(3 months ago)
Commons ChamberMy hon. Friend is right, and I will thank him properly on Third Reading, but may I just put on record at Committee stage my thanks to him for the work that he did chairing the Select Committee that looked into all of this? It did a thorough piece of work and I am hugely grateful to him and to colleagues who gave up so much of their time.
Yes, costs have gone up. I say this as somebody who has spent some considerable time looking at development costs in the private sector. Sometimes we can look at things in the public sector and say, “How on earth have they arrived at this particular figure?” But the National Audit Office, the Public Accounts Committee and others will keep a very clear view on that, and they are right to do so.
I say this to my hon. Friend: we want to commemorate and memorialise a horrible period in our world history, and ensure that education can be provided so that the mistakes of the past are hopefully not repeated in the future. I do not make this point to be flippant, but what cost can be put on that, given the scale and the seriousness of the task that we have in front of us?
My hon. Friend will clearly be aware that when the original proposals were put forward back in 2015-16, the design of the memorial and the education and learning centre had not been considered. Therefore the budget that was set then, before the design work was done, was clearly going to be inadequate for the type of facility that we are talking about. Given that we are in those circumstances, he is right that we will need to take a clear position on keeping to costs and keeping to the contract prices. Equally, there is the provision of private sector investment, to which my hon. Friend will no doubt refer. Does he agree with me that, in all these developments, until such time as spades go in the ground, investors are very unlikely to make contributions until they see something really happening.
In broad terms, my hon. Friend is absolutely right in the way that he sets out how these things will work. I am grateful to him for making his point in the way that he did.
Reference was made to some astronomical sum of money that has already been spent. I think I heard the figure £40 million. A total of £18 million has already been spent. I did not recognise the £40 million figure when it was uttered by, I think, my hon. Friend the Member for Worthing West, so I checked with my officials. Nobody in the Department recognises that figure. He may want to write to me with the details, but it is not a figure that we recognise.
(6 years, 4 months ago)
Commons ChamberMr Broza’s view is that he might have to close his business as a direct result of this completely unreasonable demand and, as I have said, his is one of 30,000 businesses in that position.
Obviously, the various different charges levied on Mr Broza covered a number of years going back to 2015-16 and 2016-17. The 2017-18 rates bill was even more aggressive, because it took account of an increase in rateable value and the loss of transitional relief and business rates relief. He was placed in a position in which he was suddenly presented with a bill for £8,344.59 in one go, to be paid within the year, when he had previously been paying the princely rates of about £370 a month on one property and only £50 a month on the other. He was clearly encountering a draconian position.
When Mr Broza came to see me, I was shocked that he was being placed in that dreadful position. Clearly, overall, the Government were going to gain from this Supreme Court decision. Whether it is local government or national Government, overall the taxpayer was going to gain some £3,040.95 in one hit that was completely unbudgeted for.
Worse still for Mr Broza, he had budgeted that his business rates bill for the 2017-18 tax year would be zero. Of course, he was then told that he would have to pay £5,365.07 within five months of receiving the bill. I took up this case with the Chancellor, and I am pleased to say that the Chancellor saw the right way to proceed: small businesses in such a situation that have acted in a perfectly reasonable and lawful way should not be penalised by suddenly being hit with a dreadful windfall tax.
However, we have a number of problems still to resolve. I welcome the Bill, under which businesses such as Wienerworld will be returned to their previous position. However, the current position is that the London Borough of Brent, and other councils across the country, are still levying these punitive tax rates and demanding payment. So businesses are having either to find money out of their revenue to pay local authorities—to keep paying the business rates as they are—or to borrow the money in the hope and expectation that it will be returned to them. Either way, this seems unsatisfactory, given that the Government have made it clear they are going to correct the position for those businesses.
My hon. Friend is making a powerful case on behalf of his constituent. Does he agree that quite a lot of these things illuminate the disconnect between decision making and policy making, and an understanding of how the business world, particularly the small, local business world, works? If there was better knowledge and understanding of that, some of these cases, to which he has rightly been drawing the House’s attention, would not arise.
I thank my hon. Friend for that intervention. Clearly, Government policy should always be driven in an evidence-based way and be sympathetic, particularly to small businesses, which are the lifeblood of our economy. However, we are dealing with a Supreme Court ruling here, as opposed to Government policy. I am pleased that the Government are trying to put it right, which is how this should work. The advice being given by officials from the Department is less than helpful in its current guise, because the correspondence we have had from the Department says that it cannot do anything until the law is corrected. That means that businesses are still being charged these business rates while the law is being changed. One thing the Government need to look at is finding a way of ensuring that people are not having to pay huge sums only for the valuations to be redone and for them to claim the money back, together with interest—there is also the bureaucracy to consider. Businesses just want to get on with their business, rather than sorting out the mess that has been created with their business rates.
The attitude of the London Borough of Brent to Wienerworld—I suspect this is shared by all local authorities across this country—is, “This is the decision. You are due to pay this money. You must pay it or else we will distrain against you to get that money off you.” That means small businesses in this country will go under as a result, and that is the concern. Obviously, the Government are moving as fast as they can to correct this position, but guidance needs to be given by the Department to local authorities on businesses that are suffering financial hardship as a direct result of a decision that was nothing to do with them, is not Government policy and needs to be corrected.
This is a problem in many parts of London, and it has been drawn to my attention that one area that will suffer heavily is Tower Hamlets, which has a number of businesses in respect of which the staircase tax is operational. This is one area where I have criticisms on this issue. Once the Bill becomes an Act and the law is corrected, the businesses will apply for revaluation. As I understand it, their revaluation will go back to 2010 if they so wish—it will probably go back at least to 2015. They will then get a revised bill, and probably a return of money and of interest, which is going to come from the local authority. I noted the Minister’s comment in reply to the Chair of the Select Committee that the position would be that local authorities have experienced a windfall. They have, but many local authorities are now going to have to repay that money once the law is changed back again and they have used that money. It is not money that they were not expecting, because they have had a judgment, and they have used this money in their budget. If the Government now say, “You’ve got to repay the money but we are not going to compensate you for that repayment”, that is a windfall to the Government—
I thank the Chair of the Select Committee for raising that issue. We are talking about 30,000 businesses, many of which will be concentrated in particular areas. We know that there will be a hit for some local authorities, which could be considerable. Hon. Members from across the House will not necessarily be aware of the potential hit for local authorities as a result.
My hon. Friend will know—if he does not, I will tell him—that I spent seven years doing the finance portfolio on a district council. When a local authority suffers from a flood, there is a Department-run fund they can make a bid to in order to cover the costs they have incurred due to those exceptional circumstances. Might that be an avenue for those local authorities? Might they be able to make such a bid in order to fill this black hole created in their local finances, which was not of their fault and which was unable to be predicted in their budgeting process?
Clearly, the Government and the Department have figures they can use to evaluate which local authorities are most affected in this way. It may well be that a threshold should be imposed, whereby if only a relatively small amount of money is involved a local authority could not claim it back. However, if a substantial sum is involved, as could happen in many of these cases, we should get to a position where the local authority is returned to where it should have been in terms of the expectation in its budget. My hon. Friend may know that I was in charge of the London Borough of Brent’s finances for many years, so I know the way the finances of that local authority work extremely well. The reality is that this will create a hole in Brent council’s budget, and I do not see why Brent should suffer as a result.
Let me turn to the empty homes premium. My hon. Friend the Member for North Swindon (Justin Tomlinson) asked in an intervention how we can ensure that local authorities can encourage empty homes to come back into operation, but without unfairly penalising those homeowners who are refurbishing their homes or converting them for other purposes, thereby making them temporarily empty for an extended period. We do not want those people to suffer any damage or be charged any financial premiums, but at the same time we do not want unscrupulous homeowners or landlords to keep a property empty, only to do some work when the local authority investigates, just to demonstrate that they are doing something, but still keeping the property empty for longer.
I am sure that colleagues across the House could come up with example after example of empty homes that could have been brought back into use many years ago. Some should possibly have been demolished and replaced—I have those in my constituency —but the sad reality is that we still have far too many empty homes that should be brought back into use. Those that are derelict and have not been used for literally decades are the first that we should penalise and look to bring back into operation.
Let me end by asking Ministers to look sympathetically at how we can compensate local authorities for the loss of revenue—we have suggested a means by which that could be done—how we can get guidance to local authorities so that they do not penalise small businesses because we are correcting the law in the interim, and how we can get to a position whereby some sensible decisions can be taken as quickly as possible and small businesses that face difficulties meeting their finances are given help and advice, rather than being closed down by banks and other operations that may wish to penalise them in that way. If we can do those things, this will be a good Bill.
My hon. Friend is being characteristically generous with his time. Does he agree that as all of us, as parliamentarians across the House, work with our local authorities to seek imaginative ways to address the shortage of housing, we need to be absolutely certain that those buildings that could readily be converted from retail to residential use, or in which the residential element could be extended, are not saddled with debts, burdens, judgments or whatever, which could preclude the successful delivery of that opportunity to increase the housing stock in sustainable locations in our town and city centres?
My hon. Friend draws the House’s attention to another unintended consequence of the decision to implement the staircase tax, which could preclude people who may wish to bring a retail unit into operation as a housing unit, which is something we should all welcome. That demonstrates that we have an opportunity across the House for improvement in both these areas.
Finally, I hope that we can look sympathetically at introducing the empty homes premium in a way that does not penalise those who are improving properties, but does penalise those who are deliberately keeping them empty for no good reason, so that we bring homes back into use and they are used properly, as we would all like.