcome of the legislation in 2019-20. We are mindful of the fact that local authorities across the country have legitimately questioned whether the assessment of need is right, given the changes in demographic pressures and suchlike.