Non-Domestic Rating (Rates Retention and Levy and Safety Net) (Amendment) and (Levy Account Basis of Distribution) Regulations 2019

Lord Beecham Excerpts

Monday 18th March 2019 Lords Chamber

[Lord Shipley (LD)]

The Minister will be grateful for paragraph 8.1 in the Explanatory Memorandum, which states:

“This instrument does not relate to withdrawal from the European Union”.


It is the first statutory instrument today that does not have that status. However, as the Minister said, it is technical but important.

I remind the House that I am a vice-president of the Local Government Association.

I understand that this statutory instrument has to be brought forward every year to enable the rolling 75% business rates retention pilots to take place, which are now being extended to new areas for 2019-20. In that respect the SI is fine. As the Minister stated, it also allows for the new authorities being created out of reorganisation, such as Dorset, to levy business rates. Obviously that is essential. It allows for the return to councils of money which had previously been levied by central government through the business rates account. The total sum amounts to £180 million, which means that the Government will make themselves popular with those receiving it.

Although this is a technical SI, we should reflect that the basis of business rates is under question and under stress, not least because of the pressures on the retail sector. No doubt we shall have opportunities in the future to discuss that issue in greater depth. However, as the Minister said, this is a technical but important statutory instrument and it has our support.

[Lord Beecham (Lab)]

My Lords, I declare my local government interests as vice-president of the LGA and as a councillor in Newcastle.

The noble Lord, Lord Shipley, referred to the present situation in respect of business rates. There is a bland assumption by the Government that there is a uniform approach to what can be raised locally, either by domestic rates or business rates, but that is not the position. The amounts that can be generated vary considerably between authorities and the Government have paid little attention to that disparity, in terms of either council tax or business rates.

The Government are making much of the £180 million they are going to restore to authorities. That is £100 million less than the loss that Newcastle City Council alone has sustained in grants from central government since 2010. It is a pitifully small amount and will make little difference to the efforts of local councils—of all political characters—to maintain local services. This is not a substantial change in favour of local government and the Government have to look again at the wider issues of funding a sector of the economy which has been substantially underfunded for the last eight years.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, as the Minister said, the regulations are technical and in that sense I am happy to support them as they stand. I concur with the comments of the noble Lord, Lord Shipley, and my noble friend Lord Beecham and I am sure the Minister will respond to the points raised.

The only issue I want to raise concerns Northamptonshire being in the list of council areas that are involved in this scheme. I know the county council is the precept authority, or the collecting authority, but equally it is a council in crisis. The local government reorganisation is happening because the county council has effectively almost gone broke. Is the Minister confident that we should be doing this in this area, in view of the problems that have been widely reported over the past year? That said, I am very happy to support the regulations.