Residential Estate Management Companies

Martin Wrigley Excerpts

Tuesday 22nd April 2025 Westminster Hall

[Gideon Amos (Taunton and Wellington) (LD)]

It is a pleasure to serve with you in the Chair, Mr Stuart. I congratulate my hon. Friend the Member for South Devon (Caroline Voaden) on securing a debate on residential estate management companies—an important issue for many of us up and down the country, and many of our constituents.

My hon. Friend has done a service both to her constituents and to people across the country by exposing, and placing on the record, the scandal of poor management companies. I do not want to denigrate companies that do a good job for the common areas and spaces that they are contracted to look after, but, as we have heard today, Members of Parliament too often hear how far too many companies are fleecing residents, charging rip-off prices and failing to respond to reasonable requests for repairs, information or accounts of how residents’ money is being spent.

[Martin Wrigley (Newton Abbot) (LD)]

In the town of Teignmouth in my constituency of Newton Abbot, FirstPort has been buying up other management companies, and the sinking funds—the contingency paid by residents—appear to have disappeared: they have been sunk. Does my hon. Friend agree that that should be looked into?

[Gideon Amos]

I completely agree with my hon. Friend, who is doing a great service to his constituents by exposing that problem.

In too many constituencies, residents are plagued by rogue developers who provide housing under a freehold tenure, but force residents to accept the estate managers or shared owners of public spaces within the developments. We have heard shocking examples from all over the country, which surely demonstrate the scale of the problem and the need to act. In one block of flats in my constituency of Taunton and Wellington, people have been unable to get repairs for a leaking roof from the owner of a building in Corporation Street—it has been leaking for nine years without being attended to.

Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025

Martin Wrigley Excerpts

Wednesday 26th March 2025 General Committees

[Martin Wrigley (Newton Abbot) (LD)]

It is a pleasure to serve under your chairship, Ms Hobhouse.

I would be delighted to invite the Lib Dem leader of Somerset council to elaborate on the condition in which he found the council when he took over, if I thought that the hon. Member for Broxbourne wished to read it; I suspect he would not.

I thank the Minister and the Government for some things, such as for including the districts in the final invitation to participate in this process. I thank them for not allowing Devon county council in its outrageous attempt to stop the elections in Devon, knowing that 66% of the existing Conservative councillors now intend not to re-stand. I wonder why they wanted to stop the elections. They put forward a proposal that had no consensus across Devon whatever. I also thank the Minister for the multi-year settlements that are in sight, stopping the hand-to-mouth and “Hunger Games”-type funding that has been the scourge of local councils across the country.

I am, however, very worried about the timescales, the volume of work and the cost of the work required of local councils. I am particularly worried about what might happen with the projected 2027 elections if the timescales are not met. Will the Minister clarify the dates that we are looking at in this process? Which are fixed and which flexible? How will the process be managed as we go through, and should we not meet the fixed dates that are set out so far? What will happen with multi-year settlements for councils that are not involved in this first phase of reorganisation? Can we expect to see those coming through sooner rather than later, please?

[Jim McMahon]

All those are fair questions. On the timetable, there are in effect three tranches. The first tranche is Surrey, which is being brought forward because there cannot be devolution as a single county unless we do the reorganisation and create a combined authority after that. This is fairly well covered, but it has quite significant issues of debt that need to be reconciled as part of that process. Surrey has 9 May as the deadline for its final proposals.

Areas that have had their elections postponed are in the devolution priority programme. They have until 26 September to submit their final proposals. All other areas have until 28 November to submit their final proposals. I will just say that there is sufficient time. Surrey is clearly the exception, and that is an accelerated timetable by agreement with the local authorities in that area—we will ensure that adequate resources are provided to meet that challenge. For all other areas, however, we believe that there is sufficient time. I should also say that the difference between September and November as the end date takes into account the election period, recognising that the preparatory work that would take place otherwise would not take place then.

[Martin Wrigley]

The issue with most such situations in the past has been not only a short period of time for councils to respond, which they typically have managed to do, but the prolonged period of radio silence once those responses have been sent to Government. Can the Minister assure us that the Government will respond quickly to the proposals, so that councils can get on with them?

[Jim McMahon]

We absolutely understand that that gap of silence can be undermining to the process. Even conflicting advice or information allows people to fill in the gaps or exploit the situation. Clarity is needed. I think we have done that. Whenever we have brought a statement to the House, it has been extremely well attended. I think that the two on this issue have run for more than an hour, in terms of parliamentary interest.

On the interim proposals, the deadline was on Friday and we submitted the written statement to Parliament on the Monday; we submitted that the minute that Parliament reconvened. So we do want to ensure that that communication is there.

We will marshal departmental capacity. We are speaking to the LGA, to the County Councils Network and to the District Councils’ Network, and we appreciate the leadership that they have shown. They have been quite challenging in their representations at points, but I think they have done an excellent job in reflecting the on-the-ground reality back to us, and we have appreciated that.

On the areas in scope, we have provided an additional £7.6 million to enable proposals to be developed, so it is not a financial pressure entirely on local government to do that. We want and expect, in some areas, that they will have a unified proposal that they can rally around and for which there is broad support, as that would make everyone’s lives easier. We also live in the real world and understand that there may be different views on what a good outcome is. I think that is legitimate, and it should be allowed for in the process. The Government’s role at that point will be to take a view on the proposal that best meets the criteria set out in terms of efficiency, sustainability and, importantly, identity, as having that local anchor is a very important part of that too. With that within the process, we can take into account the range of different views.

I have covered the population size issue, in terms of that being a starting point. That does not mean that it is the end point for every area; but we do not want to reset that number. I can guarantee that if we were to say, “Right, it is not 500,000 any more; it is the mid-300,000s, and that is the new starting point,” I would get a queue of councils asking, “Can we have a conversation about the mid-100,000s?” That completely undermines the principle for doing local government reorganisation and takes us back to square one. Having a starting point that can be flexed, with some give—I think going to the mid-300,000s is give, but let us see, given that the other way is give too—is where we need to be.

Even though this SI of course deals with the election postponement in these county areas, district council elections will follow, and with a fair wind—I accept there is a way to go yet, and we are still in the consultation phase, which is important—they will also have mayoral elections in those areas for the first time. For the first time, they will actually be able to receive further powers and further budgets from central Government in a way they have not before. So, this should be welcomed. For democrats in the room, this is additional democracy, accountability, freedoms and flexibility, which is genuinely rewiring the way that we govern England. It is long overdue.

English Devolution and Local Government

Martin Wrigley Excerpts

Wednesday 5th February 2025 Commons Chamber

[Angela Rayner]

This is one part of a package, through which we are trying to reverse the decline and decay that we saw under the previous Conservative Government. They made cuts of 23% in a decade, as I say, whereas we have implemented a cash-terms increase for local authorities. Devolution is part of that agenda. We want to see Cornwall continue to thrive; I am glad that my hon. Friend is in his place, and we will continue to work with him to deliver for the people of Cornwall.

[Martin Wrigley (Newton Abbot) (LD)]

I refer the House to my entry in the Register of Members’ Financial Interests. I thank the Deputy Prime Minister for allowing the people of my constituency to vote in the Devon county council elections this year, and I congratulate her on seeing through the tired Tory administration, which was seeking to avoid the voters’ verdict. May I ask her for an assurance that when she sends out her invitation to the two-tier areas, that will include district councils as well as the county council, so that we get a representative view from across the entire area?

[Angela Rayner]

I thank the hon. Member for welcoming the clarity we have delivered today. As I set out in my statement, we will be writing out to two-tier areas. We want to engage with all tiers in those areas, and the Minister for Local Government and English Devolution will continue that work. If the hon. Member wants to meet the Minister at a future date, I am sure the Minister will be happy to meet him.

Oral Answers to Questions

Martin Wrigley Excerpts

Monday 20th January 2025 Commons Chamber

[Alex Norris]

As my hon. Friend alluded to, RAAC is a devolved matter. The responsibility for ensuring that buildings are safe is, of course, that of the owner, but we keep RAAC under active consideration in case any support is needed.

[Martin Wrigley (Newton Abbot) (LD)]

I draw the House’s attention to my entry on the Register of Members’ Financial Interests. At Teignbridge district council, I oversaw the commencement of council house building for the first time in 30 years. Will the Secretary of State meet me and others to discuss what can be done to make it easier for other councils to build more council homes?

[Angela Rayner]

I commend the hon. Gentleman for that work. We want councils to be able to contribute to council housing. I will happily get the Housing Minister to meet the hon. Gentleman.

Local Government Reorganisation

Martin Wrigley Excerpts

Wednesday 15th January 2025 Commons Chamber

[Jim McMahon]

The hon. Member is conflating two separate issues. One is the process of reorganisation, and his area of Harrogate has been through that process, including the postponement of elections to facilitate it. On housing development, if he wants to stop speculative development and to have control of what is built in local communities in Harrogate, the best way to achieve that is to have a plan in place where developers can be held to account.

[Martin Wrigley (Newton Abbot) (LD)]

I draw attention to my entry in the Register of Members’ Financial Interests.

Talking of localism, district councils provided a useful amount of local accountability. How will the Minister ensure that local accountability continues when the regional identity may be different? May I also ask about the future of towns and parishes, which are not mentioned at all, and neither are national park authorities? How will those be empowered to have more local responsibility?

[Jim McMahon]

The White Paper was directive on this issue. I can only assume the hon. Gentleman has not read it, or he got bored and gave up halfway through—I will leave him to answer that. Over quite a long period of time, councillors have been relegated to the back benches if they are not in the cabinet, and we do not believe that is right going forward. We want local councillors to be frontline councillors, community conveyors, leading in their local communities and getting things done. However we marshal the system—regardless of the size of the council, where it is, whether it is a unitary council in a met area or a reorganised council in a shire county—localism has to be at its heart.

Non-Domestic Rating (Multipliers and Private Schools) Bill (Third sitting)

Martin Wrigley Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

[The Chair]

In the absence of the hon. Member for Mid Dorset and North Poole, I call Martin Wrigley.

[Martin Wrigley (Newton Abbot) (LD)]

I beg to move amendment 1, in clause 3, page 3, line 29, after “hospitality” insert “, manufacturing”.

This amendment would add manufacturing businesses to the types of business that could qualify for use of the lower multiplier.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 2, in clause 3, page 3, line 33, after “hospitality” insert “, manufacturing”.

This amendment is consequential on Amendment 1.

Amendment 3, in clause 3, page 4, line 9, after “hospitality” insert “, manufacturing”.

This amendment is consequential on Amendment 1.

Amendment 4, in clause 3, page 4, line 13, after “hospitality” insert “, manufacturing”.

This amendment is consequential on Amendment 1.

Amendment 5, in clause 3, page 4, line 31, after “hospitality” insert “, manufacturing”.

This amendment is consequential on Amendment 1.

Amendment 6, in clause 3, page 4, line 35, after “hospitality” insert “, manufacturing”.

This amendment is consequential on Amendment 1.

[Martin Wrigley]

We have tabled this amendment to explore the possibility of including manufacturing businesses. Manufacturing is important, and we know that it is struggling. By adding manufacturing businesses, we might be able to help them in the same way as we intend to help hospitality, retail and leisure. Manufacturing is a vital area that we have lost too much of in the past however many years. This relief would be a small help to enable manufacturing businesses to recover. That is why we would like to add the category of manufacturing to the provision.

[Jim McMahon]

Amendments 1 to 6 deal with eligibility for the new lower multipliers. Under the amendments qualifying manufacturing properties would be eligible for the two new lower multipliers the Bill introduces for qualifying retail, hospitality and leisure properties from 2026-27.

Let me start by highlighting that the Government recognise the importance of the manufacturing sector, and we have identified advanced manufacturing as one of the eight growth-driving sectors as part of our industrial strategy, recognising the contribution it makes to our economy. However, the provisions in the Bill are about delivering our manifesto pledge to protect the high street. To that end, we aim to introduce permanently lower tax rates for retail, hospitality and leisure properties from 2026-27. To ensure that this tax cut is sustainably funded, we intend also to introduce a higher rate on the most valuable properties—those with rateable values of £500,000 and above. As I said before, this represents just 1% of the ratings system; the context is important here.

The measures in the Bill will provide certainty and support for RHL businesses, which are the backbone of the high street. The existing RHL relief has been repeatedly extended year on year as a temporary stopgap. It has created a cliff edge for businesses, and those sectors have repeatedly demanded clarity and certainty. We have been clear that the eligibility for the new lower RHL multipliers will broadly follow those already defined in the current retail, hospitality and leisure relief system. On Second Reading, the hon. Member for Mid Dorset and North Poole spoke about her experience of owning a café and the need for Government support for such businesses. That is precisely why we are enabling the introduction of these new multipliers for those types of property through the Bill.

The amendments in the hon. Lady’s name would expand the scope of this support to include manufacturing properties, but that does not match our intended goal of supporting the high street in a targeted way through the Bill. Against the current fiscal backdrop, extending eligibility to other sectors may dilute the support that the Government can offer to retail, hospitality and leisure properties. It may even require a higher rate on properties with rateable values of £500,000 or more to fund the new lower multipliers sustainably.

I reiterate that the Government are committed to supporting the manufacturing sector. At the Budget, the Government announced £975 million for the aerospace sector over five years, over £2 billion for the automotive sector over the same period, and £520 million for a new life sciences innovative manufacturing fund. For the reasons I have outlined, we cannot accept the amendments, but I hope that the Committee is assured of the Government’s continued commitment to the manufacturing sector.

[Martin Wrigley]

I am a little reassured by the Government’s intentions to support the manufacturing industry and look forward to their efforts to do so. I am certainly reassured by the support for the high street, which is very important to all. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 10, in clause 6, page 6, line 20, at end insert

“, provided that the condition in section [Requirement for the Government to commission an independent review on the impact of the higher multiplier] is met.”

This amendment provides that the provisions of Clauses 1 to 4 of the Bill would only come into effect when the Government has held an independent review that will consider the impact the new higher multiplier will have on businesses with a rateable value of over £500,000.

New clause 2—Requirement for the Government to commission an independent review on the impact of the higher multiplier—

“(1) The condition in this section is that the actions set out in subsections (2) to (5) have been completed.

(2) The Secretary of State must appoint an independent person to carry out a review assessing the impact that the new higher multiplier will have on businesses with a rateable value of over £500,000.

(3) After the review, the independent person must—

(a) prepare a report of the review, and

(b) submit the report to the Secretary of State.

(4) A report prepared under subsection (3)(a) must be submitted to the Secretary of State within twelve months of the appointment of the independent person under subsection (2).

(5) On receiving the report, the Secretary of State must, as soon as is reasonably practicable, lay a copy of the report before Parliament.

(6) In this section, references to an ‘independent person’ are to a person who appears to the Secretary of State to be independent of the Government.”

This new clause requires the Government to hold an independent review on the impact of the higher multiplier on businesses with a rateable value of over £500,000.

New clause 4—Review of impact of new multipliers—

“(1) Within eighteen months of the day on which sections (1) to (4) of this Act are commenced, the Secretary of State must conduct a review of the impact of those sections.

(2) The review must consider —

(a) the impact of the introduction of the lower multiplier on qualifying retail, hospitality and leisure hereditaments,

(b) the impact of the introduction of higher multipliers in relation to a hereditament for which the value is £500,000 or more.

(3) The Secretary of State must, as soon as is reasonably practicable, publish the review and lay a copy of that review before Parliament.

(4) As part of the review the Secretary of State must consult with such parties as they see fit including—

(a) businesses,

(b) the Valuation Office Agency; and

(c) Billing Authorities.”

This new clause would require the Secretary of State, within 18 months of sections 1 to 4 of the Act being commenced, to review and consult on the impact of new multipliers.

--- Later in debate ---

[Jim McMahon]

I will speak to both now. Clause 4 makes two small consequential amendments to the existing legislation to reflect the addition of the new multipliers. There are other amendments we will need to make to regulations to reflect the changes in the Bill, but we will do that using existing powers once the Bill has passed. We have not taken any further powers to make consequential changes.

As hon. Members will know, the Bill provides the basis for how the two new retail multipliers and the higher multiplier will be set. In doing so we are deliberately constraining the maximum levels of the new tax rates by reference to the existing business rate multipliers. Those guard rails prescribed in the legislation provide that the basis for how the new rates will be set will be at the next Budget. For the two retail, hospitality and leisure multipliers, the Bill ensures that the rate may not be more than 20p in the pound lower than the small business rate multiplier. For the higher multiplier, it cannot be more than 10p above the standard multiplier.

I have outlined how the new multipliers will be set at the next Budget, but I trust that hon. Members will also be reassured that when the new multipliers are set, the Treasury intends to publish analysis of the effects of the new multiplier arrangements, taking into account the effects of other changes in the 2026 Budget. The impact assessment that has been referred to in this debate and in the evidence session will be picked up later on in the process. That work will not stop with the next revaluation. As with all taxes, the Government will keep the policy and its effects under review. It is therefore not necessary to impose that requirement in legislation.

With that explanation of the Bill provisions, the process for setting the tax rates, and HMT’s intention to provide analysis of the effects of the new multiplier arrangements, I hope I have provided the necessary assurances for new clause 1 to be withdrawn.

[Martin Wrigley]

I rise to speak to new clause 1. I thank the Minister for his words. It is, as we are discovering, an incredibly complex and arcane way of creating taxes that will have an impact on many high street businesses. While the Treasury analysis will tell us how the multipliers have hit, and the numbers that are done from a taxation point of view, it will not answer whether the Bill has achieved what it set out to do, which is to provide the necessary relief.

New clause 1 looks more at the impact on the businesses and whether the provisions had a measurable impact on economic growth. That is not the same as an analysis from the Treasury of the changes in the bills that are being presented to people; it is looking at the effect and impact, to see whether the Bill is achieving the desired outcome. That is why we would like to see the measurement included.

As an engineer and a scientist, I believe in a feedback mechanism: something that measures what has been achieved against what has been required. We believe that was missing in the Bill, and we would like to see it, which is why we have asked for new clause 1 to be considered. The work is there and will be beneficial to one and all. I do not see it as a significant barrier to the Bill progressing, but as a positive feedback mechanism that will enable us to determine the effectiveness of the support on the desired areas and businesses, including high streets, which are so important.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

--- Later in debate ---

[David Simmonds]

As always, it has been a pleasure to serve with you in the Chair, Dame Siobhain. In that Christmas spirit, I thank the Minister for his constructive engagement. It is characteristic of several of the Ministers in the Department, and it has been enormously helpful. I put on record my thanks to the Whips; I appreciate that the scheduling of this relatively short piece of legislation meant that it could have taken up a great deal of time. We have recognised the point, which was made impactfully yesterday, that its overall impact is limited and moderate, so we have sought to approach it in the light of that.

We may have a fairly significant disagreement with the Government about the intent behind the Bill, in the way that it approaches both local government funding and the situation with independent schooling, but we have to recognise the numbers. I thank the Minister and his colleagues very much for the way in which they have addressed this.

[Martin Wrigley]

This has been my first Bill Committee experience, and it has been interesting and delightfully short. I am delighted to see it executed so effectively and efficiently. I thank the Minister for all his thoughtful and thorough explanations of the different bits and pieces, and I really hope that the legislation will provide good support to our high streets, which desperately need surety about their situation. I thank everybody involved, and I particularly thank the Clerks for their help in explaining to me how the process would work and helping us through it.

[The Chair]

I think the niceness is complete.

Question put and agreed to.

Bill accordingly to be reported, without amendment.

Non-Domestic Rating (Multipliers and Private Schools) Bill (First sitting)

Martin Wrigley Excerpts

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Lewis Cocking]

Q The first question was about whether it would put you off doing bigger stores and make you concentrate on smaller stores. Will you give us a flavour of what the Bill means for your business?

Paul Gerrard: Thank you. We are very much a convenience business, so the average size of our stores is about 3,000 square feet. I can think of a couple of stores that are bigger, but they are very much legacy stores from many years ago. In general, our approach is to open small stores—convenience stores—so the question about how the Bill will affect our decision to open bigger stores does not really apply. We are very much a small store operator.

[Martin Wrigley (Newton Abbot) (LD)]

Q Thank you for coming today. The Co-op is a vital element of many of the communities in my area in south Devon. It is a mainstay of many communities. In the Bill I am interested in the jump between the small business rates and the large business rates based on a rateable value of £51,000. Is that an issue for you in terms of deterring expansion and improvement of stores, or is that not something that you worry about?

Paul Gerrard: As I think I said in an answer to an earlier question, it is one of the factors that we will bear in mind. I do not think it would necessarily be the deciding factor to either open or keep open a store. There will be other things that we would take into account, such as crime or a change in demographic and footfall. It is a factor, but I am not sure that it is the determining factor.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Q Hello, Mr Gerrard. Thank you for coming today. I am a Labour and Co-operative MP, so I am pleased to hear that you think the Bill will be good for the Co-operative Group. My first question is about the limit. You say that it will probably help you overall. Perhaps this is hard for you to answer, but for retail as a group, do you think that it is set at the right level?

Secondly, you said that the Bill may have positive effects for your smaller stores, in that you may be able to employ more people, and I wonder whether you can expand on that. The Co-operative shops in Truro and Falmouth are having issues at the moment with theft and violence against shop workers, which is not good, and the BID is providing support. Would the Bill give you the leeway to employ more people, even security people?

Paul Gerrard: I will start at the beginning, and hopefully cover all the questions. This is good for the Co-op Group as a whole. There are ups and downs, because 8% of our estate would not benefit—indeed, it may cost us—but overall it is a good thing. As well as being a director of the Co-op Group, I am a board member at Co-operatives UK, which is the apex body, and this is good for the co-operative movement. That is the first point.

At present, the rate system does not incentivise improvement or growth. There is a link to your question here: for example, if we put in CCTV to keep our colleagues safe, our rates bill goes up. If we put in air conditioning, not just for food safety but to reduce the ambient temperature and so the amount of refrigeration we need, our rates bill goes up. The rate system should incentivise growth. The structure—the two rates for under £500,000 and under £51,000—does incentivise investment and growth, and for us that would mean more shops and employing more people, but I am not sure the way the reliefs work does that. As I understand it, the improvements relief has to do with the shell of the shop, so putting in CCTV or a coffee machine will result in an increase in rates. So that structure definitely incentivises growth, but there are details about whether the system as a whole does.

The Co-op has been very loud on the issue of crime, and I have been to this place a number of times to give evidence about it. We very much welcome the rates proposals. It is self-evident that the changes the Chancellor made on national insurance contributions will cost us money, but we understand the choices that were made. What got a bit lost was what the Government announced on crime: a £5 million investment in Pegasus, 13,000 officers and the stand-alone offence. That will impact us: crime costs us £120 million a year and costs the sector £3 billion a year, so if we can make any kind of dent in that, we will get the leeway that you talked about.

Seeing these things in the round is important. On crime, it is about colleagues and security—we have doubled the money we spend on security—but it is principally about the way businesses and the police work. If businesses and the police work well, we can begin to tackle crime. The work that Chief Constable Amanda Blakeman, at North Wales police, has done in the past year on behalf of all police forces has been important, and we are beginning to see a much-improved police response.

Non-Domestic Rating (Multipliers and Private Schools) Bill (Second sitting)

Martin Wrigley Excerpts

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[David Simmonds]

Q I want to ask about the impact of the multiplier and the discretion around it. One of the things that we are all well aware of is that local authorities, in particular, are very big customers of hotels. They are particularly in search of temporary accommodation, which is especially significant at this time of year. There is often a strong incentive to make sure there is a sustainable hotel sector in a given location to provide for that emergency housing need, as well as for other, wider purposes, such as supporting tourism.

Is it your view that there should be discretion on the part of the billing authority so that if they need a sustainable hotel sector in order to meet temporary emergency housing need, or to accommodate significant numbers of refugees arriving, pending onward placement elsewhere, they are able to negotiate? If those businesses go to the wall because of a lack of profit margin, the taxpayer will have to be billed significantly more because those people will have to be placed in accommodation at a higher cost elsewhere.

Kate Nicholls: May I just say that the overwhelming majority of hotels are used by visitors for leisure and business purposes? Our hotel sector is a vital component of our tourism industry and is our second-largest service export earner, in the form of tourism. That is just to put your question in context.

As I understand it, local authorities will have discretionary powers to apply additional relief to those premises, but not to change the multiplier, which is set nationally. It is important that that is retained so that there is a national multiplier. You get distortions if you have different rates. There is discretion if a local authority wants to support a particular business—if it is impacted by flooding, for example, or the authority wants to maintain the provision of a service. The local authority can apply additional discretionary relief over and above the nationally mandated relief. That obviously comes out of its own funding. That is a better way of doing it than changing the multiplier. There is a question about whether local authorities should retain an element of the business rates so they have the discretion to fund, but that is a bigger discussion and is not within the scope of the Bill.

[Martin Wrigley (Newton Abbot) (LD)]

Q Apologies for being late; I got caught in traffic behind a tractor. I thank the panel for their evidence. I am a coastal Devon MP, and within my constituency are Dawlish and Teignmouth. We have some major holiday sites in that area that I am fairly sure will fall into the upper brackets. What is your feeling on the changing situation? As I understand it, we have the 75% reduction right now, we are going to the 40% reduction, and then we are going to the multiplier system. Will it cause problems to be chopping and changing every year?

Kate Nicholls: I think the line of sight and the longer change going forward is really helpful to have set out at this Budget. The rates, we understand, will have to be set when you know what the multiplier is going forward. If you had the maximum 20p discount from the current multiplier, that is broadly equivalent to 40%. That is if the multiplier stays the same; it could actually reduce. It remains to be seen, however, what happens when we come to the end of 2025-26 towards ’26-27 and the longer term. It could look as though it is broadly the same.

Regarding the 40% now, any relief is better than nothing at this point in time—we were facing a major cliff edge. We should, however, be in no doubt that those businesses eligible for relief—given there was a cap, it is the smaller businesses—are facing a significant increase in their business rates bills from April. For the sector as a whole, it is an extra £0.5 billion of tax. If you look at the Budget measures as a whole, we are facing £3.4 billion as a sector: the cumulative impact of the reduction in relief and an increase in bills. On top of everything else, they will have a big chunk of money to pay out additionally going forward. Although 40% is better than nothing, as Steve said, it is less than 75%.

I would just say that when Wales reduced relief to 40% last year, closures in Wales were a third higher than they were in England. Scotland reduced it to zero and failures in Scotland were significantly higher in the hospitality sector as a result. It does have real-world impacts. You cannot take it away from the overall context of the tax situation we are facing as a result of the Budget coming into effect in April, and there is the combined effect of all that happening at the same time.

It should, however, smooth out after that. There is longer-term certainty and, crucially, the new multipliers will apply to each and every premises—there is no state aid threshold or cap. Previously, that has been limited, where the effects of the relief were effectively limited to businesses that had two or three sites. Multi-site businesses and those with larger premises will now benefit going forward, so the industry as a whole will be on a much more sustainable footing, longer term.

[The Chair]

Q Our third witness has arrived. Can you introduce yourself for the record?

Sacha Lord: My name is Sacha Lord. I am the night time economy adviser for Greater Manchester. Apologies for being late—it was a combination of Avanti West and farmers.

--- Later in debate ---

[Martin Wrigley]

Q Reforming business rates is very welcome. We always like that—they are not a particularly good tax—but I fear the measure is making them more complicated.

Forgive me if it is a naive question, but I do not see anywhere in the Bill, other than it starting in April 2026, any commitment to forward notice of changes or the forward ability to see changes. One presumes they come once a year in the Budget, but I am not sure it is actually mandated that that is the case. Is there a mechanism in the Bill that prevents future Governments from changing these rates more frequently, or is there anything that we can put in it that gives local authorities sufficient time to implement such things?

You say that the provisional settlement is due next week. I say once again, as a former council leader, that that is very late. You are forgiven—it is the first year, so there are extenuating circumstances—but councils need time to set their budgets, set their systems and do all that. I am looking for lead times, implementation times and guarantees of multiple years’ rates for consistency.

Jim McMahon: That is precisely why we have phased the approach. The permanent relief will come in at 40% in 2026-27, but we have included a transition period. That will continue the £110,000 cap, but it will bring in the 40% relief. The relief will be out the door immediately, but it will give time for a number of things in the system to catch up, the revaluation being a very important part of that.

This is a part of the wider issue of local funding. There are measures in the Bill that will see additional business rate funding to councils, because some of that is retained business rates in the system. We are going a long way and, without getting ahead of next week’s provisional settlement, it is a good settlement. There is £4 billion to £5 billion of new, clean money going into local government for all the issues that you as a former council leader will know are the absolute pressure points: social care, children’s services and temporary accommodation. All those issues are being addressed through the Budget and the provisional settlement. Importantly, deprivation is being brought back as a key indicator of demand in driving many of those services in local communities.

We are going a long way towards that, and we are making sure that councils are given the certainty and capacity. We accept that the settlement this year is coming down to the wire, and it would have been nice to get it sooner, but getting it right is important. Our intention is, as we move further, to go to multi-year settlements so that councils have long-term stability and that certainty is built into the business rate system.

[Michelle Welsh]

Q Can the Minister set out the scheme that the Government are proposing to ensure that schools that principally deliver education for pupils with special educational needs will not face any additional burdens?

Jim McMahon: That is entirely the point, although perhaps it did not come out in the evidence sessions. A lot of the debate can be quite polarised—whether you are for or against private schools and the rest of it. When I was on the other side of the table, I was clear that I wanted to pull away from that and say, “Well, let’s just have a conversation based on the evidence.” What the evidence says is that there has been provision to ensure that those schools that are mainly or wholly for pupils with special educational needs will not be affected by these measures at all. Why? It is because we recognise that, within the wider school ecosystem, that provision is important in many communities and that many local authorities will support it. That is being provided in the Bill.

In the end, though, I would say that we need to rebuild mainstream provision. We all have constituents at their wits’ end because, after 14 years, mainstream provision has been allowed to erode to such a point that, in some places, it barely exists. We need to rebuild it, and the investment through the autumn statement begins that rebuilding work. It will take time. There is no button to press that resets 14 years in six months, but in terms of a statement of intent, £1 billion through the local government finance settlement for SEND provision is the start of that rebuilding process.

Planning Committees: Reform

Martin Wrigley Excerpts

Monday 9th December 2024 Commons Chamber

[Matthew Pennycook]

On many sites across the country there are genuine reasons, including those of viability, why sites are not built out. It is not as simple as saying that every consented site that is not being built out is being sat on deliberately by developers, but we know that land is traded speculatively. I want to reassure my hon. Friend and constituency neighbour that, as I have made clear in answer to previous questions, there are existing powers that we can consider bringing into force, and there are measures that we took forward in the consultation on the national planning policy framework that we think will help build-out, particularly on proposals around mixed-use sites, but there is potentially more that we can do in this area and we are keeping the matter under close review.

[Martin Wrigley (Newton Abbot) (LD)]

Speaking as—until recently—the leader of a district council and a long-term member of our planning committee, I do not recognise the issues that the Minister is citing. A lot of the things he says relate to the absence of a local plan. I fully agree with that. My council has just put in place a new local plan, which is hopefully being approved right now. A better way to get more affordable housing would be to look at the way local authorities can finance the building of those houses and fix that. It would be better to allow local authorities to charge appropriate amounts to cover the costs of the planning, so that they can get the necessary planning officers, and far better to look at how many councils already do mandatory training. I hear from Liberal Democrat colleagues that they all had to do mandatory training, as I did in my council, so that is in place. I would like to see a list of how many councils do not do that. We also need to make water companies statutory consultees so that we do not hit flooding problems. Those changes will help. The problem is not in the planning process. More than 1 million applications have been allowed but not built—

[Mr Speaker]

Order. I think we could have built a whole estate by now.