Council Tax: Government’s Proposed Increase

Luke Hall Excerpts

Monday 25th January 2021 Commons Chamber

[The Minister for Regional Growth and Local Government (Luke Hall)]

I appreciate that this has been a contentious debate, but may I start by expressing my huge appreciation for the incredible work that councils across the country have been doing to help lead the response to the pandemic? They have been at the frontline of the response in areas such as social care, testing and ensuring public safety, and they have continued to do an outstanding job in delivering the day-to-day services that we all rely on so much, including waste collection, highways maintenance, park management and so much more. May I also join my hon. Friend the Member for St Austell and Newquay (Steve Double) in praising parish and town councils, which have worked so hard over the course of this year to deliver their services?

Unfortunately, what we have heard today is an Opposition who completely misunderstand some of the basic rules of local government finance. The premise of their argument seems to be that the Government are somehow forcing councils to increase council tax by failing to provide adequate support in response to the pandemic. However, if we step back and look at the basic facts, we will see that nothing could be further from the truth.

If Members look at councils’ self-reported figures to our Department, which project that cost pressures for covid total £6.9 billion, and compare that with the £8 billion that we have already provided to councils since March, they will see that we have provided them with £1 billion more than they are spending in response to this pandemic. On top of that, we have provided a business rates holiday worth about £10 billion to retail, hospitality and leisure industries. We have also given councils over £17 billion to provide grants to thousands of businesses across the country, and we have seen some incredible work from councils in getting those grants directly to affected businesses. We have also introduced a sales, fees and charges scheme, supported leisure centres and supported councils with local tax losses. Councils will continue to receive funding through the contain outbreak management fund, to tackle the spread of the virus. That is worth over £225 million a month. We are backing local government all the way with the necessary funding now and into the future.

[Sara Britcliffe (Hyndburn) (Con)]

Does my hon. Friend agree that it is welcome that today Hyndburn Borough Council received an extra £492,000 to help with the community response? Does he also agree that it is important that our residents get the bang for their buck and that the basics get done, such as streets being cleaned, bins emptied and empty buildings on our high streets restored to their former glory?

[Luke Hall]

My hon. Friend is absolutely right that councils should be delivering efficient services with the settlement that they have received from this Government.

If we look at the provisional settlement that the Secretary of State published on 17 December, we see a 4.5% cash-terms increase in core spending power—a real-terms increase for the next financial year. We have also committed at least £3 billion of additional help to councils for next year. That includes the extension of the sales, fees and charges guarantee scheme, which we know has been a lifeline to so many councils during this pandemic. Our commitment to support councils is stronger than ever, and we will ensure that they have the resources they need to deliver first-class public services.

May I thank Members from both sides of the House for their contributions to this debate? I appreciate that it has been hotly contested and contentions, but some important points have been raised. I was surprised, however, to see numerous Opposition Members stand up and say how much they disagreed with the Government’s proposal, given that so many of their councils have not even bothered to respond to our consultation. The hon. Member for West Ham (Ms Brown) said how much she and her council disagreed with it, but Labour-run Newham Council has not responded to our consultation on council tax. The hon. Member for Slough (Mr Dhesi) told us how strongly he and his council feel about this issue, but it has not responded to our consultation, either. Perhaps that is because it welcomes fully the 3.9% increase in core spending power that it will receive next year. The hon. Member for Westmorland and Lonsdale (Tim Farron) told us how much he and his local Lib Dem council did not support it, but it has also not bothered to respond to the consultation. It is typical of a Lib Dem administration that it stands up, shouts from the sidelines and fails to do the necessary work.

[Mr Kevan Jones]

It might be because the Government completely ignore them. Durham County Council has lost 40% of its budget—£232 million—in the past 10 years. Under the proposed council tax rises, its limited council tax base will limit what it can raise compared with southern councils. How can that be right, in terms of moving money from the north to the south?

[Luke Hall]

I do not see how it is right for the right hon. Gentleman’s local council to spend millions of pounds on doing up an office building and installing a roof terrace during the middle of the covid pandemic. I shall come to his point about council tax redistribution in a moment.

The hon. Member for Garston and Halewood (Maria Eagle) talked about Liverpool City Council being forced to raise council tax. That is not the case; councils have a choice. Liverpool has been campaigning to have a higher council tax—

[Mr Jones]

On a point of order, Madam Deputy Speaker.

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[Madam Deputy Speaker]

Order. This is a debate; there are, therefore, differing points of view on either side of the House—[Interruption.] Do not shout at me in the Chair.

[Luke Hall]

The Opposition motion calls on the Government to drop

“plans to force local councils to increase council tax”—

another complete misunderstanding of the system of local government finance. Decisions on council tax levels are, of course, for local councils themselves. We are allowing councils the flexibility to raise council tax up to the ceiling that we have set, with a 2% council tax referendum limit—a ceiling that many Labour councils have been asking us to raise—and an additional 3% for adult social care responsibilities.

We are also giving councils the flexibility to defer rises in the adult social care precept for next year, if that is what councils locally decide and if local circumstances require that. Vitally, we are also providing councils with £670 million of new funding to enable them to continue to reduce council tax bills next year for those least able to pay—a point that was made so well by my hon. Friend the Member for East Surrey (Claire Coutinho).

We on the Government side of the House trust councils to make the right decisions on council tax; the Labour party cannot even persuade its own councils, which have been writing to us to ask for greater flexibility so that they can raise council tax even more. The Labour party cannot even persuade the Labour group on the LGA, which would see the cap on council tax rises scrapped altogether, as my hon. Friend the Member for Dudley South (Mike Wood) pointed out.

Several Members made points about the Government’s record on council tax. My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) put it very well: under the Labour Government, council tax doubled, it has trebled in Wales and the Labour Mayor of London wants to raise it by 10%, whereas under the Conservatives it has fallen in real terms since 2010. We have introduced council tax referendums, which put an end to the crude universal capping system of the past; we put in place voluntary council tax freeze schemes for five years, which helped to deliver the lowest average increases across England since council tax was introduced; we have introduced local council tax support schemes, requiring councils to set up schemes to help those least able to pay; and we have given councils flexibility over discounts and exemptions and helped them to better manage local housing markets through the introduction of the empty homes premium.

A number of Members raised the issue of social care and were absolutely right to do so. We are funding councils for social care into the future, as my hon. Friend the Member for Dudley South pointed out. The provisional local government finance settlement for next year will provide councils with more than £1 billion of additional funding for social care next year, including £300 million of new grant funding. That is in addition to the £790 million that can be raised through the adult social care precept, if councils decide to. That is, of course, on top of the £1 billion social care grant announced last year, which is being maintained in line with our manifesto commitment.

I was surprised to hear the hon. Members for Nottingham South (Lilian Greenwood), for Worsley and Eccles South (Barbara Keeley) and for Denton and Reddish (Andrew Gwynne)—the former shadow Secretary of State, for whom I have huge respect—all talk about the social care precept raising money in the wrong places. They obviously have not studied the detail of the settlement, which says clearly that we have put aside £240 million to equalise the differences in adult social care precepts. I am afraid they just have not read the detail of the settlement. My hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) pointed out the pressures on household budgets, which are exactly why we have introduced the £670 million scheme.

The Opposition misunderstand and misunderstood the local government finance system. They cannot grasp the fact that it allocated over £1 billion more to local government than councils are spending in response to the pandemic. We take no lectures from a party that doubled council tax when in office and have trebled it in Wales. We are ensuring that councils have the resources they need to come out of this pandemic stronger, and that is why we are supporting councils with a £2.2 billion rise in core spending power and £1.5 billion of extra support to help with covid costs.

We are giving councils the flexibility to defer any increases next year if they believe it is right for their community. We are protecting residents from the sort of outrageous tax hikes that were so commonplace under the last Labour Government. Councils have done an incredible job of responding throughout the pandemic, and we are standing behind them.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I should point out that in current circumstances, when hardly anyone is here, there is no question of my being able to decide this Division on the voices, as there are so few representative voices present. Therefore, I call a Division.

Question put.

Draft West Yorkshire Combined Authority (Election of Mayor and Functions) Order 2021

Luke Hall Excerpts

Wednesday 20th January 2021 General Committees

[The Chair]

Before we begin, I would like to remind hon. Members to observe social distancing and sit only in places that are clearly marked. Hansard colleagues would be most grateful if Members sent their speaking notes to [e-mail].

[The Minister for Regional Growth and Local Government (Luke Hall)]

I beg to move,

That the Committee has considered the draft West Yorkshire Combined Authority (Election of Mayor and Functions) Order 2021.

It is a pleasure to serve under your chairmanship, Mr Hollobone. Laid before the House on 17 December 2020, the draft order, if approved and made, will implement the devolution deal agreed between the Government and the West Yorkshire Combined Authority announced by my right hon. Friend the Chancellor of the Exchequer in the Budget on 11 March 2020. Therefore, the order will establish the office of Mayor of West Yorkshire, with the first election taking place on 6 May 2021. The Mayor will be chair of the West Yorkshire Combined Authority, which comprises the constituent councils of Bradford, Calderdale, Kirklees, Leeds and Wakefield. The order transfers police and crime commissioner functions for West Yorkshire to the combined authority, to be exercised by the Mayor. In addition to the PCC functions, the order confers significant other powers on the Mayor and combined authority, as envisaged in the devolution deal, which relate to education and skills, regeneration, a mayoral development corporation and transport. It also amends certain of the combined authority’s governance arrangements in order to reflect those powers and the role of the Mayor.

Most importantly, the making of the order opens a way to providing the very considerable funding for this area, as set out in the deal. That includes £38 million of annual investment funding for West Yorkshire for the next 30 years, comprising in total more than £1.1 billion, to be invested by West Yorkshire to drive—

[Mr William Wragg (Hazel Grove) (Con)]

Was the money mentioned by my hon. Friend the Minister conditional on acceptance of this mayoral model, and might it not be considered somewhat as a municipal bribe?

[Luke Hall]

The transport funding set out in the Budget previously was conditional on expansion of the mayoral combined authority. I think it is right to say that all parties who have entered into this deal did so willingly and in good faith and have made positive arguments for the extra accountability and benefits that it will bring to the region. The £1.1 billion can be invested in tackling the priorities of West Yorkshire. It includes £317 million from the transforming cities fund, with flexibilities on spend, as well as control of the annual adult education budget.

All this will help the Mayor and local leaders to drive the area’s economic and social recovery from the pandemic. At this point, I place on record my thanks to all the local government leaders, councillors and officers in West Yorkshire for their hard work, not just in securing and agreeing the details of this deal, but in their response to the pandemic, which has been diligent and remarkable.

The order will be made, if Parliament approves, under the Local Democracy, Economic Development and Construction Act 2009, as amended by the Cities and Local Government Devolution Act 2016. As required by that legislation, we have laid, along with this order, an S105B report, which provides details about the public authority functions that we are devolving to the combined authority, some of which will be exercisable by the Mayor.

The statutory origin of the order is in a governance review and scheme adopted in April 2020 by the combined authority, with its five constituent councils, in accordance with the requirement of the 2009 Act. The scheme proposed additional functions to be conferred on the combined authority, as envisaged in the devolution deal, specifying which would be exercised by the Mayor and certain amendments to governance arrangements.

As provided for by the 2009 Act, the combined authority and the councils consulted on the proposals in their scheme, promoting the consultation through regional and local media, social media and posters at public buildings. Responses were accepted through the combined authority website, as well as email, letter and a hard copy form. The consultation ran from 25 May to 20 July 2020, and in total 4,413 people responded to the consultation through a variety of platforms. As statute requires, the combined authority provided the Secretary of State with a summary of the responses to the consultation, on 14 September, and the results show that the proposals are strongly supported by the public and stakeholders.

[Mr Wragg]

I am grateful to my hon. Friend; he is being very generous and is probably somewhat taken aback by my secondment to this Committee this morning. I thank him for his forbearance. In the summary of responses, did he receive a single positive response from a Conservative Member of Parliament?

[Luke Hall]

I thank my hon. Friend for his question. We have had extensive engagement with Members of Parliament in West Yorkshire throughout the process and have met on numerous occasions. Of the eight questions posed in the consultation, all received clear majority support in the consultation responses that have been received. In laying this draft order before Parliament, the Secretary of State is satisfied that the statutory tests in the 2009 Act are met—that no further consultation is necessary and that conferring the proposed powers would likely improve the exercise of statutory functions in the combined authority area—and are appropriate, having regard to the need to reflect the identities and interests of local communities and to secure effective local government. Where the functions are local authority functions, they can be appropriately exercised by the combined authority. Furthermore, as required by statute, the combined authority and the five constituent councils consented to the making of this order.

If the draft order is approved, it will give effect to the provisions of the devolution deal. PCC functions will be transferred. The order is clear that the Mayor’s role as the holder of PCC functions is carved out, and that decisions around police property, rights and liabilities are the Mayor’s responsibility, and there remains a distinct precept. All money relating to policing must be paid into and out of the police fund, and that money can be spent only on policing and matters related to the Mayor’s PCC functions.

A new police and crime panel is to be created, which will exercise broadly the same functions as the police and crime panel under the PCC model. The financial year of the PCC and chief constable for West Yorkshire is to be extended from 31 March to 9 May 2021 to rationalise accounting processes and avoid preparing additional accounts for the one-month interim period. Any receipts will be paid to the police fund to ensure that police funding is protected, and a new police and crime panel is to be created to exercise the same functions as those under the PCC model.

To improve the supply and quality of housing to facilitate the regeneration of West Yorkshire, the combined authority will be conferred regeneration powers and land acquisition and disposal powers. Those will be exercised concurrently with Homes England, enabling the combined authority, working closely with Homes England, to promote regeneration.

The compulsory purchase of land will be a mayoral function, and any decisions will require consent from the West Yorkshire combined authority member whose local government area contains any parts of the proposed land. The order also includes constitutional provisions reflecting the powers conferred and the role of the Mayor. There is provision regarding voting arrangements, so that any decision of the combined authority about its new powers conferred through this order must include the Mayor and the majority of members in favour of that decision. The order also provides for the establishment of an independent remuneration panel to recommend the allowances of the Mayor and deputy Mayor.

This order, which is supported locally, is a significant step forward for West Yorkshire’s businesses and communities. It is key to the city region’s economic recovery, and I commend it to the Committee.

[The Chair]

Members will be delighted to know that the debate can last until five minutes to 11. I call Steve Reed.

--- Later in debate ---

[Luke Hall]

I thank my hon. Friend the Member for Hazel Grove (Mr Wragg) and the hon. Member for Croydon North for their remarks, and the Committee for its consideration today.

My hon. Friend the Member for Hazel Grove raised his concerns and objections to the deal. I think it presents not a serious threat, but rather a serious opportunity for West Yorkshire, with the extra funding and investment that we are putting into this deal. It will allow regeneration opportunities to open up and bring investment into a community that has supported the deal through individual councils. This is a positive step forward for West Yorkshire, which is why it has received support from local leaders.

My hon. Friend also talked about devolving powers locally. We think that it is the right course of action. Devolving power is the best mechanism to secure the most possible local support and involvement in decision making, which we think is a positive step forward.

My hon. Friend also referenced the deputy Mayor and the lack of accountability. The deputy Mayor is appointed by the Mayor, and is accountable directly to the public through the Mayor themselves, so we think that is a positive step forward. It is supported widely locally. All the questions that were raised were broadly supported by the responses received during the consultation process.

The hon. Member for Croydon North asked a number of questions. I am grateful for his and his party’s support on this matter. He asked questions about the Mayor’s role in the levelling-up fund and the UK shared prosperity fund, and he is right to do so. We will make sure that those questions are answered in the new prospectus, when it is published shortly. I note his questions and we will make sure that they are answered through the proper channel.

The hon. Gentleman also asked about the devolution of further powers as part of this process. It is right that the planning powers were not committed as part of this deal, and we will look to have those conversations once the wider planning reforms are agreed. We will take those conversations forward with the Mayor, once they are elected. The hon. Gentleman also made some general comments about the local response to the pandemic, and the amazing work of mayors, councillors and local administrations around the country. I join him in that.

I believe that this order and the deal that it implements will make a significant contribution to the future of West Yorkshire. It brings power closer to communities, and it will play an important part in the economic recovery and the response to the pandemic. I commend the order to the Committee.

Question put and agreed to.

Contingencies Fund Advance

Luke Hall Excerpts

Thursday 14th January 2021 Written Statements

[The Minister for Regional Growth and Local Government (Luke Hall)]

I give notice that the Ministry of Housing, Communities and Local Government intends to seek an advance from the Contingencies Fund to fund previously announced covid-19 expenditure on local government DEL that is above the level of the net cash requirement approved at the main estimate. The Department requires an advance of its cash requirement pending parliamentary approval of the supplementary estimate 2020-21.

Parliamentary approval for additional resources of £3,559,984,000 will be sought in a supplementary estimate for the Ministry of Housing, Communities and Local Government. Pending that approval, urgent expenditure estimated at £3,559,984,000 will be met by repayable cash advances from the Contingencies Fund.

[HCWS712]

Oral Answers to Questions

Luke Hall Excerpts

Monday 11th January 2021 Commons Chamber

[Joy Morrissey (Beaconsfield) (Con)]

What plans the Government have to increase funding for local authorities in 2021.

[The Minister for Regional Growth and Local Government (Luke Hall)]

We are increasing funding for councils in 2021-22. Through the local government finance settlement, we are making an extra £2.2 billion available to councils, with an average cash increase of 4.5%—a real-terms increase. We have also announced £3 billion of covid-19 support for next year, taking our total direct support for local government in responding to the pandemic to more than £10 billion.

[Dr Evans [V]]

I am grateful to the Minister for the announcement of the extra cash, particularly the covid cash, in these difficult times. He will know from our many meetings in the year since I was elected about my concern on fairer funding for Leicestershire. If Leicestershire were funded at the same level as London, it would receive an extra £374 per resident. Will he update me on the formula that underpins the structure and whether there will be a review? Is this likely to change? If so, when?

[Luke Hall]

I thank my hon. Friend for his question and the way in which he has consistently and constructively raised this issue with me and Ministers in our Department. Leicestershire will see an increase of 5.5% in its core spending power next year and receive more than £11.5 million to deal with covid pressures. The Government certainly agree that we need an updated and fairer method for distributing funds within local government. I hope he understands that this year we have had to focus on supporting councils through the pandemic, but once this is over we will revisit our shared priority of funding reform. In the meantime, we have substantially increased the rural services delivery grant to £85 million, its highest level ever, which will support the delivery of services in places such as Leicestershire. I am, of course, happy to continue meeting him in the weeks ahead.

[Joy Morrissey [V]]

May I thank the Minister for his covid cash for councils? Will he confirm that the Government will ensure that councils have the financial support they need to respond to covid-19 and support their local communities? In places such as Bucks, particularly, our council is doing a fantastic job but there is a lot of concern about whether it will have the financial support to carry on throughout the pandemic and make sure that care is taken of all the residents.

[Luke Hall]

I thank my hon. Friend for her question. She is right to say that councils have done an incredible job in responding to the pandemic. We have provided an unprecedented package of covid-related support for councils, which is now worth £10 billion over this year and next year. It includes £1 billion of unring-fenced funding, as well as support with lost income from tax, sales, fees and charges. Buckinghamshire will benefit from more than £54 million of covid support this year and £11 million for next year. Councils are the unsung heroes of the response to this pandemic and we are standing squarely behind them.

[Steve Reed (Croydon North) (Lab/Co-op)]

May I take this opportunity to congratulate Christina McAnea on being elected the general secretary of Unison? It is Britain’s biggest trade union and of course has many members who work in local government.

Let me turn to the Minister. How is it fair to force councils to choose between hiking up council tax for hard-working families during the worst recession in 300 years, or cutting social care for older parents and grandparents during an unprecedented global health pandemic?

[Luke Hall]

It is hard to take lectures from the Labour party about raising council tax when Labour doubled council tax while in office and has trebled council tax in Wales. If the hon. Gentleman wants to speak about raising council tax, he should start by speaking to the Mayor of London, who is proposing a 9.5% increase in council tax for next year. We are ensuring that local government has the resources it needs to emerge stronger from the pandemic. That is why we are putting in an extra £2.2 billion next year. We are also giving councils the flexibility to defer any increases in council tax next year if they believe that is right for their community. If the Opposition Front-Bench team looked at the detail of what we are proposing, they would see that we have provided £670 million to help councils to support people who are least able to pay council tax. There is of course one council that will definitely be raising council tax next year, and that is Croydon, because of its completely disastrous management of its finances.

[James Sunderland (Bracknell) (Con)]

What plans he has to support the regeneration of high streets.

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[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

What support the Government are providing to help local authorities experiencing a reduction in income as a result of the covid-19 outbreak.

[The Minister for Regional Growth and Local Government (Luke Hall)]

We are providing councils with comprehensive support for income lost due to the pandemic. We are extending the existing compensation scheme for lost sales, fees and charges income into 2021-22, and we have already paid councils £528 million under this scheme. We have introduced a local tax guarantee scheme for this financial year that provides 75% of irrecoverable losses in business rates and council tax, worth an estimated £800 million. We are also allowing councils to phase recovery of collection fund deficits over three years.

[Dr Spencer]

I very much welcome the incredible financial support provided to local authorities, particularly through the national leisure recovery fund. Does my hon. Friend agree that supporting council provision of health and leisure centres is vital in helping us to keep healthy and to support our mental wellbeing? Will he look at the situation in my local authorities, Runnymede and Elmbridge borough councils, and their individual leisure operator contracts and according liabilities, where those are in excess of the support provided by the scheme?

[Luke Hall]

My hon. Friend is absolutely right. Leisure services play a vital role in helping people to be active, supporting physical and mental health, and bringing a wider range of community and wellbeing benefits. I can confirm that Runnymede and Elmbridge have each lodged an expression of interest as the first necessary step in the application process for the national leisure recovery fund; I believe that they will have submitted their completed applications before the deadline of 15 January. It is also worth noting that councils may be eligible for support from the sales, fees and charges scheme, which was recently extended into the first three months of 2021-22, but I am always more than happy to meet him to discuss this matter in more detail.

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[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

What steps he is taking to deliver more powers to local government bodies.

[The Minister for Regional Growth and Local Government (Luke Hall)]

We are committed to levelling up across the United Kingdom by devolving directly to local areas, which understand the needs in their community and are best placed to take decisions over investments to drive economic growth and deliver services for their communities. From May this year, 41% of people in England will be living in areas with directly elected regional mayors, and we intend to bring forward the devolution and local recovery White Paper in due course.

[John Lamont]

I welcome the answer from the Minister. It is important that local government has the powers to deliver quality services, but unfortunately in Scotland the SNP Scottish Government have been grabbing powers back from local authorities for years. Does the Minister agree that we need to see Governments of all levels working together to ensure that British people get access to the services they deserve?

[Luke Hall]

My hon. Friend is absolutely right that devolution should be about delivering services that work for local people, which is why we are committed to devolution. We will need, at all levels of government across the country, to work together to achieve that and the best possible services for residents. We intend to bring forward the devolution and local recovery White Paper in due course, which will detail how we will partner with places across the UK to build a sustainable recovery. I can absolutely assure him that this Conservative Government will continue to set the pace on devolution.

Levelling-up Agenda: Tees Valley

Luke Hall Excerpts

Wednesday 25th November 2020 Westminster Hall

[The Minister for Regional Growth and Local Government (Luke Hall)]

It is a pleasure to serve under your chairmanship for the first time, Mrs Cummins, and to be back in Westminster Hall after such an absence. I congratulate the hon. Member for Stockton North (Alex Cunningham) on securing this debate and all Members on their contributions. It has been an important and passionate debate, and certainly a timely one following the Chancellor’s statement earlier today. I also put on record my gratitude to my hon. Friends the Members for Redcar (Jacob Young), for Stockton South (Matt Vickers) and for Darlington (Peter Gibson) for their continued representations on behalf of their constituents. They are rightly doing their duty in self-isolating, but I am sure they would have wanted to be here today.

The thing that has bound everyone in this debate together is their passion to get the best for the future of Tees Valley and the communities they represent. The shared ambition that they have, working with Ben Houchen and the leadership teams at the Tees Valley Combined Authority, is to get the best for their constituents.

Levelling up is a central part of this Government’s agenda. That is why we have set out a clear commitment to unlock economic prosperity across all parts of the country. It is about providing the building blocks and momentum to address those long-term structural regional inequalities, and providing the means to pursue life chances that, for too many people, have been out of reach for far too long. This is hugely important for Tees Valley, where deindustrialisation and the pace of economic change have created challenges to growth and social mobility. Levelling up is about enabling places to determine and support their own economic priorities. That is why we are working so closely with the Tees Valley Combined Authority and the local enterprise partnership, and it is why we have invested £126 million of local growth funding in Tees Valley based on local evidence and local prioritisation.

The fund has improved access to Billingham train station, and improved infrastructure to allow that critical private sector expansion in Stockton’s biopharmaceutical campus—both of these are, of course, in the hon. Gentleman’s constituency. I want to thank Ben Houchen, who has become a leader in showing the potential of devolution across our country. I do not make that point on a party-political basis—other Mayors across the country have done a fantastic job, too—but Ben Houchen has been a model for what devolution can achieve. If we look at the devolution deal, which is already enabling new spend and will deliver £450 million over that 30-year period, it has established a regional investment fund supporting the plans by the Mayor for sustainable economic growth.

We are delighted that one of the Mayors’ flagship initiatives has been transforming the industrial site that includes the former SSI steelworks at Redcar into Teesworks through the mayoral development corporation. We have supported that with £233 million on siteworks over the past five years, and recently handed full control over to the combined authority. Work is now well under way to develop Teesworks as a pioneering business park, which will create 20,000 highly skilled jobs over the next two decades. It is a shining example of what effective partnerships between central Government and devolved powers with effective local Mayors can achieve. I echo the point made by my hon. Friend the Member for Sedgefield (Paul Howell) about achievements around the airport, and even the announcements we have seen today about new routes from Teesside International airport and new operators from the summer. I congratulate colleagues in this House, the Mayor, and everybody involved.

We should also welcome and look at the towns fund investment. We have invited five of the region’s towns to submit proposals for towns deals as part of our £3.6 billion towns fund. We have now agreed the heads of terms with Darlington—that is £22.3 million to boost employment and skills, as well as to make improvements to how the town looks and feels. Prospective deals can follow in Middlesbrough, Thornaby-on-Tees, Hartlepool and Redcar. The objective of the deals is to drive the regeneration of towns and to deliver long-term economic and productivity growth. Across the Tees Valley, the towns deal boards are already working with the community, businesses, investors and local government to do just that.

A number of Members have mentioned the Chancellor’s announcement today about the levelling-up fund. We think that is a further positive example of what can be done with levelling up. Such projects will have a real impact on people’s communities. They can be delivered within this Parliament, and it is right that they should command local support, including from Members of Parliament. It is wrong to suggest that MPs do not speak to local government, because they are able to input valuable information about the projects that their constituents want to see. The levelling-up fund will support the infrastructure that people want in everyday life and that they contact MPs about, from new bypasses and upgrading railway services, to traffic, libraries, museums and cultural assets—all the important issues that our constituents raise with us. The levelling-up fund will be open to all local areas and will be allocated competitively. Next year, £600 million will be available in England.

It is also right to point to the investment in high streets, because the need for the regeneration of high streets is evident in so many of our towns and communities across the country. We have seen considerable challenges for high streets in the past decade, which is why our future high streets fund will revitalise high streets, helping them to adapt and evolve and to remain vibrant places at the heart of our communities. We have submissions from Loftus, Darlington, Middlesbrough and Stockton, and of course we have Hartlepool, which has been selected as the high street taskforce pilot. We will announce the successful future high street fund places before the end of this year, and we will contact places once decisions have been made. That is a hugely important part of the work that we are doing.

We should also recognise the unprecedented challenges that the pandemic has thrust upon us. To counteract some of the impact on businesses and productivity, the Prime Minister announced the £900 million Getting Building fund in August, to deliver jobs. The Tees Valley received £17.4 million of that money, and it is worth noting that that was the highest amount per capita anywhere in the country. Those funds have been supporting the development of high-grade business accommodation at Darlington’s flagship research and development site at Central Park, and they have also helped accelerate the redevelopment of Middlesbrough railway station by improving its facilities and strengthening its connectivity.

The hon. Member for Hartlepool (Mike Hill) made an informed and passionate contribution about the future of green energy and its importance for growth in the Tees Valley. It is undoubtedly right that that has to be an important part of the area’s future growth. We absolutely recognise the urgency of a green industrial revolution that will deliver an economic resurgence and meet our 2050 target, which is why the Prime Minister’s 10-point plan commits to invest up to £1 billion to support the establishment of carbon capture and storage clusters in pioneering places such as Teesside. I am pleased that the Tees Valley is set to host the UK’s first hydrogen transport hub, helping to create hundreds of green jobs. It will help establish the Tees Valley as a hive of research and development activity, advocating the prospect of using green hydrogen to power our buses, heavy goods vehicles, rail, maritime transport and aviation around the country.

I am conscious of the time, so I thank the hon. Member for Stockton North for securing the debate and for his contribution. I know that he is rightly passionate about the levelling-up agenda, and I stand ready to support him if he wants to work with the Government on these issues. However, it is right that towns and communities around the country will be powering our economic recovery, and it is clear that the Tees Valley will be at the heart of this country’s renewal.

Covid-19: Funding for Local Authorities

Luke Hall Excerpts

Tuesday 24th November 2020 Westminster Hall

[The Minister for Regional Growth and Local Government (Luke Hall)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to be back in Westminster Hall after such an absence. It is an important Chamber in which to hold debates such as this one, to raise issues such as local government finance and so on. I am hugely grateful to the hon. Member for Bethnal Green and Bow (Rushanara Ali) for securing the debate and for opening it in such a pragmatic, sensible, level way, which highlighted some of the issues facing local government. I thank her for the tone in which she opened the debate and I thank hon. Members for their contributions. I will do my best to address all the points that have been raised.

First, may I place on the record my thanks to local government? The work that those who serve in local government have done in these extraordinary times has been remarkable. They have risen to help us as a country respond to the incredible challenges we are facing and worked tirelessly to help us through the pandemic. From their incredible work protecting rough sleepers, offering over 90% of them accommodation within just a few days of the start of the pandemic, to the work they have done on testing, alongside NHS staff, to keep our parks, public spaces and schools open, and helping vulnerable people, including victims of domestic abuse, the response has been truly remarkable. I know that if the Secretary of State and the Prime Minister were able to attend, they would put on the record their thanks for the remarkable work of councils, councillors and officers around the country who have done so much to support their communities, their businesses and vulnerable people.

Much of today’s debate has been about the response to the pandemic, so I will start my remarks there. In responding to the pandemic, we have built on what was a good local government finance settlement for this financial year: a 4.4% real-terms rise in core spending power for councils. We were genuinely grateful for the Opposition’s support for that finance settlement and hope to have their support again. Clearly, they will look at the detail carefully when the Chancellor makes his statement tomorrow and when the settlement is published, but we were grateful for the cross-party support this year, which we hope will be forthcoming again.

We have been determined that no local authority should face unmanageable spending pressures because of coronavirus, and we will continue to deliver on that commitment. That is why, following the announcement of the winter plan this week, we have allocated up to £8 billion this financial year to support councils throughout the pandemic. Crucially, that includes £4.6 billion of non-ring-fenced spending so that councils can make decisions at a local level about how that money is spent and how resources should be deployed, because councils know their communities best and are best placed to make those decisions.

A number of hon. Members mentioned the financial returns that we have asked councils to submit throughout the pandemic. I am grateful to councils for doing that so diligently. Our information shows that councils spent £3.6 billion from March through to the end of September on covid-related pressures, so we hope and expect that £4.6 billion of non-ring-fenced money has helped councils with those expenditure pressures.

It is worth putting on the record the other support that local government has received from Departments across Whitehall since the start of the pandemic. That has included: £1.1 billion for the infection control fund, which has helped support adult social care providers to reduce the rate of transmission both in and between care homes, and to support the wider workforce, which has been vital; £300 million of support for councils’ Test and Trace activities; £485 million to support implementation of the national restrictions, which has been extended to the end of the financial year; £91.5 million for councils to ensure that rough sleepers do not return to the streets, as announced in September; £170 million for the winter grant scheme to support families and children; and over £22 billion in grants and reliefs for businesses at this challenging time. We believe that funding package is unprecedented.

Hon. Members commented on what extra financial support will be available now. I reiterate the point made yesterday by the Prime Minister, who confirmed further support for councils as we return to the tiered system of local restrictions with the extension of the contain outbreak management fund for the rest of the year. That will mean a payment from the Department of Health and Social Care to upper-tier local authorities of £4 per person per month in areas with very high restrictions for the rest of the financial year.

Hon. Members made points about the distribution of funding throughout the four tranches of local government finance support since the start of covid. We have distributed non-ring-fenced funding using a covid relative needs formula. It is important to state that the formula accounts for the main drivers of covid-related expenditure. Yes, of course that includes population, but it also includes deprivation, which is crucial, as well as the various cost adjusters for delivering services in different parts of the country. We think that was the right system when considering how to distribute money between councils.

Members also pointed out that it is not only additional covid spending pressure that councils have faced; many have also had to deal with tax and income losses. That is why, alongside the funding we have put into local authorities, we have introduced measures to help them manage the loss of income from tax and transactional services, sales, fees and charges. That is a substantial scheme. It compensates councils for lost income from key services, such as car parks and libraries, which are normally funded through sales, fees and charges but clearly have been largely closed or underused during the pandemic. Alongside that, we have given councils the flexibility to spread their tax losses over multiple years, rather than the usual one year. We have committed to set out further details at the spending review—we do not have too long to wait—on how we will apportion the lost tax income between central and local government. I know that councils are keen for clarity on that point, and it will be provided shortly.

There were a number of representations about the spending review itself. I understand that this is a perfect time for that conversation to happen, and those points have been made. I will answer some of the points specifically, but the representations about spending for local authorities, an increase in core spending power, social care funding and the share of the council tax burden and grant have certainly been heard. Those points were well made.

The hon. Member for Poplar and Limehouse (Apsana Begum) mentioned the one-year spending review and how it would have been more suitable to have a longer-term settlement. I understand that point, but unfortunately we are in a place now where long-term planning is difficult to pursue, so we think it is right to concentrate on the covid-19 response. However, we absolutely share councils’ desire to return to longer-term financial planning. That has been a key ask of councils, and once we are through the pandemic we aim to hold a multi-year spending review settlement.

The hon. Member for Bradford West (Naz Shah) asked a number of questions, which I will try to address. She asked about engagement with regional Mayors. That is a really important point. The Secretary of State and I spoke to all regional Mayors across the country last night. We have an open offer of conversation and continued engagement with them. We also had a webinar with local authorities yesterday, which every leader and chief executive was invited to. Hundreds of councils joined that call, and that engagement is hugely important to us as we progress through this period. We actually continue to have regular webinars and discussions with council leaders across the country, answering their questions on an almost weekly basis, which has been hugely informative.

I hope that I have answered part of the point that the hon. Member for Bradford West raised about the £4 per head in new funding. If she wants more detail on that after tomorrow, I am happy to set it out for her in writing. She asked about lost income and how much of that is being paid out. Most councils have now been informed about the first tranche of payment that is being paid out—millions of pounds. I am happy to share the details with her if that is desirable. She also mentioned public sector pay in local authorities. It is important to note that local authorities, working with unions and other employer bodies, take these decisions externally of Government, but she is absolutely right to put that on the record.

My hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) made sensible and important points about the long-term sustainability of funding and about funding reform. We would have liked to come forward with the fair funding review this year. Clearly, that is not possible in the current circumstances, but we continue to have that conversation. My hon. Friend the Member for Waveney (Peter Aldous) talked about the funding challenges facing counties and made important points about the spending review and the settlements. Those representations have absolutely been heard.

My neighbour, the hon. Member for Bath (Wera Hobhouse), who has understandably left the Chamber, made important points about the specific circumstances facing her local authority, which is unique in a lot of respects. I point her towards the sales, fees and charges scheme, which compensates councils for 75% their losses beyond the first 5% of planned income. I am always happy to meet her to discuss those unique circumstances. She also asked for certainty about leisure centres. The Department for Digital, Culture, Media and Sport will shortly set out more detail about the £100 million scheme for leisure centres. She makes an important point about the importance of those institutions for people’s physical and mental health. She is quite right to raise that.

The hon. Member for Luton South (Rachel Hopkins) talked about the genuinely unique circumstances that face her council. I hope she feels that we are working with her constructively. It is a unique situation and I am always happy to meet her and her council leader to discuss it, if that would be of use. I absolutely recognise the point she raises.

The hon. Member for York Central (Rachael Maskell) also raised the unique circumstances facing her local authority. I know that we are planning to speak soon, and I look forward to addressing the issues then. She also mentioned the spending review and local government pay, which I hope I have covered in my remarks.

The right hon. Member for East Ham (Stephen Timms) raised a number of issues. I join him in putting on the record my thanks to the incredible organisations in his constituency and his local authority for the work they have done on rough sleeping, which I know is a huge challenge. I know how committed they are to that issue and to supporting people. I thank them for the work they have done in the “Everybody In” campaign. He also made passionate points about those with no recourse to public funds. I think we have made changes on that issue during the course of the pandemic, including extending the derogations to ensure that everybody can receive that basic safety net of support, further than the areas it had already been extended to.

The hon. Member for Westmorland and Lonsdale (Tim Farron) talked about some of the excellent work that his council has done, paying out grants and supporting businesses, and I commend it for that work. He also had passionate views about local government reform and the timings. He will be able to make that argument through the process in the right way. I know he feels strongly about the matter.

I want to thank again the hon. Member for Bethnal Green and Bow, who made a number of hugely important points. She talked about targeted funding. I hope she feels that we are doing that through the equalisation we did last year, to ensure that the local authorities affected most by the social care precept are seeking that extra support. I thank her and I am at her disposal, if she needs to talk about that further. I would like once again to thank all local authorities up and down the country. I believe that this unprecedented package of support is supporting those councils and I thank them for their work.

Oral Answers to Questions

Luke Hall Excerpts

Monday 16th November 2020 Commons Chamber

[Greg Smith (Buckingham) (Con)]

What assessment he has made of the proposals on devolution from Buckinghamshire Council.

[The Minister for Regional Growth and Local Government (Luke Hall)]

We are committed to levelling up through further devolution, but our focus must be on tackling covid-19. I know that Buckinghamshire Council has worked tirelessly throughout this pandemic to support its community, helped by £32 million in additional covid funding. We intend to bring forward the devolution and local recovery White Paper in due course, detailing how the UK Government will partner with places across the country to build a sustainable economic recovery.

[Rob Butler]

I thank the Minister for his answer, and I join him in his praise for Buckinghamshire Council, which has worked tirelessly through this pandemic. Does he agree with me that this proposal from the council has all the potential ingredients for success, because it is place based and it has support from the local enterprise partnership, health partners, universities, and the voluntary and community sector? Will he therefore urge his officials to engage in conversations with the council as soon as is practically possible?

[Luke Hall]

I thank my hon. Friend for that question. He is right to raise this hugely important issue, and I was pleased to meet him and other colleagues from Buckinghamshire just the week before last. We are extremely grateful to the council for submitting its proposal, and I know my officials are looking at it closely. As I have said, we will set out details about our approach to devolution in the White Paper. I absolutely agree that our officials should meet as soon as possible to discuss this proposal in greater depth.

[Greg Smith]

I thank the Minister for his answers, and particularly for his praise of Buckinghamshire Council throughout the pandemic. I agree with him entirely that the focus must be on recovery from covid-19, and that is precisely at the nub of the devolution proposals that Buckinghamshire has put together. Therefore, will my hon. Friend agree to meet the Buckinghamshire MPs, Buckinghamshire Council and all of our partners to look at the detail of this proposal, which could put £10 billion extra into the UK economy, both to get the right deal for Buckinghamshire and to help shape the White Paper?

[Luke Hall]

I thank my hon. Friend. It was a pleasure to meet him recently to discuss this and other matters in Buckinghamshire. I would be delighted to have that meeting. As I say, I think our officials should meet to discuss the proposal, and then let us get together with the council very soon to take it further.

[Dan Jarvis (Barnsley Central) (Lab)]

What steps he is taking to ensure that local authority funding is used to tackle regional inequality. [R]

[The Minister for Regional Growth and Local Government (Luke Hall)]

Since the start of the pandemic, we have given over £7.2 billion directly to councils. Sheffield city region has received £127 million in un-ringfenced covid emergency funding, on top of an increase in core spending power of over £70 million this year, and it is set to benefit further from the latest round of support for the November lockdown. Households in the most deprived areas in England receive nearly three times as much spending per home as those in the least deprived areas.

[Dan Jarvis [V]]

I thank the Minister for that response. He will know that since 2015, South Yorkshire has received £363 million from the local growth fund—money that has created 15,000 jobs, funded the revitalisation of town centres and supported investment from companies such as Boeing and McLaren. What plans does his Department have to extend this crucial pipeline of funding beyond next March, so that Mayors and local leaders can rebuild their economies?

[Luke Hall]

I thank the hon Gentleman for his question, and for working so constructively with Government throughout this pandemic. He is right to highlight the importance of local growth funding to places and people up and down this country. The Budget this year did confirm up to £387 million in 2021-22 to provide certainty for local areas, which allows them to continue with existing priority local growth fund projects that require funding past this financial year. We will work closely with LEPs and Mayors to understand the changing need of local economies, and will look at how this funding can be used alongside other resources to support local economic recovery efforts. Further funding decisions will be announced in due course at the spending review.

[Kate Hollern (Blackburn) (Lab)]

When a Conservative Chancellor delivered his austerity Budget a decade ago, he said we are “all in this together”, yet the reality has been far from that, with communities in the north seeing a disproportionate impact on council budgets—in Blackburn, cut by over 50%—dramatically reducing our resilience to the covid crisis and our ability to recover and bounce back. Can the Minister assure the country that the Government will not break their promises again, and that his Department will take real action to address the health and economic inequalities in the north?

[Luke Hall]

I disagree with the hon. Lady’s assertions. The council self-reported covid costs through September stand at £3.6 billion. We have provided £7.2 billion on top of our sales fees and charges scheme, which recoups councils with 75% of their lost income past that first 5%. The hon. Lady’s own council has had £87 million in funding, £15 million in additional un-ringfenced covid funding and £1.37 million in test and trace support. The hon. Lady is also wrong to say that we are not targeting the funding where it is needed. In distributing our covid emergency funding, we have taken into account the roles of deprivation and population, and the different cost drivers up and down the country. We are listening to councils, we are working with them and we praise their extraordinary ability to respond to the pressures of this pandemic.

[Kate Griffiths (Burton) (Con)]

What steps he is taking to support regeneration in towns.

--- Later in debate ---

[Mr Speaker]

Questions 20 and 21 have been withdrawn, so could we have the answer to the substantive questions, followed by David Linden from the SNP?

[The Minister for Regional Growth and Local Government (Luke Hall)]

The £3.6 billion towns fund is delivered in England only. There are Barnett consequentials for Scotland, Wales and Northern Ireland. It is the responsibility of the relevant devolved Administrations to decide how that funding is spent.

[David Linden (Glasgow East) (SNP)]

Quite aside from the Public Accounts Committee findings of Ministers wildly and inappropriately gerrymandering the funding process, I would like to ask the Minister about the Barnettisation of that funding. It is amazing how all the Tory MPs can stand up and say how much money their towns and constituencies are getting, yet it took the Secretary of State four months to confirm to me in writing that the funding would be Barnettised. How much is Scotland due to get and why have we not received it yet?

[Luke Hall]

We will provide further clarity on the Barnett consequentials of the Department’s programme of work following the next spending review.

[Kenny MacAskill (East Lothian) (SNP)]

What recent discussions he has had with (a) firefighter unions and (b) local authorities on the Building Safety Programme.

--- Later in debate ---

[Mrs Sheryll Murray (South East Cornwall) (Con)]

What financial support the Government is providing to local authorities during the November 2020 covid-19 lockdown.

[The Minister for Regional Growth and Local Government (Luke Hall)]

Since the start of the pandemic, we have provided over £7.2 billion directly to councils. We have also confirmed further support for local authorities through the extension of the contain outbreak management fund, and Cornwall will receive an extra £35 million from the additional resources grant and business grants for closed businesses.

[Mrs Murray [V]]

I thank the Government for their generous support to councils during this difficult time. I have two very important crossings across the Tamar in my constituency, owned by Cornwall and Plymouth councils, which have run into financial difficulty. How does my right hon. Friend the Minister advise that this situation should be resolved?

[Luke Hall]

I know that this is a hugely important matter for my hon. Friend and her constituents. Since the beginning of the pandemic, we have provided Cornwall Council with over £60 million and over £30 million to Plymouth City Council. Local authorities should be able to claim for relevant irrecoverable losses from toll bridges and roads. These losses have a named category in the form through which local authorities make their claims. However, it is for local authorities to be responsible for making sure that the claims that they make under the scheme meet the principles that we set out. We would advise her local authorities to consider these carefully before making any submissions.

--- Later in debate ---

[Jon Trickett (Hemsworth) (Lab)]

What assessment he has made of the adequacy of support given to local authorities in areas with high covid-19 infection rates.

[The Minister for Regional Growth and Local Government (Luke Hall)]

Councils’ self-reported figures suggest that local authorities spent an additional £3.6 billion through September as a result of covid. Since the start of the pandemic, we have provided over £7.2 billion directly to councils and are now providing new funding for national restrictions. I hope the hon. Gentleman will also welcome the additional funding of over £40 million that Wakefield Council has received to support its community so far this year.

[Jon Trickett [V]]

Austerity impacted most on the poorer communities right across the north and elsewhere. In Wakefield alone we have lost almost £50 million from local care services, schools, youth support and child services, not to mention the wage freezes for key workers. The impact of covid in damaging community resilience is apparent to all. Is it not time for the Minister to show that he has learned lessons by restoring funding to those communities in difficulty from the cuts and finally giving a rise to the key workers who have done so much to keep our country going?

[Luke Hall]

I am surprised to hear the hon. Gentleman speak like that about local authority when he supported and voted for the local government finance settlement this year. As I said, since the start of the pandemic we have provided £7.2 billion in funding. Wakefield has received £31 million across four tranches of unring-fenced funding, the last including deprivation, population and cost driver indicators, too. It has also received £2 million for test and trace, £7 million from the infection control fund and more than £40 million in additional grants. As the hon. Gentleman failed to do so, may I use this opportunity again to recognise the incredible work of councils, who have been dynamic and energetic in responding to an incredibly difficult period?

[Matt Vickers (Stockton South) (Con)]

What progress the Government have made on the towns fund.

[Luke Hall]

On 27 October, we announced the first seven town deal offers, worth almost £180 million, for Barrow-in-Furness, Blackpool, Darlington, Norwich, Peterborough, Torquay and Warrington. Of course, we look forward to receiving further town deal proposals, including from Thornaby in my hon. Friend’s constituency, in the coming months. We will also bring forward a competitive element of the fund so that more places can benefit from investment that will improve our towns and high streets and drive long-term economic growth.

[Matt Vickers [V]]

I am currently working alongside councillors, businesses and community groups to put together Thornaby’s bid for up to £25 million. We want to get rid of the Eagle hotel and other blights on our town centre as well as improve training and skills opportunities, leisure facilities and cycle routes—and, importantly, we want to make life-changing improvements to housing. Does my hon. Friend agree that local people know their area best? Will he help unblock any bureaucratic barriers that prevent money being spent on local priorities?

[Luke Hall]

Absolutely. I thank my hon. Friend for all his work. The objective of the towns deals is to drive the economic regeneration of towns, including through improving transport and digital infrastructure, supporting skills development and making the most of the planning powers to create a supportive environment for residents and businesses. The towns fund will support mixed-use redevelopment in towns such as Thornaby, creating thriving places for people to live and work. Each town has its own local priorities and should align its proposed interventions with the towns fund intervention framework, as set out in the further guidance.

[Andrew Selous (South West Bedfordshire) (Con)]

What steps he is taking to improve planning policy for Traveller communities.

Non-Domestic Rating (Lists) (No. 2) Bill

Luke Hall Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Tuesday 20th October 2020 Commons Chamber

[Steve Reed]

The hon. Gentleman makes an important point about the need for flexibility. The situation ahead is very unpredictable and uncertain, and we need the flexibility to support businesses and local economies, whatever circumstances we find ourselves in in a few weeks’ or months’ time.

On Second Reading, my hon. Friend the Member for Blackburn (Kate Hollern) asked the Minister a question that has not yet been answered, so I politely invite him to respond to it today. Given that the Valuation Office Agency has a backlog of 50,000 appeals, some dating back as far as 2010, will he share with the House what conversations he has had with the Treasury about how that backlog will be tackled? Because of the pending appeals, councils, which are responsible for collecting business rates on behalf of the Government, have had to divert more than £3 billion away from frontline services. That figure is very close to the in-year funding gap that is leading to cuts in frontline services across the country, as the second wave of infection rises and the economy slips into recession. What a difference that funding would make, if the Government would only make it available to local authorities and public services on the frontline.

Fixing the business rates system is essential if our high streets are to survive, but the Government must also recognise the key role that local government will play in driving local economic recovery. The Government’s broken promises on council funding will restrict town halls’ ability to support struggling local businesses. I am sure I do not need to remind the Minister just how important local authorities have been throughout the pandemic, and that is why it is so important that they are supported financially. Councils have lost £953 million from business rates income between March and July this year alone, according to the Local Government Association, and that accounts for more than a quarter of all income losses for councils over that period.

The Opposition welcome the measures in the Bill, but only as a first step in the much wider reform that is needed to create a level playing field for businesses and to support our high streets to recover.

[The Minister for Regional Growth and Local Government (Luke Hall)]

I thank the shadow spokesman, the hon. Member for Croydon North (Steve Reed), and my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) for their contributions.

We are now familiar with the two improvements that the Bill makes to the business rates system. It moves the date for implementation of the next revaluation in England and Wales to 1 April 2023, and it moves the latest date by which draft rateable values must be prepared in England and Wales to 31 December preceding the revaluation. Both changes can be found in clause 1. Clause 2 simply sets the extent and name of the legislation.

In order to understand clause 1, we first need to consider the main primary legislation for business rates, which is the Local Government Finance Act 1988. All of clause 1 is concerned with amendments to the 1988 Act. Part III of that Act concerns business rates, and it currently requires revaluations in England and Wales to take place every five years from 1 April 2017. Therefore, without amendment to the current law, it would require revaluation to take place in England and Wales on 1 April 2022. The Bill changes that date in a straightforward way by amending the 1988 Act to instead provide for the next revaluation in England and Wales to be on 1 April 2023. It does that both for local rating lists and for central rating lists held by my Department and the Welsh Government. Central lists contain large network properties, such as the electricity supply companies.

We can see the change in the Bill—clause 1(2)(a) adds the words “on 1 April 2023”; clause 1(3)(a) makes the change for England and clause 1(4) does so for Wales. The change to the timing of the draft rating list from no later than the 30 September to 31 December can be seen in equally simple terms in clause 1(2)(b) for local rating lists and clause 1(3)(b) for central rating lists.

That date is the deadline—the latest date by when draft rateable values must be prepared. The Bill will still allow the Valuation Office Agency to publish rateable values earlier than the end of December. We fully intend to give ratepayers as much notice as possible of their draft rateable values, the new multipliers and any transitional arrangements that might be included. Historically, these have been confirmed at the time of the autumn fiscal event, so ratepayers will continue to have several months to pay their bill.

My hon. Friend the Member for Ruislip, Northwood and Pinner raised a point about fiscal events and what might happen in different instances. It is worth putting on the record that it is required within law that the multipliers are produced as part of the local government finance settlement, but we are of course cognisant of the fact that a date in February would be too late. I restate our intention to make sure that they are provided earlier than that—in good time—if events transpire as my hon. Friend described.

Moving the date of the draft rating list also has implications for local government, which has a share in business rates income through the business rates retention scheme. On that point, I assure the Committee that my Department has held discussions with representatives of local government, including the Local Government Association. We intend to make any adjustments as are necessary to the rates retention scheme to ensure that locally retained income is, as far as practicable, unaffected by the revaluation. That will give councils the assurances they need over locally retained rates income. In the revaluation, we will also ensure that local government will have what it needs to issue the new bills in a timely way.

The hon. Member for Croydon North raised an important point about VOA appeals and was quite right to do so. It is worth saying that the new business rates appeals system introduced in 2017 is operating smoothly and ratepayers have been able to make appeals throughout this difficult period. The large volume of appeals under the previous list system showed why the system was in need of reform, with large numbers of speculative appeals clogging up the system and over 70% of appeals leading to no change. The VOA recently delivered some key improvements to the system, addressing specific concerns from stakeholders, including new features frequently requested by customers and agents to make the system easier to use.

The hon. Member for Croydon North is right to highlight that there are still some outstanding cases from 2010. The majority of those cases have been held up by litigation pending the outcome of a Supreme Court case concerning the rateability of ATMs. The Supreme Court issued a decision on the matter on 20 May this year, and the outstanding cases are now being settled. The VOA is engaging with stakeholders and has agreed a timetable to deal with these cases, and I will keep it under close review. He is right to raise that.

[David Simmonds]

Does my hon. Friend agree that, when it comes to the Valuation Office Agency, there is a need to recognise that some business rates appeals concern very significant amounts of money—so significant in some cases that they can imperil the financial viability of a local authority? We can cast our minds back to the circumstances of West Somerset District Council, with which I had some involvement in my time at the Local Government Association. The business rates appeal relating to the nuclear power station in that area, which was the main source of business rates for the local authority, was so big that local government reorganisation was the only solution to make the delivery of local government services in that area viable. In my area, Heathrow airport is the biggest single source of business rate payments, and changes in those payments can lead to significant in-year variations in business rates. Can he give me some assurance that his Department is focused on making clear to the VOA the importance of processing these appeals in a timely manner and giving sufficient scope for local authorities to manage the impact?

[Luke Hall]

I thank my hon. Friend for his intervention. He is entirely right to highlight some of the challenges, and I can give him that assurance. The fundamental review of business rates is considering a number of issues, including the frequency of future revaluations. He is right to make that important point.

I am afraid I cannot agree with the hon. Member for Croydon North about local government funding. We have had exchanges on that important point, and we have different views. The Prime Minister announced last week an extra £1 billion of funding for local government. I am aware of the need for certainty, and we plan to explain the distribution of that funding as quickly as we can. The £4.8 billion that has been provided to local government, including £3.7 billion of un-ring-fenced funding, has been a big support to councils, which are doing an incredible job up and down the country and delivering first-class public services in an extremely difficult and challenging environment.

[David Simmonds]

Does the Minister recognise that the complexity of local government finance is a huge part of addressing public concerns? A top-tier authority such as a London borough will have responsibility for a parking revenue account and a housing revenue account, and it will have business rates income and council tax income. Over and above that, it will expect to see regular income from fees and charges for services that it provides to the public on a traded basis. Although some of that is captured by the core spending power measure, which is usually used by his Department as the critical way to explain the financial position of local authorities specifically and the local government sector in general, does he agree that that could be improved, so that Members and our constituents could grasp in a little more detail the impact that these changes have in their town hall or civic centre?

--- Later in debate ---

[Luke Hall]

My hon. Friend makes a fair point about the need for clarity of message about the spending power of councils, and I am happy to continue conversations with him about how we can look at that. We believe that core spending power remains the most accurate available method to discuss local government finance. That is why we use it when highlighting, for instance, the 4.4% real-terms increase in local government finance this year as part of the local government finance settlement. I thank him for that intervention. He is absolutely right to put that on the record.

We are trying to give councils the tools they need to ensure that they can implement this revaluation, cognisant of the need to provide clarity as part of a fiscal spending event. I restate the point that if that was not possible, we would follow our obligations.

[David Simmonds]

Will my hon. Friend give some consideration to updating the list, which was originally conceived in the days of Lord Pickles when he was Secretary of State at the Ministry? He sought to gather best practice from across the local government sector. While we recognise that the reduction in the cost of biscuits at meetings was not going to bridge any budget gaps, many in the sector—I pay particular tribute to Sir Ray Puddifoot, the leader of Hillingdon, who has just announced his retirement—are masters of the art of looking at different ways to maximise local authority income within the framework provided by the Ministry, to provide the greatest possible consistency and financial stability to their local authority.

[Luke Hall]

My hon. Friend makes a hugely important point, and it is probably one that could be looked at in the even wider context of sharing good practice by local authorities that are doing such an incredible job. That is why we have tried to ensure, in the support we have tried to give councils during the pandemic, that they have the tools and ability to share best practice. We also facilitate that through my Department and our Government, whether that is the Brexit delivery board, for instance, or any of the other vehicles that we use to share good practice.

I put on record my thanks and appreciation to council representatives, groups and the sector as a whole for their role in sharing and providing good practice. The Local Government Association does an incredible job of bringing that type of guidance and support together and ensuring that there are good forums for councils to meet and discuss a wide range of issues, including the one that my hon. Friend rightly highlights on council funding and finances.

We know that it has been a challenging time for councils throughout this pandemic, but that is why we have distributed the funding in the way that we have, working closely with the Department of Health and Social Care. We are cognisant of the pressures still faced by local authorities, which is why our income scheme, the infection control fund and others have been so important to supporting local authorities throughout this pandemic.

We believe that this is a small but important Bill. We are extremely grateful for the support of Members across the House. We believe it is a common-sense solution to the problem faced by councils. I take on board the wider points about business rates that Members have raised today, and I therefore highlight the wider review of business rates that is being conducted. I am always willing to take further representations about the importance of that review. This is a common-sense Bill, and I am grateful for the support of the House.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

[Luke Hall]

I beg to move, That the Bill be now read the Third time.

Although small, this Bill delivers on an important commitment that is vital for ensuring a fair outcome for ratepayers, and I am glad it has been accepted by all Members across the House. I am grateful for the contributions of Members both on Second Reading and in Committee. I would certainly like to put on record my thanks to them for their support of the Bill. I am grateful to the shadow Secretary of State, the hon. Member for Croydon North (Steve Reed), and to the hon. Member for Blackburn (Kate Hollern), who has done a lot of work on the Bill and will know it backwards by the end of its passage. Finally, I put on record my thanks to the Clerks and the excellent civil servants in the Ministry of Housing, Communities and Local Government for helping to steer this piece of legislation through the House. This is an important Bill that represents just one part of the Government support provided to business across this country, and I commend it to the House.

Oral Answers to Questions

Luke Hall Excerpts

Monday 5th October 2020 Commons Chamber

[Tony Lloyd (Rochdale) (Lab)]

What recent assessment he has made of the adequacy of Government funding for local authorities.

[The Minister for Regional Growth and Local Government (Luke Hall)]

We said we would support councils throughout this pandemic, and that is exactly what we are doing. We have provided £4.8 billion in additional funding for spending pressures, including £3.7 billion of un-ringfenced funding. This is in addition to councils’ core spending power rising by over £2.9 billion this financial year, which is the largest year-on-year real-terms increase in a decade.

[Tony Lloyd [V]]

The Minister will know that Rochdale council has lost some £200 million in Government cuts over the last years, and this year it is likely to be £20 million short of money, even with the extra Government funding. The people who will suffer most from this are those dependent on acute services, children’s services and, of course, the elderly and the vulnerable. How does the Minister intend to make sure that they do not suffer?

[Luke Hall]

The hon. Gentleman of course knows that this year’s local government finance settlement saw Rochdale Borough Council receive an increase of £12 million this year, which he did not object to when the finance settlement came through the House in February. More widely, throughout this pandemic we have supported Rochdale with £93 million to local councils, businesses and the local area. If Rochdale council is concerned about its financial settlements or about the financial situation, it should get in contact with my Department at the earliest opportunity. I would say that over half of the £4.8 billion allocated to local authorities has been spent on social care, but I am always happy to discuss it with him further.

[Steve Reed (Croydon North) (Lab/Co-op)]

Councils are facing in-year cuts of around £3 billion because the Secretary of State broke his promise to fully fund councils for the cost of getting communities through the pandemic, and that is according to the Conservative-led Local Government Association. The Minister tries to wish this away by bandying around Government funding intended for specific purposes that cannot be used to plug gaps in the council’s general funds. Since he would not wish to try to pull that same trick again here, would he tell the House which services he now expects councils to cut to plug the funding gap created by his broken promises?

[Luke Hall]

Let us step back and look at the facts here. If we look at the local government finance settlement—the hon. Gentleman did not object to it in February; he supported it—and at the fact that local government has reported a £3.1 billion increase in spending pressures for covid, we have supported them with £4.8 billion, including £3.7 billion of un-ringfenced funding. What is not surprising is the hon. Gentleman turning up again today and talking down councils and their ability to respond to this crisis. Local authorities are proving themselves to be a resourceful, dynamic force, and we should be praising them.

[Mr Clive Betts (Sheffield South East) (Lab)]

Could I say that the Government’s decision to help councils with loss of funding, particularly for leisure centres, parking revenue and such things, is welcome? There is one group of authorities, however, that have not been compensated—the councils that run their leisure services at arm’s length. I raised this with the Minister’s predecessor back in July, and the response I got was that the Government

“are very serious about tackling it.”—[Official Report, 9 July 2020; Vol. 678, c. 1224.]

Since then, because Sheffield has lost over £10 million, which it has not been compensated for, from its leisure centres’ loss of income, we have written as Sheffield MPs to the Secretary of State twice—once in August and once in September, the second with the local leisure clubs—and we have not had a response. Could the Minister therefore update the House on what is happening in general on this issue, and will he agree to meet Sheffield MPs to discuss this issue, which really affects our city and its finances?

[Luke Hall]

I thank the Chair of the Select Committee for his question. We recognise the vital role leisure centre facilities play in keeping our communities safe and protecting mental health. We are working closely with the Department for Digital, Culture, Media and Sport on a further package of support for leisure centres. I am happy to meet the hon. Gentleman and other Sheffield MPs to discuss the matter.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

What steps he is taking to support development on brownfield sites.

--- Later in debate ---

[Sir George Howarth (Knowsley) (Lab)]

What steps he is taking to ensure that local authorities receive adequate funding for additional costs related to the covid-19 outbreak.

[The Minister for Regional Growth and Local Government (Luke Hall)]

We have provided local authorities with an unprecedented package of support, including £4.8 billion funding for spending pressures, £3.7 billion in un-ring-fenced grants, and £1.1 billion for the infection control fund. We have also introduced a co-payment scheme to help councils recoup irrecoverable losses in sales fees and charges. In total, we have committed over £28 billion to local areas to support councils, businesses and their communities since the start of the pandemic.

[Sir George Howarth [V]]

All of which is welcome, but last week the Liverpool City Region Combined Authority called for a comprehensive Government-backed package to deal with the problems for the local economy that will be caused by the introduction of the latest covid-19 measures. Today, the combined authority and the Metro Mayor announced a £40 million welcome package to support local businesses and jobs. Will the Minister agree to hold an urgent meeting with local MPs, the combined authority and the Metro Mayor to discuss what further assistance the Government can provide to support our local economy?

[Luke Hall]

The right hon. Gentleman will be fully aware that Knowsley has received £30 million in additional un-ring-fenced spending to deal with pressures resulting from the pandemic, on top of the £10 million increase in its core spending power this financial year. More widely, Knowsley received £51 million to support councils, businesses and the community. He will be interested to know that to prepare for local outbreaks we have provided a £300 million grant to all upper tier authorities to develop strong and effective local outbreak plans. In relation to ongoing engagement, I met the Mayor of Greater Manchester last week and I believe he is meeting the Secretary of State tomorrow. We are, of course, happy to continue those discussions.

[Sarah Olney (Richmond Park) (LD)]

For what reasons he plans to introduce the future homes standard in 2025.

--- Later in debate ---

[Dan Jarvis (Barnsley Central) (Lab)]

When he plans to publish the White Paper on English devolution and local recovery. [R]

[The Minister for Regional Growth and Local Government (Luke Hall)]

The Government intend to bring forward the English devolution and local recovery White Paper in due course, setting out how we will partner with places across the UK to build a sustainable economic recovery. I was very pleased to see that the parliamentary order to implement the Sheffield city region deal in law was made in July, and I congratulate the hon. Gentleman on all his work and support in finally reaching that significant milestone in his work so far as Mayor.

[Dan Jarvis [V]]

I am grateful to the Minister for his response. He will know that devolution has the power to transform people’s lives and local economies, but as a Mayor, it too often feels like I do not yet have the powers and resources to make transformative changes. The White Paper represents a golden opportunity to reset the dial, so does he agree that to properly empower local and regional leaders, the Government should commit to place-based, multi-year, flexible budgets so that we can better deliver for our communities?

[Luke Hall]

I thank the hon. Gentleman for his question. I was delighted to meet him and nine colleagues from across the country to discuss their representations about the upcoming White Paper. We are genuinely pleased with the combined authority Mayors and the progress that they are making, but of course, we recognise that there is more to do. We will publish the White Paper in due course.

[Kate Hollern (Blackburn) (Lab) [V]]

In the 2019 Conservative manifesto, the Government promised that every part of the country would have the powers to shape their own destiny. Given the broken promises that councils have had from the Government recently, can the Minister confirm that the White Paper honours that manifesto pledge, and that local leaders will have the powers to decide what works best for their communities?

[Luke Hall]

I am not exactly sure what promise the hon. Lady was referring to, but we have certainly kept our promises to protect councils during this pandemic by providing them with billions of pounds of funding to support their covid response. We see the devolution and local recovery White Paper as an exciting opportunity to lay out our plans for devolution in this Parliament. We will bring it forward in due course, and I am very happy to listen to her representations about what should be in it.

[Sir Roger Gale (North Thanet) (Con)]

What steps he is taking to ensure that high-quality agricultural land is not used for housing developments.

--- Later in debate ---

[Dan Jarvis (Barnsley Central) (Lab) [V]]

The current top-down centralised response to covid is not working anywhere near as well as it needs to. Properly integrating council leaders and metro Mayors into the decision-making process will help protect lives and livelihoods. May I ask the Minister or the Secretary of State to ensure that, together, we work to achieve properly joined-up Government and that local and regional leaders are treated like partners and not passengers? [R]

[The Minister for Regional Growth and Local Government (Luke Hall)]

The hon. Gentleman is absolutely right. Of course we are in regular contact with the M9 group of Mayors about the covid-19 response and indeed, as I have said, we have meetings with him and colleagues tomorrow with the Secretary of State. Metro Mayors do occasionally attend Cobra meetings where it is appropriate. In relation to the pandemic, it is particularly important that we recognise the crucial working relationship with Public Health England and the fact that we are led by the chief medical officer. I completely agree with the hon. Gentleman that the importance of close working with metro Mayors up and down the country is absolutely vital.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

My right hon. Friend knows that I have previously raised this issue about ensuring that new build homes meet the required standard. Sadly, my own constituency has had cases of residents moving into new properties with considerable issues on the moving date, such as, for example, a flooded kitchen. Such situations are unacceptable, and we need to see every home built to high standards now and also fit for the future in environmental standards and connectivity. Will my right hon. Friend ensure that the new homes ombudsman service will hit the ground running and protect residents purchasing new build homes?

--- Later in debate ---

[Alison McGovern (Wirral South) (Lab)]

You and Ministers, Mr Speaker, will remember that, three and a half years ago, New Ferry in my constituency suffered from a terrible gas explosion, which hurt people and left a massive hole in our town centre. I am grateful that, this week, Ministers will meet me to discuss progress that we are making rebuilding New Ferry. I simply ask the Minister if he will join with me to publicly thank, and place on the record the thanks of all of us to, the people of New Ferry for the work that they have done to rebuild our town centre.

[Luke Hall]

I absolutely agree with the hon. Lady. I pay extreme tribute to the residents, businesses and charitable organisations in New Ferry who have worked so hard to recover and get the town back on its feet over the past three years. I know that she is meeting one of my ministerial colleagues later this week, but as a Local Government Minister I am also at her disposal to discuss this hugely important matter in her constituency.

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

Does my right hon. Friend agree that we need to address the inherent unfairness in the operation of the housing infrastructure fund, which allocates 80% of its budget to London and the south-east and only 20% of it to the rest of us?

[Christian Matheson (City of Chester) (Lab)]

  Managing the coronavirus pandemic has already cost Cheshire West and Chester Council over £35 million. Despite Government support, which I welcome, it is still £8 million behind on its current budget, which is already depleted by £330 million since 2010 by Government cuts. Will Ministers now commit to providing the support to make good the £8 million deficit that has been caused by the management of the coronavirus crisis?

[Luke Hall]

As I said, we have provided £4.8 billion to local authorities up and down the country to support them with the cost of the pandemic, and £3.1 billion has been spent in addressing those pressures. The hon. Gentleman will be aware that his council has received £21 million in additional covid funding on top of the increase in core spending power of almost £18 million this year, which of course he supported.

--- Later in debate ---

[Munira Wilson (Twickenham) (LD)]

  In ensuring that children with special educational needs and disabilities have the provision that they need locally, the London Borough of Richmond is running a cumulative deficit of some £15 million in the high needs element of its dedicated schools budget, putting wider council finances and services at risk. Will the Secretary of State agree to meet me, representatives of the council and the Department for Education to find a workable solution to this untenable situation? Our discussions with the DFE have proved fruitless so far.

[Luke Hall]

I thank the hon. Lady for her question. Of course she is right that the dedicated schools grant is administered by the DFE, which is responsible for its amount and allocation, but we are certainly working closely with the DFE, the Chartered Institute of Public Finance and Accountancy and the sector to understand what more can be done to mitigate the immediate risks. I am personally very happy to meet her and her council to have a discussion about what more can be done.

[Mr Speaker]

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.

Non-Domestic Rating (Lists) (No. 2) Bill

Luke Hall Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution & Ways and Means resolution: House of Commons
Wednesday 30th September 2020 Commons Chamber

[The Minister of State, Ministry of Housing, Communities and Local Government (Luke Hall)]

I beg to move, That the Bill be now read a Second time.

This Bill delivers on an important Government commitment and addresses ratepayers’ concerns by setting in law the date of the next business rates revaluation at 1 April 2023. By doing so, we can ensure that future business rates bills will better reflect the exceptional impact of the coronavirus outbreak on the commercial property market.

Business rates bills are based on the rateable value of a property, which, broadly speaking, represents its annual rental value. Rateable values, in combination with the business rates multiplier and reliefs, determine rates liabilities and are assessed by the Valuation Office Agency independently of Ministers. Since the current system of business rates was introduced in 1990, the Government have had frequent revaluations of rateable values to ensure that they remain up to date. Those revaluations ensure that the amount paid in business rates is fairly distributed among all ratepayers, having regard to the value of the property they occupy.

At the revaluation, all rateable values are based on the rental property market at a set date called the valuation date. The valuation date is set prior to the revaluation taking effect, so that the Valuation Office Agency has time to prepare the valuations. For example, at the last revaluation in 2017, the valuation date was 1 April 2015, which means that current rateable values are based on the market at 1 April 2015.

The next revaluation was scheduled to take effect from 1 April 2021 and would have been based on rental values at 1 April 2019. That was decided in spring 2018 and was the right thing to do at the time, but given what we now know about the coronavirus outbreak and its potential to affect the rental property market, it would not be right to continue with the 2021 revaluation. Continuing to implement the next revaluation on this schedule would have created additional uncertainty for ratepayers at an already uncertain time. It would also have meant that the underlying basis for bills would not have reflected the impact of the outbreak on the commercial rental market.

The Government therefore took the exceptional step of postponing the implementation of the next revaluation in order to give certainty to ratepayers and ensure that the next revaluation reflects the changes to market conditions as a result of the pandemic. The Bill will therefore set the date for implementation of the next revaluation in England and Wales at 1 April 2023. The revaluation will be based on rents at 1 April 2021, a date that we have already set using existing powers in secondary legislation.

The Bill will also change the latest date by which the Valuation Office Agency must publish draft rateable values in the lead-up to the revaluation. That date will be changed from 30 September to 31 December in the preceding year, which will allow us to align the publication of the draft rateable values with decisions normally made at any autumn fiscal event on the multipliers and transitional arrangements for the revaluation.

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

I understand the reasons why we have postponed revaluations on a number of occasions since 2010. Does that not illustrate the changing nature of the commercial world and the need to move to a different system that is more responsive to the realities of trading on our high streets?

[Luke Hall]

I thank my hon. Friend for his point. We are currently undertaking a fundamental review of business rates, and as part of that exercise we are considering the frequency of future revaluations. When deciding whether to have more frequent revaluations, we need to strike the right balance between more up-to-date assessments, which would flow from such a reform, and the uncertainty it could create, with more regular changes to bills, while also taking into account the time it currently takes to process changes and the impact that any changes that might be required would have on the current system. I certainly understand, however, the point that he has continually made about annual revaluations and how that could further improve the system. I am sure that will be considered.

[Sarah Olney (Richmond Park) (LD)]

I have listened carefully to what the Minister has said about the revaluation moving from April 2021 to April 2023, but I wonder whether there is a danger that those properties that might have a substantial revaluation downwards will be paying over the odds on their rates for two further years, at what we all know is going to be an incredibly tough time. I am thinking in particular of retail businesses and a very challenging trading environment. Will he consider changing the date from April 2023 to later in 2021, particularly given the comments he has just made about the need for more regular revaluation?

[Luke Hall]

I thank the hon. Lady for her point. I know it is a matter in which she takes a personal interest and that she has raised it with Ministers. The point stands that we have to have a system that takes into account the impact of the pandemic and, as is the case with the current system, the time it takes the VOA to go through the process. We think that this is the measure required at this time.

We took the step to postpone the implementation of the next revaluation so as to give certainty to ratepayers and to ensure that the next revaluation reflects the changes in the market conditions as a result of the pandemic. The Bill will therefore set the implementation of the next revaluation date in England and Wales as 1 April 2023. On revaluation based on the rents of 1 April 2021, we have, of course, already set that out in secondary legislation.

Business rates is a devolved policy area, but with agreement from the Welsh Government the Bill does also apply to Wales. As in England, the next revaluation in Wales will be implemented on 1 April 2023, and the date of publication of Welsh draft rateable values will also be changed to 31 December. Entirely different legislation applies in Northern Ireland, which has only recently implemented a revaluation from 1 April 2020, and Scotland, where I understand the Scottish Government have also committed to implementing their next revaluation on 1 April 2023. There is, therefore, a good degree of agreement across the UK that the next business rates revaluation is moved, to better reflect the impact of the coronavirus. Notwithstanding some of the points raised, I hope that is accepted across this House.

As I have said, this is an exceptional step and the Government remain committed to frequent revaluations of business rates. The fundamental review of business rates will look at not just the frequency of revaluations but how they are done, and will report on those aspects of the business rates system in spring. However, this is a step that we can take now to improve business rates bills, and that is why we have brought this Bill forward so quickly.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for bringing forward the Bill. He has set out why it is essential—I and others in this House believe it is, too—in the current economic situation. We need to do all we can to support our businesses and see them through this so that we can reap the rewards in the years to come. When businesses are better off, they are able to help the local economy and pay their taxes to Her Majesty’s Revenue and Customs, national insurance and council pockets. Rather than seeing this as a bail-out, as some do, I see it as a very sensible investment for the future.

[Luke Hall]

I thank the hon. Gentleman for his point. He is right that the Bill’s provisions form only part of the support that we have provided to ratepayers as a result of the pandemic. We have already ensured that eligible businesses in the retail, hospitality and leisure sectors will pay no business rates at all in 2020-21. This is a relief worth £10 billion, which, when combined with the businesses receiving small business rate relief, means that more than half the ratepayers in England will pay no rates this year. This forms part of the business rates measures introduced in England since 2016, which, when taken together, will be worth more than £23 billion over the next five years. These include the doubling of small business rates relief, changes to the threshold, which mean that 700,000 small businesses—occupiers of a third of all properties—now pay no business rates at all, and switching the indexation of business rates from the retail price index to the consumer prices index. That switch alone will save businesses £6 billion over the next five years.

This Bill forms a critical part of the package of reforms and support that we are introducing to business rates, which will result in a property tax that better reflects coronavirus-related challenges in the commercial rental market and provide support to those who need it most, and which is simple and easy for businesses to administer. I commend it to the House.