Growth and Infrastructure Bill
Debate between Nick Raynsford and Robert Neill
Robert Neill (Bromley and Chislehurst) (Con)
I always appreciate forays into family history from those on the Opposition Front Benches, and I am sorry that the right hon. Member for Leeds Central (Hilary Benn) is not in his place. I imagine that democratic centralism was imbued into him at the paternal knee. His references to it were undoubtedly entertaining, although the House might appreciate a modest reality check thereafter. A reality check, it seems to me, is an old advocate, and in my experience a fair one. The weaker one’s opponent’s case, the more rhetoric they feel obliged to use. I hope that my right hon. and hon. Friends on the Front Bench will take on board the reality, which is that the Government inherited a planning system that was seriously failing. We have put in place important measures to improve things through the Localism Act 2011 and the national planning policy framework, and improvements are being seen.
Under the previous Government’s watch, the Killian Pretty review pointed out that only three out of 64 major schemes proceeded without delay and referred to the expense that that brings. This Government have been trying to put that right. A number of measures in the Bill pick up on issues that were flagged up in the consultation on the NPPF, so the suggestion that they are incompatible is nonsense. The NPPF did not require primary legislation because it was a matter of policy. The issues that were flagged up and are dealt with in the Bill do require primary legislation, so it is perfectly logical to legislate to put those measures in place.
Let me deal with clause 1, about which there has been much heat and not much light from Opposition Members. I take on board—I have no doubt the Minister will confirm this—the response by the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles) to the Communities and Local Government Committee. In reality, most planning authorities do a good job, but there are issues about the capacity of smaller local planning authorities. Some matters do not require legislation, but are gradually being dealt with by good practice within the local authority sector itself. My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) referred to the capacity of planning departments, particularly in some small rural district councils, and, increasingly, shrewd councils in such circumstances are sharing their planning departments. Those of us who have spent many years in local government hope that that will become the norm rather than the exception, and that valuable and comparatively expensive professional services will be shared across a number of planning authorities. That does not alter the position of local councillors, who are accountable to their electors as members of the planning authority, but sharing professional advice makes obvious common sense in the circumstances I mentioned.
That said, although there is good progress, and although the planning guarantee has been an important factor in raising the performance bar, a small number of local authorities consistently do not meet that requirement. As my hon. Friend the Under-Secretary of State set out, that is exactly what the Bill intends to deal with. It does not take many planning authorities to hold up important schemes. That stance is echoed by the Home Builders Federation, which does not regard the Bill as sweeping away the majority of planning authority procedures. In my experience as a Minister and shadow Minister, house builders work hard with local authorities. Good volume house builders such as Berkeley Homes and Countryside Properties generally do not end up on appeal, because they “roll the turf” first, using the requirement for pre-engagement and consultation with councillors, council officers and their communities. That works in many cases. The Home Builders Federations has stated that it welcomes
“the option of, in extremis, enabling home builders to apply to the Secretary of State where a local authority has a record of very poor performance.”
That is what clause 1 is about—it is sensible and proportionate.
Mr Raynsford
The hon. Gentleman has said twice that a small number of authorities have, in his view, an unacceptably poor standard of performance. Will he please name them?
Robert Neill
The right hon. Gentleman tries the same old trick as the shadow Secretary of State. Importantly, my right hon. Friend the Secretary of State made it clear that there will be criteria, and my hon. Friend the Under-Secretary has said there will be criteria and an objective test. I am not foolish enough to go down the route the right hon. Gentleman suggests, because I am not privy to the work that we did to develop the objective test, but I have complete confidence that the test will be a sensible one. The point he attempts to make is a bogus one, as he well knows. With every respect to him, I ought to be used to that by now.
The second point to remember about clause 1 is that, although it has been suggested there is no right of appeal, the clause shows common sense. If in a rare number of cases a decision is taken by the Secretary of State, he can hardly appeal against it—that would be nonsense. However, the option of judicial review on that decision remains. As all hon. Members know, recent experience indicates that developers and other groups have not been slow to exercise the right of judicial appeal when they think there are grounds. The safeguard that remains is therefore a significant one.
Local Government Finance Bill
Debate between Nick Raynsford and Robert Neill
Robert Neill
I call the greatest deficit in our peacetime history a failure. The benefits system that Labour created was so confusing and complex—it has some 32 different benefits in it—that it is virtually impossible for anyone to navigate it. I call that a failure. I call the fact that spending on council tax benefit doubled over the 13 years of the Labour Government a failure, because they did not achieve what should have been the objective of aiding people back into work. Some of my constituents have not known the opportunity of work for three generations. I call that a failure. The suggestion that the Labour party did anything other than fail is a bogus one. No amount of rhetoric and high-flown words can hide that reality.
We have not heard from Labour Members what they would do about the problem. They have made not a single constructive suggestion.
Robert Neill
If the right hon. Gentleman will be patient, I will give way to him in due course.
What would Labour Members do to make the saving, which is a necessary contribution to the reduction of the deficit they created? We have not heard anything about that. What would they do to reform the system to increase the incentives to get people who are unemployed into work? What would they do to ensure that, when people move into work, the loss of benefit is not too great a disincentive? Our transitional scheme seeks to deal with that, but what would they do? We have heard not a word on that.
Mr Raynsford
I am grateful to the hon. Gentleman for giving way. I listened to him for almost an hour earlier in the debate, so I hope he will not ask me again to be patient—I have been very patient already.
I put it to the hon. Gentleman that he is complaining not about rhetoric—we have heard quite a lot of his rhetoric—but about the experience of Members of Parliament who know from their constituencies that very large numbers of people will be badly hit by the measures, and will suffer hardship, deprivation and poverty as a result of them. He should be ashamed of the remarks he has made.
Robert Neill
The right hon. Gentleman is always touchy when his Government’s record is called into question, but he must learn to live with that, because his record is questionable. The simple truth is that the Labour Government’s doubling of spending on council tax benefit is not a success; it is a mark of failure. I have heard not one word on what Labour Members would do to redress the situation.
I am relaxed about whether there is a review. The provisions of the Bill require local authorities, at local level, to keep their schemes under review. I am confident that a national review would demonstrate that the measure is necessary. Not a word has been said by Labour Members about how they would make good the funding gap that would be left if nothing were done. There is nothing from them about that. It is like the old prayer that is adopted—“Lord make me virtuous, but not yet.” They say they want to reduce the deficit, but they will not tell us when or how they will do so. Failing to reduce the deficit damages the underlying economy, real and sustainable growth, and the prospect of real and sustainable jobs for the very people about whom they claim to be concerned. Locking people into a massively complicated benefits system, which they created, is not helping—[Laughter.] Labour Members’ laughter demonstrates the air of unreality that hovers over them. They will not accept their responsibility. They behave like ostriches. To paraphrase the late George Carman QC, they prefer to put their heads in the sand, thereby revealing their thinking parts.
Robert Neill
The point I take from the hon. Gentleman, whose experience I respect, is that, yes, it is not sensible to chase very small sums of money, but that is why the transitional scheme, for example, works to incentivise councils not to do precisely that. We have sensibly reflected on that.
It is important that we get to grips with this intractable issue. Amendment (a) sounds innocuous, and if my hon. Friend the Minister advises the House to accept it, I would have no difficulty in doing so, but the Labour party has not tabled it out of an interest in carrying out a significant and worthwhile review. It is simply a device for the Labour party to get off the hook for not having any constructive alternative to put forward.
Mr Raynsford
I have heard a number of speeches by the hon. Member for Bromley and Chislehurst (Robert Neill), but that was probably the worst. There was a total failure to acknowledge any problem with the proposals we are debating this afternoon and an attempt to deflect blame, rather than recognising that he has created something that will haunt him, his colleagues and all Members of Parliament, who from next April are likely to see large numbers of aggrieved constituents coming to ask why they suddenly have to pay sums of money that they do not have the means to pay. Then—this is an interesting point about the hon. Gentleman’s suggestion about fraud—when those constituents see that some councils will not pursue relatively small arrears, just because it is uneconomical to do so, they will probably think, “Well, there’s probably no need for me to pay.” If ever something were likely to undermine the culture of payment and responsibility, it is this kind of scheme, in just the same way that the poll tax undermined the culture of paying because it was seen as unfair, because it was arbitrary and because the arrears that built up took an enormous amount of time to recover.
All this is unnecessary. We can have a debate about whether council tax benefit should be localised. I have been happy to participate in that debate, and there are arguments both ways. There is an argument that council tax benefit should be part of a universal credit and benefit system. There are also arguments about localisation. We can have those debates. I would have been happy to participate in an argument about that and to try to develop either a local or national scheme that worked and that met the objectives that had been articulated. However, that is not what we are debating this afternoon. This is a ham-fisted set of proposals, cooked up by the Government in a way that shows a complete lack of joined-up thinking between Departments—the Department for Communities and Local Government is going in a completely different way from the Department for Work and Pensions—and then imposed to a chaotic timetable.
The way this House has handled the process is a cause for concern in itself. Our first debates about the Bill were in January, when the Committee stage was taken on the Floor of the House and had to be rushed through without adequate time to consider all the issues. Then the Bill was parked for three or four months. We heard nothing more about it. We wondered what was going on, until the penny dropped and one of the Clerks was wise enough to point out what was happening. The Government had suddenly realised that if they went through the parliamentary procedures, the Bill would fall with the end of the Session. They had to park it because they had not realised that the only way to get it through the current Session was not to take it through the House of Lords in the previous Session, so that they could then reintroduce it in this one.
Here we are, less than six months before the implementation of a hugely complex scheme that will affect the benefit entitlement of around 4 million people nationally, without the details agreed and with an extraordinary series of last-minute adjustments, including the transitional relief. We could not devise such a chaotic implementation programme if we tried. I am really disappointed that Ministers have not acknowledged that this is a mess. The right way forward now is to say, “We need time to get it right.” Let us give them credit: let us give them the opportunity to say that localisation is the right thing to do, but then please let us recognise that this is not the right way to do it. We have to give local authorities sufficient time to prepare, consult and carry their communities with them. We have to give them the means to do that without these arbitrary cuts, which affect individuals so harshly and unfairly, because there will be marked differences between categories of people.
Let us take the position of two households, one just over pension age and the other just under. Under the arrangements that are being introduced, if they both receive an equivalent amount of benefits, one group will be protected from any cuts because they are over pensionable age and the other will not. How will that be explained? How is there any sense of fairness whatever if those households’ circumstances are broadly the same? There will be anomalies, problems and a sense of injustice on the part of the public, and then there will be all the administrative issues in trying to collect small sums of money. It cannot make sense to proceed in this rushed way towards what is likely to be serious administrative chaos in early spring next year. The sensible measure would have been to say, “We must take stock. We must now pause and try to get this right.” Even if the Government will not accept that, they should at least confirm that there will be a review. It cannot be right to proceed with such a chaotic scheme that has gone through such a bad gestation period and that is now going to produce the kinds of problems that Members have articulated so well today, without a commitment to a thorough review.
The other place did us a service by passing the amendment that would make a commitment to such a review, and the Government should, at the very least, accept that the measure must be reviewed independently and fairly; otherwise, we shall be condemning large numbers of our citizens to an unfair and harsh series of measures that will impact on their livelihoods and that they will find impossible to understand. The Government are committing local authorities to implementing harsh and unfair measures for which they will get quite a lot of the blame. The whole thing is a terrible mistake, and I just hope that the Government will now recognise that they have a serious responsibility to the public and to local authorities to try to make the best of the very unfortunate position that they have got themselves into.
Housing
Debate between Nick Raynsford and Robert Neill(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Neill (Bromley and Chislehurst) (Con)
I start by warmly welcoming the Minister for Housing, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), to his new job and to a Department that I hope he will enjoy. It is an important job that he takes on, and I assure him that his task will be made easier by the support of an outstanding Secretary of State— I regard it is a matter of great pride to have worked with him for the past two years. So I wish my hon. Friend well. I know that he will continue the work the Government have already done.
With respect to the hon. Member for Birmingham, Erdington (Jack Dromey), who was always a courteous and affable opponent, I must say that there was more than a little collective amnesia in his speech and in the interventions from Opposition Members. I refer to collective amnesia because of the Labour party’s persistent failure over 15 or more years—throughout its time in government—to deliver on housing. I include in that its under-delivery of affordable housing. The net result was the lowest amount of house building in peacetime since the ’20s and—this is particularly troubling—a decline of about 421,000 in the amount of social rented stock available.
The Opposition showed collective amnesia in their assertion that we should place faith in local councils. I agree with that, but the Labour Government trammelled the ability of local authorities to take decisions on planning matters that were in the interest of and reflected the needs and priorities of their local communities. They also showed collective amnesia over the failure of their dirigiste, top-down, target-imposed system for delivering housing on the ground, and over the sometimes perverse impact that unduly rigid adherence to targets for affordable housing and other planning obligations had on the delivery of viable sites.
My hon. Friend the Minister knows that the Government have already started the important work of building greater flexibility into section 106 agreements. I hope that he will continue that work, because it is important to bringing forward more sites and keeping them viable.
Mr Raynsford
May I express my sadness that the hon. Gentleman is no longer on the Front Bench? I did not always agree with him in that role, but he was always a courteous and good Minister, and we miss him. However, may I also ask him to direct his claims of amnesia towards himself? He will recall from the debates on the Localism Act 2011 that, contrary to what he has said, under the last Government the output of new homes, according to the measure that his Department used to use to record the figure—and correctly so; that is, net additions to the housing stock—rose year on year until the recession, to 200,000 net additions in 2007. When does he expect the present Government to get anywhere near 200,000 net additions to the stock?
Robert Neill
I am grateful to the right hon. Gentleman for his comments. It is always a pleasure to exchange arguments with him. He must bear in mind the reduction in affordable homes of about 250,000 over that period. Whatever his intentions, the fact is that there was a consistent under-supply throughout the Labour Government, and we are now reaping the consequence.
Local Government Finance Bill
Debate between Nick Raynsford and Robert Neill
Robert Neill
Compared with formula grant that the Labour Government left behind, yes I do. That view was shared by the Lyons inquiry, which the previous Government very conveniently buried because it did not suit their purposes.
Might I now turn, Mr Deputy Speaker, specifically to the two sets of amendments and new clauses before us? I am sorry that the right hon. Member for Wentworth and Dearne (John Healey) is not in his place, because he made a thoughtful and well considered speech. I had the pleasure of shadowing him for a time and I respect his concern about the matter, so in fairness to his arguments, I will deal with the points he made.
New clause 1 relates to the operation of set-aside and the position of tax increment financing schemes—TIFs. The Government are committed to making TIFs option 2, which is what we are talking about, successful. I am glad to learn that when he was in government the right hon. Gentleman was an advocate of TIFs. He was not, unfortunately, able to persuade those further up the governmental pay scale to introduce them, but I do not doubt that he tried hard. This Government are doing what everybody asked and succeeding in introducing them. He is quite right that for TIFs to operate properly there has to be a degree of certainty, but the change he proposes is not necessary because the provisions in the Bill already enable that to happen.
The Government’s intention, as indicated in the White Paper, is that a ring fence exempts TIFs from the calculations of the levy, the set-aside and any reset, and the Bill already permits that. We also intend that, under the system, the additional uplift in rates retained be disregarded when setting tariffs and top-ups, not only in relation to the option 2 TIF scheme, but in respect of enterprise zones. That is why “proportion” is used in the regulations about which the right hon. Gentleman is concerned. The intention for TIFs is 100% ring-fencing, but in relation to enterprise zones, as hon. Members will know, the uplift in rates is retained from a starting point, so there is a proportion. The wording is used simply to cover both types of scheme and to enable both to be ring-fenced.
Mr Raynsford
Given the Minister’s response to the Chair of the Communities and Local Government Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), insisting that the new system is simpler, will he now explain how that mechanism, involving not only the set-aside and the levy but the reset and the differential arrangements in enterprise zones, will work in practice to achieve the objective, which my right hon. Friend the Member for Wentworth and Dearne (John Healey) rightly stressed, of giving investors the certainty that there will be a ring fence?
Robert Neill
I think that the right hon. Gentleman will have to make do with a potted version, given that I have only 10 minutes left and want to deal with other points as well. Suffice it to say that if he casts his eye over paragraph 37(1)(d)(iv) and (vi) of part 10 of new schedule 7B to the Local Government Finance Act 1988 —I know that he will want to do detail as we wish to do detail—he will see that the regulations permit those uplifts to be disregarded.
Those provisions have the same effect as the new clause tabled by the right hon. Member for Wentworth and Dearne would have. The Government have said that it is not our intention to reset the system until 2020, save in exceptional circumstances. I accept that for option 2 TIFs it may well be desirable to have a longer period than that, and the regulations will permit that. Enterprise zones and option 2 TIFs will be disregarded at the reset and could be disregarded for subsequent periods. It will therefore be convenient to align future resets with the revaluation period from 2015 onwards. The system will work perfectly well in practice.
In amendments 62 and 63, the right hon. Member for Wentworth and Dearne fairly recognises that central Government have, and always will have, an interest in public spending. It is unrealistic to think that central Government would not have a macro-economic view on the overall level of control over local government, and that is why we could not accept his amendment and constrain ourselves in the way that is intended. However, we have always made it clear that, over time and particularly once we have the public finances back on track, we hope to increase the proportion of business rates that are part of the rates retention scheme. We are starting at 50%, which is a considerable step forward in giving local authorities greater financial autonomy, and the provisions in the Bill allow the figure to be increased if circumstances permit. Equally, however, one has to be realistic and recognise that in an economically difficult world it would be imprudent to presuppose that the central share could be removed altogether. I do not think that any Government would envisage that. It is conceivable that in dire circumstances the share could be increased, but that is certainly not the Government’s intention; we intend to reduce it as soon as economic circumstances permit. It is therefore appropriate to maintain the existing provisions, which enable the alterations in shares between local and central Government to be considered alongside the need to maintain affordability and to protect the interests of the taxpayer and the wider economy. Whatever the proportion, be it 50% or higher, I repeat the assurance that, as is consistent with the 1988 Act, it remains the case that business rates paid to central Government through the central share will be returned to local government through other grants.
On amendment 63, we are alive to the point that the right hon. Member for Wentworth and Dearne makes, and we will take it on board when drafting final regulations. We are conscious of the potential interaction of the incentive with loss of revenue at appeals, and we have said that we will consult further on that during the summer. We have already scheduled meetings between officials and local authority officials. Against that background, I hope that the he will feel able, albeit in absentia, to withdraw his amendment.
Let me turn to new clause 6 and the related proposals from Opposition Front Benchers. I could not help but note a slightly different tone in the debate when we discussed them. I think that earlier the hon. Member for North Durham (Mr Jones) alluded to one-tune records. With respect to the hon. Member for Warrington North (Helen Jones), a one-tune record is still a one-tune record however long you play it, and I am afraid that that is what we heard from the Opposition Front Bench. It is also, I am sorry to say, a rather inaccurate one-tune record, because when one analyses the hon. Lady’s argument, one sees that it is not only a serious indictment of the system that we inherited from the Labour Government but it does not accurately portray what we are seeking to do. It is a serious indictment of the Labour Government’s record because the list of undoubted differences and inequalities between regions in the UK that she set out is in some measure, if she will forgive my saying so, the legacy of the failed, highly centralist policies of the Labour Government. It is pretty scandalous that after 13 years of regional policy and of a highly centralised local government finance system, the inequalities to which she referred exist. That is what Labour left behind.
The coalition has sought to address that legacy, even within the existing system. First, we have increased the weighting given to the needs element of the formula grant, which precisely reflects those issues, from 73% to 83%—something that no previous Government have done. Secondly, we have introduced transitional grant to deal with authorities in the greatest difficulty.
It is worth bearing in mind that need is built into the calculations in the business rate retention system. Need is part of the calculation of the baseline because the needs element is part of the formula grant, and we have indicated that we will take the 2012-13 formula grant as the baseline. The hon. Lady’s examples of the undoubted cost pressures in social services, child care and so on are, therefore, reflected in the social services element of the formula grant that we have maintained, as well as in the uplift of the needs element that we have maintained. We have placed such authorities in a better position for the starting line.
There are undoubtedly significant and sensitive services that are under pressure. Reference has been made to some of the child care cases that we know about. Those are really tough areas with real cost pressures, but under our system top-tier authorities in two-tier areas, which make up the majority of the authorities that are responsible for adult social care and children’s services, will be designated as top-up authorities. That means that they will be protected from volatility more than any other authorities in the system. They know that their top-up will be fixed for the reset period and index-linked thereafter to the retail prices index. There is particular protection in our system for authorities with the greatest need. The thrust of the Opposition proposals therefore falls at the first point.
We have said that we will share the proceeds and the risks through the 50:50 split between local and central Government. We have said that the baseline will take into account the issues that we have taken on board. We have said that baseline funding will remain fixed and that growth in budgets will be linked to local business rates growth thereafter, but with protections in place. Opposition Front Benchers have shown a schizophrenic attitude to the Bill from start to finish. They have paid lip service to a degree of localism, and they have given examples of over-centralisation that, on analysis, turn out to be the legacy of their own system. They have been in denial throughout about the need to link reform of the local government system with a realistic appraisal of the need to reduce the deficit. They have produced a set of arguments about as dysfunctional as one could find, making them the Simpson family of British politics. We have heard no credible alternatives. They have played the same record time and time again, and they do not have much credibility. I hope that the House will resist the Opposition proposals if they are pressed.
Robert Neill
I beg to move, That the Bill be now read the Third time.
This is a bit like coming out in the play-off final after the brief half-time break at Wembley on Saturday. We just need a little bit more to close the deal as far as this Bill is concerned—[Interruption.] It did not have to go to penalties.
We have had a lengthy and sometimes constructive debate during the Bill’s progress through the House, and it is worth taking stock now. The House has the opportunity to make a considerable game shift in the relationship between central and local government. We are now in a position to move away from what has been, on any independent view—as consistently endorsed by independent experts, going back to Layfield, the Lyons inquiry and the resource review—the unhealthy level of dependence of local government on central Government for income that has accrued over the years. As part of the Government’s localism agenda, we intend to hand back power to local people and the authorities that represent them. I hope that that principle will be recognised by hon. Members on both sides of the House.
I shall set out what the Bill does and its wider context as part of the coalition’s localism agenda. It is recognised that giving greater local control over expenditure and revenue raising is desirable. The principle of business rates retention is therefore supported across the House. Once we drill under some of the rhetoric, there is also a general recognition that welfare spending needs to be brought under control, and that it is right that local authorities should have control over council tax support.
The Bill incentivises local authorities to go for growth, because that is the other part of the agenda that the coalition regards as critical. We need to encourage sustainable growth and the Bill incentivises local authorities to grow their tax base by directly linking financial benefit to the decisions that they take on, for example, planning permissions that lead to more commercial floor space and economic activity, and in the design of their council tax support schemes that incentivise them to get claimants back into work, which is where we all want to see them wherever possible. It enables councils to decide how best to manage their contribution to reducing the deficit. All thoughtful commentators accept that a contribution must be made and that it is more likely to be nuanced and effectively delivered if there is local input into the design of that contribution.
Local authorities will also be given the freedom to decide how to help provide for the most vulnerable in their communities. I hope that no one seriously thinks that any party has a monopoly on concern for vulnerable people in their communities. The Government regard the vulnerable as a top priority, and that is why we have increased the weighting given to the needs element of the formula grant in our financial settlements; why we have maintained that in the baseline; why we introduced transition grants; and why we will ensure that local authorities that deal with some of those areas of greatest cost pressure in relation to adult social care and children’s care will be designated as top-up authorities and will have a degree of certainty about their funding by index-linking and protection from volatility. That is a practical commitment to helping to protect the most vulnerable in society.
The reforms are also part of our wider approach to supporting growth, which is our best hope of having the money that we need to support services for the vulnerable in a sustainable way; to get more people back into work; and to enable us to pay down the deficit, which at the moment ties the hands of central Government in seeking to deliver the services that we all want for our communities. We have made real progress on this front over the past two years. The Bill sets important incentives for business rate retention and helping people back into work through council tax support, but that is linked to other parts of the agenda. We are encouraging local authorities to build new homes, through the new homes bonus, an incentive for both commercial activity and domestic building. Homes as well as jobs are central to the incentives we are putting in place.
The local enterprise partnerships are bringing together businesses and civic leaders to provide strong local leadership and to drive growth. My right hon. Friend the Secretary of State, I and all the Ministers involved in the legislation very much hope that the Bill will not only make technical changes but bring about an attitude change in the relationship between local government and their business communities. Many of our competitors have a much closer relationship between their local authorities and the big economic drivers, but that has not always been incentivised in the UK. The Bill will enable it to happen and—I hope—help that mindset to develop. The LEPs will play a part in that by setting up the structure to enable it to happen.
We have put in place 24 enterprise zones offering discounted business rates and simplified planning to attract new local business and investment. The regional growth fund, the Growing Places fund and the Get Britain Building fund are providing a £3.3 billion boost to local economies and supporting tens of thousands of jobs, and through our welfare reforms we are seeking to bring welfare spending back under control and to target support. The 2010 spending review focused on reducing welfare costs through savings of about £7 billion a year.
Localising council tax support will help to deliver savings of £500 million across Great Britain—this in an area of activity where expenditure more than doubled under the Labour Government. It is not a sign of a healthy economy that expenditure on council tax benefit should have doubled between 1997 and 2009-10. Instead, we are providing strong incentives for local authorities to support growth and improve employment opportunities, helping to reduce poverty and reliance on support, as well as hold down costs in the long term. Speaking as someone whose grandfather clawed his way out of poverty in the east end, I, like plenty of other Government Members, have as much personal experience of such things as anyone else who has spoken.
The Bill has received extensive scrutiny. Its core principles were set out in the coalition agenda; we then proceeded with the local government resource review in early 2011; there was a consultation, along with eight detailed, technical papers to explain the thinking behind the reforms; and we have discussed the detail of the scheme through our local government finance working group and several sub-working groups. We have by no means ignored the views of local authorities; on the contrary, we have sought to engage with them, and will continue to do so, at every stage in the process. Those groups have been meeting frequently since January.
Localising council tax is a pragmatic approach to balancing the need for reform with ensuring a sensible level of deficit reduction, and builds on the welfare reform White Paper, published in autumn 2010, setting out our broad intentions. We undertook pre-consultation engagement with local authorities and other groups to help them to understand the issues, and held delivery partner engagement events last August and September, as well as a full three-month consultation from August to October that generated about 400 responses.
Against that background of consultation, nobody can say that the Government have not sought to engage with people over our reforms. Against that background of consultation and information sharing, last Thursday we published a series of statements of intent to provide clarity and assurance to the House and councils about how the reforms, including our proposal to fund localised support for council tax, will work in practice.
I shall tell the House what we have published so far and how much we have sought to set out the agenda. We have announced that business rates will be split 50:50 between central and local government and confirmed that central Government will return their share of business rates, in its entirety, to local government, and we have confirmed that the system will not be reset until 2020 at the earliest to give sufficient reward and long-term certainty while ensuring that the scheme will be fiscally sustainable, thus protecting the interests of taxpayers and the wider economy.
Our economic analysis, which has been independently verified, suggests that a 50% local share over a seven-year reset could create an additional £10 billion of gross domestic product. That figure is based on the multiplication of additional commercial floor space created through our incentive effect and, then, the additional gross GDP that stems from the economic activity in that commercial floor space.
We have set out the statements of intent indicating what will be in the secondary legislation, including—as was noted in the previous debate—the safety net threshold, to be set at between 7.5% and 10%, to protect against volatility.
On the localisation of council tax support, we have been clear that we will seek to provide as much detail as possible as early as possible. We continue to work with local authorities and service providers on the design of the scheme. [Laughter.] I know that the right hon. Member for Greenwich and Woolwich (Mr Raynsford) does not believe that any proposal that he did not make could be taken seriously, but that perhaps says rather more about him than about the Government.
Mr Raynsford
Perhaps the Minister will now tell the House how he believes that publishing everything that is required to enable early implementation as soon as possible is compatible or consistent with the current situation, where, eight months before local authorities have to finalise the scheme, they do not yet know what the legal requirements are.
Robert Neill
If the right hon. Gentleman deigns to read the statements of intent, he will find what is effectively an executive summary of the regulations, which will deal with how the default scheme operates, including for pensioners, who we have indicated should be protected. We are having regular meetings with our local government working group, which includes representatives of local authority treasurers, and we are also in regular contact with the principal software provider and other service providers. We are therefore doing exactly what the right hon. Gentleman would want us to do, although I doubt whether it will satisfy him, because it is not him doing it.
We have announced £30 million of initial funding to help meet the costs of planning and analysing draft schemes for both billing and precepting authorities, so we are supporting local authorities. The statements of intent are, in fact, very detailed. We have also provided a free online calculator to help local authorities to analyse the potential impacts of their proposed schemes.
Local Government Finance Bill
Debate between Nick Raynsford and Robert Neill(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Neill
It is certainly not our intention that that would be the case in the ordinary course of events. I think that the hon. Lady is unduly suspicious, perhaps as a result of her spending a long time in the Government Whips Office during the previous Parliament; I can understand how that could happen. It is conceivable that certain urgent circumstances might arise in which we might wish to proceed differently, but it is not our intention to set out these measures in anything other than a transparent process. I want to assure hon. Members of our good faith in that regard.
I also want to make it clear that amendments 27 and 40 are unnecessary and would narrow the options available to the Secretary of State in drafting regulations about the calculation of levy payments. We believe that it is right and proper that the measures should be set out in regulation rather than in the Bill, and I restate my assurance that we will work with local government on the content of the Bill. Any regulations will be subject to the affirmative resolution procedure in the House, and therefore subject to maximum scrutiny. At this stage, however, I do not want to limit us before we consult local government on the design of the scheme. I think that that is reasonable.
Mr Raynsford
What the Minister has just said is really unacceptable. He says that he does not want to limit the options available to the Government before they reach a decision. He knows that this Committee is here to scrutinise the Government, but he is proposing a doctrine whereby the Government should be free to do whatever they want and not be subject to parliamentary scrutiny. Will he now please answer the question we have already put to him? What are the principles that will guide the levy system that he is giving himself powers under this clause to operate? On what principles will it operate?
Robert Neill
The right hon. Gentleman really should not work himself up into a state of needless indignation, particularly in the light of his history as one of the most centralising Ministers this House has ever seen. I am not going to take any more lessons from him on this, given his record, anxious though he is to remind us of it at every opportunity.
It is our intention that the system will operate in such a way that, if areas such as that of the right hon. Member for Knowsley or the area around the Alcan plant in Northumberland should suffer significant loss of business rate revenue through the closure of a firm, for example, there would be a safety net to protect local authorities. That would come from the proceeds of a levy on disproportionate growth. That is a perfectly simple and comprehensible principle, and I think that the right hon. Member for Greenwich and Woolwich (Mr Raynsford) knows that.
Local Government Finance Bill
Debate between Nick Raynsford and Robert Neill(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Neill
I agree with my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke). It is important that we move forward. The hon. Member for Warrington North (Helen Jones) is right. The affirmative procedure will apply to the matters that come under the Bill. It is worth saying that the degree of transparency on the one hand and fairness on the other is governed by, for example, the changes to the central and local share split, which will come through shortly, and the operation of the tariffs and top-ups. Those will be included in the local government finance report, and that too will be subject to parliamentary scrutiny in the usual way each year, so it is a clear and transparent system.
Mr Raynsford
What circumstances led the Government to include subsection (7), which allows the Secretary of State to substitute a later financial year for the implementation date of the Bill, and in what circumstances might they make use of it?
Robert Neill
That sort of belt-and-braces procedure is not at all uncommon. It is our firm intention to press ahead with implementation from 2013 so that local authorities and the national economy can benefit from the Bill. As my hon. Friend the Member for Mid Dorset and North Poole said, the desirability to move to a more transparent system away from the existing model was recognised by the Lyons inquiry, which was set up by the previous Government. It recommended a move towards a localisation of the business rate, and we are taking an important step in that direction.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Schedule 1
Local retention of non-domestic rates
Oral Answers to Questions
Debate between Nick Raynsford and Robert Neill(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Neill
I am sorry that, in her otherwise serious point, the hon. Lady suggests that efficiency is nonsense; I do not think that it is. In answer to her specific point, the British Youth Council, the National Youth Agency and the National Council for Voluntary Youth Services have all condemned the disorder that we saw on the streets and they are working well with the Government. I hope that she will support the Government’s initiative for national citizen service, which is being piloted in the Bolton lads and girls club in her area. There’s youth service in action!
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
16. How many new homes received planning consent in the second quarter of 2011 in England.
Localism Bill
Debate between Nick Raynsford and Robert Neill
Robert Neill
In theory, a Mayor could seek to disregard a local authority’s views, but in practice we reckon that the new clause makes that unachievable. There are two reasons for that. First, the Mayor will have to consult the local authorities, which will have registered their objection. As with any public law decision, he has to behave in a way that is rational and reasonable within the terms of the Associated Provincial Picture Houses v. Wednesbury Corporation case. Secondly, because of the electoral arrangements in London, the local authority would be well placed to ensure that a blocking majority was created in the assembly to prevent the policy from going through. There is a theoretical possibility that the Mayor would be able to create the sort of rogue corporation that one might be concerned about, but in reality it is pretty much inconceivable.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
The Minister knows that it is not just a theoretical possibility. The Bill states very clearly that if the Mayor applies to the Secretary of State for a mayoral development corporation and has gone through the processes of consultation, if that proposal then comes before the Secretary of State, he must, under the terms of the Bill, create that mayoral development corporation. When I put these points to the Minister in earlier debates in this Chamber on Second Reading and in Committee, I said the real danger was that a Mayor who had considerable support in the assembly, as can happen following an election, would be in a strong position to railroad through his proposal against the opposition of the local borough. That remains the case, and I hope that the Minister will accept that.
Robert Neill
I am sorry, but the right hon. Gentleman has been consistently wrong on this point. If he will forgive my saying so, I know that he is offended when somebody comes up with an idea in London governance which is not his own. With respect to him, as he has considerable experience in this field, his solution to the risk, which I do accept, that a Mayor might seek to set up a rogue or an unacceptable development corporation was, in effect, to give the Secretary of State the veto—in other words, instead of saying, as the Bill does, that the Secretary of State “must” approve the proposal, that he “may” approve a policy, and that the veto would rest with a Minister. That was a highly centralising means of resolving the problem. Instead, the Government have trusted the elected representatives of London and said that the assembly, through qualified majority voting, may exercise the veto. That is much more consistent with the localist thrust of the Bill, and I would have thought it was closer to what the right hon. Gentleman, who after all introduced devolution in London, would himself wish to see.
Robert Neill
I am grateful to my hon. Friend for sharing her experience of that body, which is a matter of great concern to her and to others. We have endeavoured to learn from past experience and past failings in the way in which we construct our arrangement, and we have therefore put a democratic veto into our proposals.
Mr Raynsford
I want to correct the Minister’s assertion that I was wrong in my interpretation of the Bill. I repeat the point that was put to him by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes): if the Mayor decides to proceed with a proposal for a mayoral development corporation, the Secretary of State has to give effect to it if it is not blocked by the assembly. We have had debates about the proper mechanisms for blocking such a proposal. However, as the Minister must concede because it is in the Bill, if those mechanisms do not work, the Secretary of State has no discretion and has to give effect to the Mayor’s requirement to bring into effect such a development corporation irrespective of whether the individual borough is opposed to it. Will he now please concede that I was not wrong on that point, because that is what the Bill says?
Robert Neill
I will give the right hon. Gentleman this: he is right on textual analysis but remains wrong on policy, because his solution is a centralist one that would give the Secretary of State a veto. The whole point of what we are doing, in improving the Bill from its original state, is that we do not allow the Secretary of State to veto a decision taken by elected representatives in London; rather, we allow the assembly, which is the established body for keeping the Mayor of London in check, to exercise the veto. In policy terms, that is preferable.
I am disappointed that the Opposition object to this. As I recall only too well, in 1999 they made great play of having devolved power to London by establishing the Greater London authority. I now accept that that was the right thing to do. We are following the logic of that by enabling Londoners to take the decision as to what is the best shape and size of an important regeneration tool for London. They do that with the Mayor making the proposal and the assembly having the ability, if necessary, to veto it, and the boroughs being able to be consulted and to exercise influence through their elected members of the assembly. I am sorry that the Opposition seem to want to start a bit of a war where none need exist, because there is consensus among all parties in the assembly that it is desirable to go down this route.
Oral Answers to Questions
Debate between Nick Raynsford and Robert Neill(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
The Conservative party and its coalition partners pledged in their pre-election material to introduce a third party right of appeal, so may I congratulate the Minister and his partners on accepting the fact that that was one of the more barmy proposals among many others? Can I look forward to a series of further U-turns on other unrealistic propositions in the Localism Bill?
Robert Neill
The right hon. Gentleman is aware that both coalition parties thought that a third party right of appeal was well worth looking at, and we did so carefully—it was not lightly dismissed. The system that the previous Government left in place resulted in people feeling aggrieved. We have concluded, however, that the best means of reducing that grievance is not through the third party right of appeal, but by front-loading the system and giving residents and communities far greater control over development at the beginning, which is swifter and more cost effective.