Oral Answers to Questions

Debate between Luke Hall and Steve Reed

Monday 11th January 2021 Commons Chamber

[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?

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

Debate between Luke Hall and Steve Reed

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.

Oral Answers to Questions

Debate between Luke Hall and Steve Reed

Monday 5th October 2020 Commons Chamber

[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.