Non-Domestic Rating (Preparation for Digital Services) Bill

Roberta Blackman-Woods Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Monday 13th May 2019 Commons Chamber

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

This is probably the easiest summing-up that I have experienced so far in the Chamber. I thank the right hon. Member for Wokingham (John Redwood), my hon. Friend the Member for Coventry South (Mr Cunningham) and the hon. Member for Westmorland and Lonsdale (Tim Farron)—first, for turning up and, secondly, for making incisive comments about this short Bill.

As we know, this is paving legislation to enable the Government to deliver on their commitment to link the local authority business rate system to HMRC digital tax accounts so that businesses can manage their rates bill in one place alongside other taxes. As I think should be clear from what was said by my hon. Friend the Member for Oldham West and Royton (Jim McMahon), we fully understand the Government’s wish to modernise the administration of business rates for the 21st century, and we fully understand that linking the local authority business rates system to HMRC digital accounts will make it easier, simpler and less burdensome for businesses to understand and pay their business rates. Nevertheless, as I am sure the Minister would acknowledge, there is some way to go before that aspiration can be achieved, and little of the detail of the new system is yet known.

The Bill provides HMRC with the ability to undertake the planning, consultation and testing that is needed to truly inform the design of the new service, and in their factsheet the Government say they will engage locally with local government and the business sector in developing detailed proposals and seeking views. It would therefore have been really useful today for the Government to have provided more detail on how they intend to go about this; we have simply no idea about the detail of how they will take this forward. There is a money resolution but absolutely no idea of the costs of digitising, and it would be helpful to hear something from the Minister about the costs that will be incurred.

The Minister made it clear that the measures in this Bill are to be compatible with the 100% business rate retention system the Government are aiming for, but we need to stop for a moment and explore this further, because there is a real risk under the 100% business rate system of dividing the country further between the haves and have-nots, the wealthiest areas and deprived areas, the south and the north. So can the Minister confirm that councils, particularly those affected by austerity, will not lose out under this system?

As my hon. Friend the Member for Oldham West and Royton said, since 2010 there has been a massive £16 billion-worth of cuts—a reduction of 60p in every pound for some councils—and the Centre for Cities found in January that the poorest areas have borne the brunt of council spending cuts. As a result of these cuts, councils have had to make £7 billion pounds of savings to adult social care, with less being spent on early intervention, libraries, youth services and so forth. In fact, these services have almost disappeared in some local authorities. So it might have been helpful for the Government to set out at the same time as this Bill how they see the whole of the local government finance system progressing in the future—for example, by having more information about the fair funding review and whether the Government will agree to independent scrutiny of the system and its implementation to test whether it actually is fair.

We know, too, that the current business rate system is broken, and we need firm proposals from the Government to ensure business rates are not an impediment to tackling regional inequalities in the way they are at the moment.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

The hon. Lady says we should talk about that to enable us to have a full discussion here today. This might be slightly beyond the scope of today’s debate, but perhaps she will set out from the Dispatch Box Labour’s position for business rate reform in some detail because we have time to do that, and then I will comment on that in the context of today’s debate.

[Dr Blackman-Woods]

I thank the Minister for that intervention, because perhaps I was not clear: I was not suggesting that those measures necessarily needed to be in this Bill, but they do need to be set out so that we can place the Bill within the context of the Government’s wider proposals, because the Government—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The hon. Lady has explained that very well and I understand why the Minister made his point, but of course matters that are not in this Bill are not subject to discussion this afternoon. As I said, the hon. Lady has explained the context very well and I am sure the debate will not be widened—and actually it is not difficult for me to keep this as a narrow debate.

[Dr Blackman-Woods]

Thank you, Madam Deputy Speaker. I will do my best to keep to what is in the Bill. However, the Government cannot continue to rely on a system of ever-increasing council tax bills and supplements to make up for the lack of Government funding for our essential public services such as policing, youth services, housing and social care. That is why we are interested in the wider picture, as well as the matters we are discussing today, but I will keep my points as narrow as possible.

The Local Government Information Unit has been pressing for a clear vision for the future shape of the council funding system, and it is worried that councils could continue to fail if no such vision is put forward in the near future. We also need to know something about the redistribution mechanisms that could be attached to 100% business rate retention, and it would be extremely helpful if the Minister said something about that.

My hon. Friend the Member for Oldham West and Royton set out a series of questions for the Minister to address this afternoon. We need to know how the lessons from the retention pilots will become known and when they will be rolled out and whether there will be any additional costs for ratepayers. We need to know who will be responsible for collection rates and who will underwrite funds lost through non-collection. We also need to know how the system will be appealed and challenged, and who will administer the non-payment collection and the applications for discounts and exemptions. How will local government be involved, not only in the design of the new system but in bringing in the arrangements? I hope that the Minister will address all those detailed questions this afternoon. We understand the need for the Bill, and we will not seek to divide the House on it; instead, we look forward to improving it in Committee.