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House of Commons Hansard
18 July 2016
Volume 613
  • 1. What progress his Department has made on enabling local authorities to retain 100% of business rates. [905883]

  • I should like to associate myself with your comments about the tragedy in Nice, Mr Speaker. I am sure that the thoughts and prayers of the whole House are with the victims and their families and friends. I also warmly welcome the establishment of the Cox Committee.

    The full retention of business rates is a reform that councils have long campaigned for, and it will shape the role and purpose of local government for many decades to come. To deliver this commitment, we have already published an open consultation inviting councils, businesses and local people to have their say on how the system should operate.

  • I congratulate the Minister on his new appointment and I really look forward to working with him. Businesses want to move to Telford all the time, and for that reason the move to 100% business rate retention will mean welcome extra revenue for our council. Are there any plans to top-slice business rate income from councils with higher levels of business rate income to subsidise those with lower levels?

  • We want councils to take bold decisions and to use the benefits of this measure to boost local growth. Some redistribution will be necessary among authorities to ensure that no council loses out if it collects lower business rates, but I can reassure my hon. Friend—who already does a lot to boost business in her local area—that where that is done, it will keep the extra revenue.

  • For business rates to keep flowing, we need our top companies to keep prospering. The Secretary of State might be aware that ARM Technology, a major Cambridge company, has today been acquired by a major Japanese company. What conversations has he had with the former Business Secretary on ensuring that guarantees are maintained and that the jobs involved are retained in the UK?

  • Very tenuous—ingenious, but tenuous.

  • I warmly welcome investment in our local communities—including in Cambridgeshire—wherever it comes from. I have not had a conversation with the Business Secretary, given that this news was announced only recently, but I know that the Chancellor has already issued a statement.

  • At present, the way in which business rates work imposes rates on empty properties. This is holding back many urban regeneration schemes. Will the new Secretary of State therefore reform the way in which those rules work before the whole scheme is transferred to local authorities? That would make a crucial difference to the modernisation of our housing estates in particular.

  • My hon. Friend raises an important point, and I know that he speaks from experience as a former housing Minister. I will certainly take a fresh look at that.

  • I welcome the Secretary of State to his new post. May I politely say to him that not every area has the same ability to raise income from business rates or council tax, and it is often the poorest areas that are disadvantaged as a result of lower income generation from both sources? Will he look at the example of Tameside Metropolitan Borough, which would need an additional 16 Ikea stores just to break even on its business rate retention? Will he ensure that, when he looks at redistribution, he ends up with a fair settlement for areas such as Tameside?

  • The hon. Gentleman makes a valid point. The needs of each area are different, which is why at the same time as launching the consultation we launched a fair funding review to look at the issues that the hon. Gentleman raises.

  • May I also associate myself and Labour Front Benchers with your remarks about the atrocity in Nice, Mr Speaker?

    I welcome the Secretary of State for Communities and Local Government and his team to their new positions—it is an important brief.

    I point out to the Secretary of State that his Government have broken the post-war cross-party consensus on the equalisation of resource allocation. To echo the comments of my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), does the Secretary of State realise that the most deprived communities with the greatest needs often have the lowest tax bases and the least ability to raise their own business rates?

  • I warmly welcome the hon. Gentleman’s words. As I have said, as we approach the policy of 100% business rates retention, there will of course be some redistribution to ensure that no council loses out if it has a low business rate funding base. The fair funding review will look at just that—fair funding—to ensure that every local area gets the funding it deserves.