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Business Rates

Volume 602: debated on Monday 9 November 2015

10. What recent discussions he has had with his ministerial colleagues on proposed changes to business rates. (902057)

By the end of this Parliament, local government will keep 100% of the business rates it collects locally. This represents a major step in devolving powers and responsibilities to local government. In developing the scheme, I will discuss the details with ministerial colleagues, local government and business.

Business rate policy is vital to the continued planned development of Wellingborough. A planning inspector recently said that Wellingborough did not have a five-year land supply and allowed a completely unsustainable development in the village of Isham. How can the council plan for business rates and council tax when its land supply figure is challenged? Is it possible for the Secretary of State to certify whether a council has a five-year land supply?

My hon. Friend will know that under the national planning policy framework all planning authorities must be able to demonstrate a five-year land supply. At this point, I am not able to make a specific commitment in relation to Wellingborough, but I certainly undertake to write to my hon. Friend on this very important issue for his constituents.

My local authority, Kirklees, estimates that it would be £32 million short if the proposed business rate changes had been made this year. What plans does the Minister have to make sure that certain authorities, such as mine, are not penalised by the proposed changes?

I thank the hon. Lady for that important question. We are going to work with local government in implementing this policy. I can assure her constituents that there will be some form of redistribution of resources between councils under the new scheme so that areas do not lose out just because they start from a weaker position than others.

The imposition of business rates on empty properties is increasingly holding back the regeneration of brownfield sites in town and cities. Before any devolution, may I strongly encourage Ministers to revisit and reform this part of the system so that we can build more homes and workplaces?

My hon. Friend will know that a business rate review is currently under way. We will take into account all the factors in relation to business rates, empty property business rates and so forth in that review, which will be updated at the spending review and the autumn statement. Further information should be available by the end of this year.

The Government’s plans to localise business rates are very welcome, but without a clear plan to equalise funding it could simply widen the gap between the most and the least deprived communities. We need to hear what specific measures the Minister wants to put in place to address that question, and councils need to know when he intends to make such an announcement so that they can plan.

The hon. Gentleman will know from my answer to the hon. Member for Batley and Spen (Jo Cox) that we are considering this matter very carefully with local government. We will discuss the new scheme coming forward with local government, and, as he knows, there will be a redistribution of resources. Just to reassure him, under the current business rate scheme brought in by the Government several years ago, areas such as Leeds will benefit from £15 million in additional income from the current scheme this year. That is as a result of the scheme that we have put in place, and I do not think it is disadvantaging the type of areas to which the hon. Gentleman refers.