Provisional Local Government Finance Settlement

Vikki Slade Excerpts

Wednesday 18th December 2024 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I refer the House to my entry in the Register of Members’ Financial Interests, as I am a Member of Bournemouth, Christchurch and Poole council. Local government was brought to its knees under the last Conservative Government, with funding slashed and responsibilities piled on its depleted and exhausted workforce. I thank the local government workforce and wish them a happy Christmas.

I and my local Liberal Democrat colleagues welcome the move to multi-year settlements—something we have long called for—and the funding announced today for homelessness prevention. I agree with the Deputy Prime Minister and the Minister that we must eliminate the use of B&Bs, especially for families at Christmas. I also welcome the announced consultation on changing the funding formula, as listening to our local leaders is absolutely crucial.

However, we remain really concerned about the removal of the rural services grant, which suggests that the Government do not understand the nature of rural communities, including the difficulties of providing services over sometimes vast areas, subsidising public transport, and identifying hidden poverty, often among older populations—that costs an awful lot.

On special educational needs, it is deeply worrying that councils—particularly those that may literally run out of money, such as Bournemouth, Christchurch and Poole council—still have no idea about what will happen to the statutory override. How are they supposed to set their budgets in February without that certainty? Can the Minister confirm that no council will be forced to join the Safety Valve scheme, for example, which would put at risk the support provided to some of the most vulnerable children?

As we go into winter, the impact on social care is of the greatest concern. Dorset council shared with me a letter sent to the Dorset Care Association in which the director of adult social care states:

“We simply will not have the resources to meet the national insurance contributions for providers.”

Indeed, the Minister told me, in response to a written question, that only direct national insurance costs would be covered. What does he say to providers and to staff in charities such as Diversability, who fear for their jobs this Christmas?

[Jim McMahon]

It is important that we have a debate on local government finance based on the numbers. I have said already that, when taking into account council tax, no council will see a reduction in its core spending power. That means that before the final settlement, and not including extended producer responsibility and live parts of the grant, the hon. Lady’s own council will see an increase of at least 5.8%. We are covering the national insurance contributions made there, and in addition we are funding an extra £880 million through the social care grant. We have heard representations through the sector.

We are not saying that all this will fix everything today—it cannot. We are less than six months into the new Government and we have 14 years to reconcile. I hope the hon. Lady does not mind, but I remind her that a number of those 14 years were under the coalition Government. What we missed then and are trying to make up for now is that if we take away community and preventative services, which we all know make a big difference—not just in cost but in outcomes—we end up paying more and more at the back end, but for worse outcomes. The cruelty is that the Liberal Democrats’ moment in government, which I accept was short, was the time to invest in reform and prevention. That time was not taken and that opportunity was missed, and 14 years later we are reconciling that and fixing the system from the ground up. We will do that.

English Devolution

Vikki Slade Excerpts

Monday 16th December 2024 Commons Chamber

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Local councils are the backbone of our communities, delivering services to every home and business. Under the last Conservative Government their funding was slashed while their responsibilities were broadened, which means that many now face a financial precipice not of their making. As they are alongside residents, they are usually the ones in the firing line when people and businesses are distressed.

I have faced local government reorganisation before, as leader of Bournemouth, Christchurch and Poole council. Five years on in Dorset, the public are not convinced that large unitaries work for them. They do not see services improve; they just see a more remote council that has to cover a much bigger area, moving money from where it was raised to be spent elsewhere, and through an organisation that cannot understand the differing needs. Scale that up even further, and I fear that more issues and individual community needs will slip through the net.

The paper talks of mutual respect and collective purpose, but after giving mayors such extended powers and the ability to levy a mayoral tax, I wonder if the Minister can confirm what specifically will be left for council leaders. For my area of Wessex, which is Thomas Hardy country, rather than being well-known local leaders, the creation of a mega mayor is more likely to be a case of “Jude the Obscure”.

I am deeply concerned about the impact on local authority staff both now and in the future, including on their ability to move between councils to develop their skills. Councils have already rationalised staffing to make ends meet and have shared services, as was said by the shadow Minister, and they will struggle to reinvent again. What plans do the Government have to ensure that local authorities will be sufficiently funded to implement such changes, and to limit the outflow of millions of pounds to consultants to make this happen?

Turning to the role of elected members, the lived experience of these community leaders is so worth while. I am deeply concerned about the loss of districts and district councillors and the move to strategically elected members. Those people are likely to be required to travel much further and give much more of their time, making it harder for people with caring responsibilities or full-time careers to serve. The paper brings forward potential sanctions for breaches of standards, which is very welcome, but it says little about how we reset the relationship with those counsellors to make sure that the time and effort they put in is properly reflected.

The White Paper fails to say anything meaningful about the ticking time bomb of social care, and its reference to the financial crisis being faced up and down the country hints at further devolution. [Interruption.] My question is, what can the Minister do to ensure that local communities do not feel like this is a top-down diktat and can make their own decisions about the future?

[Madam Deputy Speaker (Judith Cummins)]

Before I call the Minister, I remind Members that time is at a premium, and I want to be able to get everybody in.

Building Homes

Vikki Slade Excerpts

Thursday 12th December 2024 Commons Chamber

[Matthew Pennycook]

My hon. Friend will be pleased to know that we have added text to the NPPF to encourage the incorporation of features to protect threatened species, including swifts, but also bats and hedgehogs. We will consult on the NDMPs in the spring of next year.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

The town of Wimborne in my Mid Dorset and North Poole constituency has doubled in size, with new homes built on three sides right up to the Stour. These homes are pretty much out of reach for local people, and they come with no infrastructure. Shops were supposed to be included in one development, but the developer claimed it could not get them filled, so now we have another care home. Meanwhile, Aldi has made a planning application for a green-belt site to which everyone will need to drive. What can the Minister do to force developers to deliver the infrastructure they promise, so that developers cannot play the system?

[Matthew Pennycook]

There are measures in the framework that will help to achieve the objectives that we both seek. The Government are also committed to strengthening the existing system of developer contributions, so that we hold applicants to the promises they make as part of section 106 agreements, while arming councils to better negotiate with them in the first place.

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

Vikki Slade Excerpts

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Jim McMahon]

Q The first part of the question was more about how agile the system can be. Providing for secondary legislation as part of this Bill is about having that agility and being able to move to recognise any shocks in the system to ensure that, if there is a hit to the local economy, or the high street in particular, the system can move quickly enough at the right point to save it.

Gary Watson: That is one of the criticisms of the rating system. Outside of section 47, it was not flexible and could not adapt very quickly. I think it has to be a good thing to have that flexibility both in the multipliers, including the higher one and the lower one, and in how it allows you to direct the particular relief. It is good for the rating system, including those who pay the rates and local government.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Q I would like to touch on that further. The Bill will give the Treasury the power to apply those additional multipliers. Do you feel that should be a local decision? You have hit the nail on the head; the way business rates work can be impacted by a local situation, such as a retailer going out of business or there being very high rents. Do you think that the Bill gives local areas the ability to think about how they might need to apply different multipliers? Would you like to see more regional or local implications, rather than it all coming through the Treasury?

Gary Watson: I go back a long time in business rates; I was working in rating up until 1990 when it was very much the local authority that set the rate and collected the rate. That was one of the reasons why they went to a national non-domestic rate in 1990. I think the councils have a key role to play. That is why I am keen for the relief system to give local authorities an element of discretion so that they can direct reliefs to certain types of rate plan. That goes for not just the high street but the wider picture.

In terms of ensuring an element of consistency, it was interesting that when the reliefs were coming in during the pandemic, there were a lot of local authorities turning around and saying, “Can’t you just tell us what it is?” Then central Government were saying, “You wanted the discretions and now you want it controlled. You can’t have it both ways,” so I think it is a balance. It raises so much money: all the strengths of a property tax are there for both central Government and local government, and for the ratepayer as well. It is about getting that balance.

Controlling the central rate is right, but making sure that councils have an element of discretion, whether through variance in the multiplier or a particular relief, is something to be considered. But again you have to be careful, because local government is different in lots of different areas. There are different challenges in lots of local authorities, and you are sometimes trying to have a rating system that fits every part of the country. That is why you need that flexibility there.

[Harriet Cross (Gordon and Buchan) (Con)]

Q Good morning, Mr Watson. What impact do you see the changes to the multipliers having on the number of appeals that are coming through the business rate system? Do you think the appeals are more or less likely than at the moment to have a grounding or a basis? Will they clog up the system? What is your position on that?

Gary Watson: I do not see that particularly. The question of appeals is interesting. To pick up on one point on appeals, the thing that we are going to find, if we focus on retail and hospitality, is that at the moment if someone does not receive one of those reliefs from a local authority, the only way they can challenge it is by way of judicial review, which is a very high barrier to meet. What we are finding is that some councils will interpret it and give it, and some councils will interpret it and not give it.

What you will find once the Bill goes through is that those challenges will move from judicial review into the magistrates court. If a council chooses not to give a relief, the challenge would be against a liability order application. I think what you will find is that you will get more cases being challenged at a liability order hearing, because however you draft a provision that says, “These people will definitely get it, these people won’t, and these people are subject to whatever,” those challenges will move into a magistrates court.

You can argue about whether that is the right place to have those challenges. The institute’s view for a long time has been that having all disputes on business rate, whether it be liability, occupation or mandatory—these reliefs—in the magistrates court is probably not the best place for them. The best place for those is probably in the valuation tribunal where the valuation disputes for business rate goes. All the council tax disputes go to the tribunal, but business rate disputes do not.

The revaluation will obviously be the trigger for how many appeals come in, and my valuers have given me a heads up on the areas that will see big increases at the next revaluation. But when you are looking at appeals and you focus on the retail, hospitality and leisure, those challenges will come into the magistrates court. The weakness of that is also that the only way you can challenge it is to refuse to pay the rate to get a summons to go into court and argue to a magistrate. Case law is good because it builds the rating system, but I feel that that might be something to keep an eye on going forward.

I think that there will be a lot more appeals against the billing authority’s decision, whereas at the moment they are not challenged through judicial review, because it is a very high barrier to change. The ratepayer could turn around to say, “Well, that council is giving it to me, but that one is not—can you really go to judicial review?” and the challenge would probably be sensible. In my understanding, we have not seen any since those discretions came in.

--- Later in debate ---

[Vikki Slade]

Q Can I ask you about certainty? The Bill providers the power to introduce multipliers for a given year. With so many stores, you must plan a long time ahead. Do you think that, if we allow changes to be made so frequently, that will be a problem for you?

Paul Gerrard: Your underlying point that businesses like certainty is well made, because we do; we try to plan ahead. If I think back 18 months to the energy crisis, that was unforeseen and caused a real problem. You are absolutely right that certainty is important. Also, though, there is flexibility depending on the economic circumstances at the time—the pandemic allowed a different flexibility—so I think there is a balance there.

What is important is that, in deciding that, there is real transparency and openness. I spent 20 years in government, much of it in the Treasury and Her Majesty’s Revenue and Customs, as it was then. I would say of my time there that perhaps we were not always that open and transparent with business. The more openness there is, and the more that officials can advise Ministers based on what is happening in the business community, the better. I am relatively comfortable about the structure; I think it is the ways of working that are important.

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Q Thank you, Mr Gerrard, for coming to give evidence. I want to put on the record my support for the premise of supporting community shops and stores and providing somewhere for people to go to do their shopping, but you mentioned that the provisions in the Bill will make distribution more expensive. Should we not be more concerned that home delivery, which we know is very important to vulnerable customers, will be more expensive as a result of the Bill?

Paul Gerrard: I think I am right in saying that the Co-op has the biggest quick-commerce business in the country. People order through aggregators and their orders are delivered from our stores; that is something that we have within our business model. Clearly, there will be costs going on to some of the depots and distribution centres and, to keep this revenue neutral, that will bring extra costs. I think that is the price of revenue neutrality. In the round, the impact on small stores and local shops will outweigh the potential risk around home delivery. As I said, we have a home delivery business; I think our quick-commerce business is the biggest in the country for small, quick deliveries. You are right to flag the risk, but in balance we would say that it is a positive thing that we are supporting brick and mortar shops as much as we can.

--- Later in debate ---

[Jim McMahon]

Q On the point that you made about the potential to improve the system more generally, clearly we want this to be a measure that supports the fabric of community. In the end, these are retail businesses, but they are often the places that bind communities together. That is very much the way that we as a Government perceive them, and perceive the value of our high streets and our precincts in our villages and towns. From your perspective, what measures could be taken to really target the measure to ensure the support is given where it is needed?

Edward Woodall: On the multipliers, we will have to see if the rate of the multipliers is going to have an impact overall. I gave some examples of where you set the multipliers determining how much businesses can invest. What is described in the Bill is well targeted for retail, hospitality and leisure, to support the areas my members trade in and the types of businesses that the communities want in those locations. If we look at our polling about the most desired services on local parades, convenience stores, post offices and pharmacies come top, and all of those trade out of similar premises. Hopefully, it will help our sector, but it will also help the other businesses that trade in those locations as well to continue to deliver those services too.

[Vikki Slade]

Q Thank you very much for coming in to give evidence. On the timing, we know that retail, hospitality and leisure relief will reduce to 40% in April, but these measures will not come in until the April after that. Do you have any concerns about the impact on convenience stores during that year, before we know what will be happening the following year?

Edward Woodall: If you talk to convenience retailers now about business rates, what is in the front of their minds is the reduction in retail, hospitality and leisure relief, which has gone down from 75% to 40% from April next year. That is a big hit, among a cumulative burden of other measures that were announced in the Budget. That is concerning for them. They talk to us a lot about that, as part of the overall Budget package being challenging—and it was a big challenge, with £660 million costs for the sector.

That said, we knew that the retail, hospitality and leisure relief was introduced as a temporary measure during the covid pandemic, so we welcome the fact that it has not disappeared completely but has been tapered. We also welcome the principle that is set out in the Bill that we are giving a bit more permanency to support for retail, hospitality and leisure businesses on the high street in the future. There has been a cycle of changes in the policy over time, so hopefully this will give us a bit more of a stable footing to understand that. That does not just help us; it helps the other businesses from the retail industry that are thinking about investing in those locations too, but also those from hospitality and leisure.

[Patrick Spencer]

Q Thank you very much, Mr Woodall. I was struck by what you said about rural convenience stores and the importance of supporting them, and I could not agree with you more. I represent a rural constituency and in the next-door village there is a shop that has been there for years. I am terrified every year that it will go under, yet it is very resilient. Do you think this Bill should make provision for convenience stores that stand alone within rural areas and villages, where they are the only shop left that sells milk, eggs and newspapers? Do you think it is not just about small and microbusinesses, but those that are the only ones left? Do you think there should be a provision in the Bill for them?

Edward Woodall: I certainly think there should be provision of support for rural businesses, particularly those that are the last ones serving a community. They deliver essential services to those communities, and there is a cost to that community if they have to travel elsewhere. Whether it is possible to do that through the legislation is an interesting question. This was picked up in some of the previous evidence that you heard this morning, but there are measures within local authorities’ existing powers to issue discretionary relief to support those locations. That was previously called rural rate relief but it has been taken over by small business rate relief.

The challenge is whether local authorities have the funding to administer that relief. I think it is quite challenging to do that in the Bill, because you get into a space where you start adding more complexity by identifying regions or locations in national legislation. Actually, what we often see is that there are more differences within a region than there are between regions. I agree with the principle of what you are saying, but perhaps the existing powers of local authorities to do that are better, but they probably need support and trust from the Government to allow them to administer it well.

--- Later in debate ---

[Jim McMahon]

That would be very helpful.

[Vikki Slade]

Q You talked a lot about the retail properties over £500,000, but there is also a cliff edge at £51,000. The Fantastic Things Emporium in Bournemouth is a brilliant treasure trove of lots of microbusinesses that would otherwise not have the ability to be on the high street. Is £51,000 the right level? Should the level exist at all?

Helen Dickinson: I will start and then hand over. Tom highlighted earlier that whenever you have a threshold of some description, there will be a cliff edge risk. I know it is a goal of the current Government, as it was of the previous Government, to ensure that small and microbusinesses get the support they need to be able to grow. There is recognition right across retail that there is a case for a higher discount for really small businesses as they begin to grow and a next-level discount, for want of a better description, for those above that. The threshold risk is there, but the improvements proposed in the discussion paper, which are not necessarily in the Bill, about transparency from the Valuation Office Agency on data and the processes it goes through should at least give a greater ability to get through the appeals process and give people more clarity and certainty. That will hopefully avoid at least some of the consequences of those thresholds.

That is a long-winded way of saying that there is recognition that there needs to be a greater discount for really small and microbusinesses. You have to set a level at some point. Is £51,000 exactly the right figure? Whether it is £51,000 or £500,000, it is important that it indexes with inflation, because otherwise it will get eroded over time. Whether that needs to be in the scope of the Bill is part of the way to address your question. I do not know if that helps. Tom, do you want to add anything?

Tom Ironside: On that final point, in 2001 there was around £40 billion of rateable value on the list. Now we have about £70 billion of rateable value on the list. It is inevitable that if you do not have some sort of uprating mechanism—we have identified the £500,000 threshold, but I suspect that you could make an equal case for the £51,000 one—you erode the benefit and purpose of what is being set out. We feel quite strongly on that front.

[The Chair]

We have one minute left and two Members have indicated that they want to speak.

--- Later in debate ---

[Jim McMahon]

Q I accept that up to a point, but the temporary relief that the previous Government brought in to cover the impact of covid on the high street and retail, hospitality and leisure was introduced at a time when the sector was decimated and the country and the economy changed beyond recognition, in a way that none of us had experienced. That is not the world today, but the operating environment is still very difficult. Have you made an assessment of the impact of the previous temporary relief coming to an end in the form of a cliff edge? It was just going to stop and there was no provision for it to continue in any form in the Budget or the overall forecast. What impact would that have had on the high street?

Stuart Adam: The short answer is that we have not, and I am not aware of any good empirical study of what that was likely to do. It is slightly interesting and strange the way it evolved, because of course it was introduced as a relief in desperate times during covid. But as covid was coming to an end, it was made more generous rather than less. It moved up from 50% to 75%, if I remember rightly, at that point. Again, I am absolutely not disputing in any way that it did provide and does provide much needed respite, particularly at times of crisis, but as a long-term permanent thing I do not think the effects are the same.

One thing I completely welcome is that whatever you want to do with this—setting it up as a clear, long-term part of the system rather than having year-to-year uncertainty as to what the number will be and whether it will continue and so on—and whatever decision you make, making it a permanent part of the system is a very good thing.

[Vikki Slade]

Q In Northern Ireland, there is a single regional rate and then a local levy. Do you have views about whether there should be any local influence in terms of these determinants reflecting higher rents, particularly in the south-east or south-west, that put lots of businesses above the £51,000 threshold?

Stuart Adam: There are a number of questions. One is how far the rates should be set locally versus centrally. Obviously there was a history there of them being centralised in 1990. There is a question as to how much localism you want. If you are going to have local taxes, property taxes are a pretty good choice—housing more so than business property taxes. But if you wanted to localise more taxes, business rates would not be a bad choice. There might be things you can do along the lines that we have seen already about, for example, having a ballot of local businesses as a requirement and that kind of thing. There is a case for whether it should be local or central—I do not have a strong view either way.

There is a question as to how far the revenues should be redistributed across the country and whether areas that get more business rates revenue should have more funding as a result. That, again, comes into a broader question about the local government finance system. It is not obvious that just happening to have more high value businesses in an area is a good reason for that area to get more revenue. I think there is a better argument for things such as business rates retention, where you want to give local authorities some incentives, some reward, for having more businesses, encouraging them and generating local economic growth and so on.

There is then a question about whether, even if it is set centrally, the rates and thresholds of business rates should be different across the country. It is not obvious to me that there is a good argument for that, but it is not obvious to me that there is a good argument for it being different across different sizes of business or sectors, either. I would not rule out that you could make a case for it. In those other cases in terms of smaller businesses and retail, hospitality and leisure, you can make a case for it. I am not saying that you should never have any variation, but I would want to hear that argument made clearly. In terms of variation across areas, I do not think I have heard that argument made.

[Jayne Kirkham]

Q I am from Cornwall, where we have full business rates retention, so that puts a slightly different spin on it. Given that that varies across the country, maybe you could mention that. You talked about high street rents going up or down. I come from a place where there are lots of seaside towns and limited space by the water. A lot of our properties are owned by faceless corporations or insurance funds, so the rents are not remotely responsive. They have stayed high for a long time because they are seen as an asset on a balance sheet. We have struggled very much with that. For some places—maybe you would disagree—the business rates are even more important because the rents either take a very long time to have an impact or we are just left with empty properties for a very long time. Would you agree?

Stuart Adam: I think I would disagree. Actually, it is possibly even more true in the cases where properties are owned by big, faceless corporations, because clearly they will want to set the highest rent they can get away with, but the amount of rent they can get away with will depend on the demand for that property, and the demand for the property depends on the level of business rates and rent attached to it.

You would expect rents to adjust in the long run. How long “the long run” is is an interesting question. There is some evidence that it starts to happen in a relatively short period—something like three or four years—but the evidence on that is not great. The rent adjustment probably happens more quickly than it would have 20 or 30 years ago, because commercial rent contracts have become shorter and there is more use of things like commercial voluntary arrangements, which allow rents to adjust more quickly. It can take a fair number of years before rents are renegotiated, contracts come to an end and so on, but I would still very much expect it to happen.

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

Vikki Slade Excerpts

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Jim McMahon]

Q It is important to say, though, that the 1 million vacancies I referred to are in existing schools. So the teachers are in the classrooms, and the buildings are there. These are vacancies in the existing school system.

Simon Nathan: I appreciate that. The point I was making was that some of the money that would be raised to support greater investment in state education will get eaten up by pupils moving over.

In terms of hotspots, it would depend very much on the part of the country—obviously, our schools are predominantly in the south and in certain parts of London, in particular. We fully appreciate that, on a macro level, there is a certain level of vacancy, but our concern is that there will be particular parts of the country where there might be more hotspots.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Q I am conscious of trying to keep to the Bill, because I am worried that a lot of your comments are really about the state of the independent sector more widely. As has been suggested, the Bill will make a relatively minor change, although I understand that it comes on the back of other things. What thought has been given to how the independent sector might mitigate what is effectively a change to a property tax by rationalising the amount of property it uses? An awful lot of independent schools have an awful lot of land and property, and they could perhaps mitigate the impact by doing that. Has any thought been given to rethinking how you use property?

Barnaby Lenon: Before I ask David to answer that, can I just say that there are not a lot of independent schools that have a lot of property. There are a small number that definitely have a lot of property, but if you had visited as many independent schools as I have, you would see that a lot of them are in converted houses, with no other property. Many, many of our schools have far less property than a normal state primary school would have. Nevertheless, your point is taken.

[Vikki Slade]

Q You could probably build a small village on the land owned by each of the independent schools in my constituency. So while I accept that there are schools like the ones you described, there are also schools that might be able to merge to fix this problem.

David Woodgate: It is not typical for a school to carry a lot of excess land, although we have seen prep schools moving on to the sites of senior schools, and disposing of the prep. That is an obvious thing to do, and they then put that money into bursary funding or wherever. We are seeing mergers of schools, which might result in one site being surplus to requirements, and then that money can again be recycled into providing the educational product.

I do not think that schools are blind to the fact that they have some levers that they can pull, but they can only sell off the family silver once. It is not necessarily a longer-term solution. It is about what they do with that money and how they use it. Barnaby is absolutely right: I have been to four prep schools in the last two weeks, and they are just converted Victorian villas with no extra space. There is not even anywhere to put a minibus—it is that tight.

[The Chair]

We have until 3.40 pm, and I have seen six Members indicate they have questions.

--- Later in debate ---

[Jim McMahon]

Q It was more about a recognition from industry that, for the institutional investors in property, the Government are going a long way to bake a permanent relief into the system, rather than year-on-year reliefs. That relief can help to fill those units that investors maybe really struggle to let because, whatever the rent levels, they are just not commercially viable for the end user, and these measures will help in that end.

Rachel Kelly: I think they will go some way to helping. If the ultimate goal of the Bill is to support high streets, there are probably areas where we would suggest that it is not as targeted as it could be. If you think of a really thriving high street in your area, retail and leisure will form a large part of it. However, a thriving high street also has offices and other businesses that provide footfall to those retail units. It has big anchor stores that might not benefit from this smaller relief but provide really important footfall for the other retail and leisure occupiers. It has car parks that are really vital to bring in customer bases for those high streets. It often has lots of asset classes, such as GP surgeries, libraries and some forms of education—you get my point. A thriving high street has a huge mix of different businesses all supporting each other. It is a really important—and maybe fragile—ecosystem. Yes, this measure will support some of those units, such as the smaller retail and leisure ones, but I am not sure whether that is enough to support the whole high street ecosystem.

[Vikki Slade]

Q I completely accept the point that a lot of the talk around the Bill is about high streets, because of the particular references to retail, hospitality and leisure. But it is a Bill that affects non-domestic rates and multipliers for businesses. Do you have any thoughts or comments on the fact that there is no reference to manufacturing and how we support manufacturing businesses? Do you think that should be included within the Bill?

Rachel Kelly: Whether that can be included in the Bill, I do not know. But yes, the issue of an uncompetitive property tax system is relevant for lots of industries, and manufacturing is the one that you raised. Ultimately, that comes back to the higher rate of tax across the board. If you are alluding to the higher tax rate for the rateable values above £500,000—yes, it strikes me as an arbitrary threshold, and it will capture lots of different businesses and sectors. Maybe there will be some adverse consequences of that, which might be counter to the policy aims, but I am not sure.

It is a tricky one to balance. Ultimately, if this relief for retail, hospitality and leisure will be funded within the business rate system, our instinct is that it would be better to fund that across as broad a spectrum of the economy as possible, rather than narrow down that tax base even further. For context, the proportion of properties with a rateable value above £500,000 is 1% of commercial property in the UK. If we condense that down even further, it is a very narrow tax base to fund these other changes, so I am not sure that is sustainable. I am not sure we can address the issue of competitiveness for other sectors without addressing the elephant in the room, which is the huge tax rate that we have for everyone else—55%, or 50% for smaller businesses. They are very high tax rates compared with any other business tax.

[Ms Billington]

Q I am grateful for your evidence, and I am interested to hear your puzzlement about the reality of empty shops. I represent East Thanet, where there are three towns—Margate, Broadstairs and Ramsgate —all of which suffer from empty shops to a greater or lesser extent. Ramsgate has a 24% vacancy rate. Can you explain to me how that might be, and what impact the legislation might have on tackling some of the challenges around large property owners resisting taking on tenants?

Rachel Kelly: The reason why we have a huge amount of vacancy on our high streets must be multifaceted. Obviously, we have gone through a huge transition in our retail sector over the last 10 or 15 years, which has had an impact on some of our high streets. The supply of property is relatively fixed, so once there is an oversupply it is difficult to rectify in the short term. Our planning system will play a big role in ensuring that we can reuse those assets for the most appropriate purpose in our current economy.

As far as I am aware, the causational relationship is between vacancy and the disposable income of the residents in a local area. Where there is high disposable income there tends to be lower vacancy; where there is relatively low disposable income there tends to be quite high vacancy. To the point about whether there are, at the margins, people who keep their shops empty, that is not something that a rational investor would do.

--- Later in debate ---

[Vikki Slade]

Q We heard earlier that 130,000 children with special educational needs are in independent schools, of whom 100,000 do not have an EHCP. If you assume that the majority of those are not in specialist EHCP/SEND schools, the potential is for 100,000 children possibly to make that switch. Do you have any thoughts on how many of those schools might be pushed towards specialising in special educational needs? Do you have any idea of whether we might see a shift in what private schools choose to specialise in going forward?

Professor Green: That is an interesting thought. I do not have a specialist estimate to give you on that. It is a conceivable response. I am not sure that it is a necessarily a bad response if it does happen that way. But, again, I repeat: I do not think there will be a large number in those circumstances.

Inevitably, whenever you make a change like this, there is always someone at the margin who is just kind of tipped over the edge, saying, “I really can’t afford this any more.” I happen to know somebody in that particular position in my area. I am fairly sure that a large number of those people will have to deal with the situation; there may be a 1% or 2% rise in the prices, which might not otherwise have happened, but, of course, prices rise all the time. Prices have gone up many times since the turn of the century, and they continue to go up, so it would be very hard to distinguish the rises associated with this measure from the regular fee rises that go on anyway.

[Adam Thompson (Erewash) (Lab)]

Q Thank you, Professor Green, for joining us this afternoon. You have noted a couple of times already that your assessment is that the impact of this measure will probably be negligible. I was wondering how you might compare that with the cash-terms doubling of private school fees over the last 20 years, from the perspective of families.

Professor Green: Well, I think that is part of the indirect evidence of the fact that there will not be a great deal of impact, because, broadly speaking, the same proportion of the population is attending private schools as 10, 20 or 30 years ago, so it is one of those constants. That is slightly down, but, to be honest, it depends on the fortunes of the top echelons of our income and wealth spectrum—how much they can afford and choose to send their children to private schools. That is the nature of the market.

--- Later in debate ---

[David Simmonds]

Q Thank you very much indeed, Dr Huq. I know that we are going to have ample opportunity to develop the debate about the relevant clause in the Bill tomorrow, but a lot of the amendments are about whether impact assessments will be carried out or not, and how that would inform our decision making. Could you set out the Department’s approach in general to the use of impact assessments in making determinations—for example, setting the particular level of multipliers—either that the Treasury would consider as an envelope, or that you would expect to see implemented by billing authorities?

Jim McMahon: Thank you. It is important to say that we are determined to create a fairer business rate system that protects the high streets, supports investment and is fit for the 21st century. To deliver that pledge we have outlined these measures, which have been well rehearsed in evidence, and we will explore them further in Committee tomorrow. We have been clear in targeting the interventions, because it is about delivering a manifesto commitment to ensure that we better reflect the changing nature of the high street. In every community, you will hear about local businesses at their wits’ end and feeling as though the Government have not been present, with the online world growing at a rate of knots and the high street getting more and more difficult. We all see that across the board.

There was particular pressure on retail, hospitality and leisure during the covid period, which saw many businesses go to the wall, but that reflects the fact that the support on offer managed to get a number of them through a very difficult period. But they knew that that 75% relief was coming to an end. It was a cliff edge. There was no accounting or provision for it going forward. Everybody in the room must have heard businesses say, “We do not know what is coming and we are nervous about the future.” These measures are about providing that permanent relief—the 40% relief will make a huge difference to high streets, town centres and communities across the country—but also about giving certainty so that businesses can plan ahead.

We are confident that these are the measures that businesses have been asking for, but they have to be self-financing. If we have learned anything, it is that there is no magic money tree. If we give in one part of the economy, it has to come from another part, so where is it best to take from to provide that rebalancing? The fairest way is to target those higher-value properties—1% of the system. We need them to give a bit more, because the high streets and communities need that back support. By and large, that will be warehousing, distribution and the large sheds on the side of motorways, and quite rightly, too, because they are doing well. Their turnover is high, and it can be used to support local businesses on the high street and in town centres.

Every piece of evidence we have heard today, whether from the pub industry, retail or even property investors, has said that the clarity and certainty of investment on business rates is important and welcome. The reach that it has across a range of different sectors will definitely have an impact. Also, the fairness in the system—those with the broadest shoulders, with the highest-value properties over £500,000—is absolutely what is needed. We are very clear about the impact.

Clearly, this is only one part of the process. The actual rates will come later and they will be subject to a separate process, but we are clear that this is the right thing to do and it has been noted in the evidence we have heard today.

[Vikki Slade]

Q Can I ask about occupation? I am thinking about the hon. Member for East Thanet, and I also represent a coastal community. We had a slightly surprised response when we heard that everything will right itself, when we have whole high streets sitting empty. My understanding is that if you have a higher rate for empty properties, it is likely to force people to take a tenant. Do you think the Bill goes far enough on that, or are there more levers you need to pull to make those empty properties work? I know we already have the rental auction and that that is not in scope, but does the Bill go far enough or can the multipliers be levered even more?

Jim McMahon: It will. We need to stay in scope of the Bill, but the Bill does not sit in isolation. This is a wider package of reform and intervention, reflecting the fact that businesses do not operate in isolation; they are part of an ecosystem in many places. Think about the impact of, say, an anchor department store closing, or a bank branch, a post office or an office block. What that does to the footfall in a place has a huge impact, so we need to take a range of measures. We absolutely understand the importance of town centres and high streets not just to the economy but for identity, pride and confidence in the future. I will be careful not to stray too far out of scope here, but communities often feel they lack the power to take control of their high streets. There are cases where a unit has been left vacant and there is a local business that would take it on, but the landlord is not interested, either because they are absent and missing in action, or because they are an investor where the bulk value is more important than the actual rent that can be collected.

That is why things such as the community right to buy, which gives the community the right to have assets, and a community asset register, which gives protection to assets of community value, are important. It is also important to provide more time for communities to self-organise and maybe take over some of these assets. This is an important step that will go some way to achieving that, but in isolation, it would not be enough, which is why the other steps we are taking will make a difference. Where this will make an absolute difference is that once we have dealt with the empty property, the businesses that occupy it onwards can be that bit more viable, because the business rates will be lessened on their operating costs.

[Adam Thompson]

Q Thank you, Minister, for your time. We have had really interesting sessions today. I represent two towns, as I said earlier, and I am really pleased to represent one where a lot of work has been put in by the community to rejuvenate the town centre. By working together, the occupancy rate has increased, and we have a huge focus on independent businesses, which is really positive.

I want to focus on pubs, because we had a little less focus on that than other areas earlier. I know that like many other colleagues, I would not be here, sitting in this room, if it were not for the emotional and social support of pubs during the election campaign—in my case, the White Lion and the Dew Drop Inn. What opportunities do you feel will be opened up for the pub sector by the Bill?

Jim McMahon: We heard earlier about community pubs. A lot is said about the last pub in a village, and they are lifelines. If everything else is gone—the shop is closed and maybe the post office too—then having a convenient space where the community can come together is important for a number of reasons, not just for social isolation, but for living a decent, fulfilled life where those relationships and experiences matter.

Quite a lot less is said about the last pub on the estate. In the same way that many rural villages feel isolated and disconnected, lots of estates feel completely disconnected from a lot else, such as the convenience stores and things that used to be there, including the local church, the church hall or the scout hall. We need to do far more to make sure that the convenience store and the local pub can survive and thrive. We heard earlier that, given where the thresholds are being set, those are exactly the types of places that will be the biggest beneficiaries of some of the measures in the Bill.

The high street, which is obviously a bit more expensive to operate on because of the nature of rateable values, will also be a beneficiary of the Bill. It is so targeted on retail, hospitality and leisure that those types of uses, which are the backbone of high streets and town centres, will benefit. The same is true for pubs: community pubs and village pubs, but also pubs on the high streets and in town centres, will be in scope to benefit from the Bill.

We heard earlier about the mounting pressure of food costs and energy costs. The cost of carbon dioxide supply for carbonated drinks is extremely high, as is the cost of staffing. The scope of this Bill is narrow and targeted, so there are limitations to what it can do. It cannot fix absolutely everything in the system, but it can play its part. I think we heard today in the evidence sessions that it is absolutely welcomed as part of the answer.

Oral Answers to Questions

Vikki Slade Excerpts

Monday 2nd December 2024 Commons Chamber

[Mr Speaker]

We now come to the Liberal Democrat spokesperson.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I hope that you will endure us, Mr Speaker. Dorset council, which covers half my constituency, has agreed to work with Somerset and Wiltshire—all unitary councils—on a devolution arrangement, but residents are already raising concerns that top-down reorganisation will take decisions further away from their homes and communities. They are worried about what a mayoral combined authority might do to them. What assurances can the Minister give that the town and parish councils, on which residents rely so heavily, will not be expected to keep unitary councils afloat, and that my residents will not see back-door council tax rises as a result of the changes?

[Jim McMahon]

Central Government have said to local government that we want to reset the relationship and work as partners in power, and it is not unreasonable to expect that councils will do the same at a local level and will work together in partnership. We see that across the country: local councils work in partnership with their parish and town councils in the interests of their community. Whether or not reorganisation takes place, we expect that to continue.

--- Later in debate ---

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

My constituent, Dom, purchased a high-rise building that, it now transpires, does not meet building regulations on combustible materials used in the early 2000s. His building is being remediated, but the materials are being allowed to remain, locking in the risk for the long term and sending insurance premiums sky high. Why are the Government not investigating historic non-compliance? What is being done to protect homeowners from unfair losses and sky-high insurance premiums?

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

We are clear that dangerous buildings need to be remediated. That is why the best thing that any building owner can do is get into a scheme today to unlock the funding and meet those duties they have as building owners. When they do that and when they are approved for the grant, they would have an inspection at that point, so I am surprised to hear that dangerous defects would be locked in, as the hon. Lady says, but I am interested in having a conversation with her to understand that further.

Oral Answers to Questions

Vikki Slade Excerpts

Monday 28th October 2024 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Rough sleeping is the most visible end of the homelessness crisis, but it is also brutal—the average age of death for rough sleepers in London is just 44. The rough sleeping initiative is literally saving lives—in Bournemouth, Christchurch and Poole, 102 people are kept alive every year through that programme—but it is due to end in March 2025. Removing it has been described by local teams as nothing short of catastrophic, so what assessment has taken place of the impact of that initiative, and what assurance can the Secretary of State give local authorities about the maintenance of the scheme so that they can plan for the long term?

[Jim McMahon]

Again, I ask hon. Members to wait for the spending review on Wednesday, and for the provisional settlement in December. We are under no illusion about the pressures faced by councils on homelessness. In the end, we need to repair the system, which is about providing safe, secure and affordable housing for people to live in. We will do that, but we also recognise that there is a problem today. Further detail on that will follow.

--- Later in debate ---

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

High streets are the beating hearts of our communities. Those in places such as Broadstone in my constituency are really bouncing back and reinventing themselves. The public assume that councils are able to flex business rates and that they own most properties, but we all know that that is not the case. Will the Minister provide a timeline for the reform of business rates, and assure pubs and shops that their existing reliefs will be maintained?

[Alex Norris]

I am afraid the hon. Lady puts me in quite the pickle. With less than 48 hours before a fiscal event she would not expect me to pre-empt the Chancellor, but we have heard the hon. Lady’s calls and those from business. Alongside any rates changes, we will seek to provide the tools, such as high street rental auctions or community right to buy, to give communities control of their high streets again.

City and Town Centres: Regeneration

Vikki Slade Excerpts

Wednesday 16th October 2024 Westminster Hall

[Vikki Slade (Mid Dorset and North Poole) (LD)]

It is a pleasure to serve under your chairship, Mr Vickers, and to represent the Liberal Democrats for the first time as a Housing, Communities and Local Government spokesperson. The regeneration of towns and cities is an intensely local matter, and it must be approached from a local perspective. Telling people what will fix their towns is the best way to fail. Cities and towns evolved over many decades, and the vestiges of every generation serve as a reminder of what once was, and local authorities need to balance the need to retain the heritage of a place with having an eye to the future.

Toxic nostalgia about how places were when we were young can be a dangerous inhibitor to regeneration. “When we were young” is subjective. For example, the department stores that sorted out our parents’ wedding lists, immortalised by Mrs Slocombe and Captain Peacock, belied the slum conditions and heavy pollution in the cities right outside those stores, and the Woolworths and Blockbuster Videos on the high streets of my childhood are remembered much more fondly than the massive dole queues on those very same high streets. We also forget how the infamous pick ’n’ mix counter destroyed so many independent sweet shops.

City centres have always changed over time, and if we want to avoid another decade of decline after the shocks of Brexit and covid, we need the Government to invest, and to hand the resources and responsibilities to councils and communities. We also need to make sure, as previously mentioned, that our towns and cities give visitors an experience. Shopping will still be part of that, but rarely do people go to the city for just shopping; it is now for eating, playing, meeting, working or living, and we need to make sure that high streets are not just about retail any more.

The Government need to help businesses become more efficient and make the most of technology, but also to provide people with the skills to adapt to their second or third careers. That could be through better use of the apprenticeship levy and supporting both further education colleges and specialist skills providers in offering more bespoke and more agile courses, particularly for people for whom traditional education has failed. One example is Mike Taylor Education in my constituency, which offers high-quality barbering courses from a high street location and supports other thriving businesses with their future workforce.

Liberal Democrats want to see the various pots of money, such as the future high streets fund and the towns fund rolled into a single pot, like with the shared prosperity fund, and we want to avoid the cliff edge that we are expecting in March 2025, so that councils know where they stand for at least another year while a longer term funding cycle is developed. We must learn lessons from the past: under a previous Conservative Administration, Bournemouth’s council approved an out-of-town shopping centre, which led to a mass exodus of most of the corporates from the town centre.

[Amanda Martin]

Does the hon. Lady agree that we need some focused solutions? She has talked about holistic approaches, about the changes in our high streets and about how we need them for communities. That could be for new GP surgeries, for nurseries—whether private or local authority—for pop-up markets, which we have heard about, for art studios, or for facilities that we need, such as baby changing and public toilets. Does the hon. Lady agree that, in order to do that, we need to reform business rates and ensure our local authorities’ planning departments have the capacity to look at those changes? Does she agree that we need cross-Government working, including with the Home Office to make our streets safe, and the Ministry of Housing, Communities and Local Government to support local authorities and update planning systems—

[Martin Vickers (in the Chair)]

Order. I think you are trying to have the 30 seconds you lost. Interventions should be much shorter.

[Vikki Slade]

I will come to business rates later, and I absolutely agree that meanwhile use is important.

The out-of-town shopping centre was such a catastrophe because it was cost-effective for major retailers to go there as they did not need to navigate the town centre traffic, there was no need to maintain historic or awkward buildings—the hon. Member for Macclesfield (Tim Roca) spoke about the difficulties with his Marks and Spencer—and customers and staff could be given free parking. We are seeing similar mistakes in my constituency of Mid Dorset and North Poole: low-cost supermarkets are buying up seemingly easy plots on the edge of town, forcing everyone into their cars to visit, rather than investing in underused or empty awkward town centre units. Central Government might be able to invest in them in order to drive people into town.

[James Naish (Rushcliffe) (Lab)]

I was the leader of Bassetlaw district council. Bassetlaw was the home of Wilko, which of course went under two summers ago. Only a month or so later, the Government announced that 55 towns would get £20 million to create shiny projects. Does the hon. Lady agree that we should think differently about retail units that play a social function, as well as an economic function, in our town centres?

[Vikki Slade]

I am delighted that Poole was one of the places to get its Wilko back a little while ago—that was a great celebration. The hon. Gentleman is absolutely right: some town centre units are anchor spaces, and planning and financial levers such as allowing councils to keep their locally generated business rates could transform them by allowing them to work with businesses. Currently, councils have to back-fill those lost business rates sent to the Treasury; council tax payers fund that, which is a big ask for them.

As many Members have said, business rates must be an urgent priority from the Government—

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

indicated assent.

[Vikki Slade]

I am confident from the nodding I see that that they will be. In fact, that is what first got me interested in politics: I felt the unfairness of business rates when I had my own high street business. The Liberal Democrats want to replace business rates with a commercial land owner levy, alongside an increase in the digital services tax, which would boost investment and cut taxes for businesses in nine out of 10 English local authority areas. It would benefit retailers and other small businesses, and would reduce the burden on councils as there would be fewer land parcels to tax.

There is deep concern, not just from the Liberal Democrats but from the LGA, which represents the whole local government family, about the unfettered use of permitted development. Converted offices often provide poor living spaces, and using permitted development means that affordable housing and community infra- structure is not provided. That puts a greater burden on local people and services, and negatively impacts community cohesion.

City and town centres need the same careful plan-led development as suburban and rural areas, and community consent must be at the very heart of regeneration. If we do that, I am sure many of the 1.5 million new homes that the Government plan can be delivered, but that will only work alongside high-quality design and a substantial injection of grant funding. Housing development in urban areas is complex and expensive, and organisations such as Homes England and other funding will be needed to provide that support. Cranes in the sky are the best energiser of the local development market, and sometimes councils must blink first. Schemes such as Holes Bay in Poole need urgent support so that we do not miss the opportunity to thrive under this brand new Government.

Towns and cities need people to come in, so we must urgently reform transport. We must welcome the potential for councils to franchise bus services if it is right for them, but it is not just about buses: the national grid must be boosted so that electric vehicles can be turbo-charged, and we need a 5% reduction on VAT on public charging so that everyone has the right to drive EV.

We really need legislation on the use of e-scooters. We must improve our pavements, deal with delivery mopeds, which are making people’s lives an absolute misery, and tackle congestion on our streets.

A vibrant town centre needs arts and culture, reflecting our diverse populations. Events such as Wimborne folk festival and Wareham Wednesdays draw people in from surrounding towns and villages. Bigger events, such as Arts by the Sea in Bournemouth and Poole Oktoberfest, draw people in during seaside shoulder time and— I agree with the intervention made earlier—they create the opportunity for investors to see our towns at their best.

We need to make sure that councils can afford to support tourism. The squeeze on councils over the last decade under the Conservatives has made it virtually impossible for councils to fund these non-statutory things. I would like the Government to keep considering options such as tourism levies, local visitor economy partnerships and other ways for local councils to generate income. Lib Dems call on the new Labour Government to properly fund local government, urgently close the £4 billion local government funding gap and let councils lead change.

As a former council leader I have witnessed how councils have had to reinvent themselves time and again. They touch every home and business, so investing locally will pay dividends. We know what works. Just as importantly, councils know what does not work. Just like the big industries that shaped our cities for the first half of the 20th century that are not coming back, the giant retailers that shaped our town centres in the second half are part of history, too. To create thriving communities, we need the Government to invest locally and let places choose how they regenerate.