Non-Domestic Rating (Rates Retention, Levy and Safety Net and Levy Account: Basis of Distribution) (Amendment) Regulations 2020 — House of Lords, 2020-11-03
Topic: Government Operations
Stephen Greenhalgh (Conservative, Centre-right): My Lords, we have had a good innings on the regulations before us today. I thank noble Lords on all sides of the House for their contributions. I shall take this opportunity to provide some further detail on some of the points which have been raised The noble Lord, Lord Kennedy of Southwark, mentioned Millwall Football Club. As a Chelsea supporter, it pains me to say that they are some way down the league, but I pay tribute to Millwall and what they do. I saw that as deputy mayor for policing and crime, and I also saw what Charlton did in south-east London to deal with the scourge of knife crime. We must remember Millwall’s chant: "No one likes us, we don’t care." That is not the case with the noble Lord, Lord Kennedy; we all love him I will take back the points made by the noble Baroness, Lady Scott, about responsibility for these issues. She asked a number of technical questions, on which I will write to her. The non-domestic revaluation Bill has gone through the Commons and we are waiting for Second Reading in this House, when time allows. The noble Baroness also asked about the working group which comprises the LGA, CIPFA and a range of local authorities. It has been in existence since 2013 and looks at the technical operation of the rates retention scheme. On behalf of the Government, I thank the working group for the work it is has done so that we can understand better how the rates retention scheme plays out locally The noble Lord, Lord Liddle, asked about the future of local government finance reforms. In May, we announced our intention to delay proposals to deliver the review of relative needs and resources—formerly the Fair Funding Review—in 2021-22. The decision was taken to allow the Government and councils to focus on meeting the immediate public health challenges posed by the pandemic. The approach to business rates retention in 2021-22 is under consideration and will be clarified at the spending review and provisional local government finance settlement Looking to the future and in determining the next steps, we will need to consider the impact the pandemic has had on demand for public services across local government and its access to resources. As the local government finance system moves into a more stable position, we will set out the timetable for our proposed way forward The noble Lords, Lord Liddle and Lord Shipley, raised the need for a fundamental review of business rates. At Budget 2020, the Government committed to a fundamental review of those rates. The Treasury is currently carrying out that review, which will look at all aspects of business rates as a tax. The Government have said that they will consider carefully the link between the fundamental review of business rates and the future of business rate retention. We will engage with the sector—local councils—very carefully as part of that review. Of course, we have launched an unprecedented support package for businesses, and business rates income has changed drastically in response to Covid-19. We will provide an update on the fundamental review as and when we can The noble Baroness, Lady Scott, asked for an explanation of what I believe the noble Lord, Lord Shipley, described as one of the most complicated systems, involving algebraic formulae and decimals to four decimal places. I certainly do not understand the mathematics, but it is quite straightforward conceptually. Fifty per cent of the business rates collected are retained by councils. Where there are two tiers, the upper tier retains 20%—in London, that would be the GLA—and 30% is retained by the boroughs. Then, there is an element of redistribution, but also a safety net so that a council bears only the first 7.5% of losses and 82.5%—the rest of the losses—are protected by the central pot. Does that make it infernally complex? There needs to be a debate about local government reform. Do we go down the path of setting areas free so that local leaders can drive and grow their tax bases? Then we would not see the resource equalisation that we have today. Do we go for a halfway house? That is a debate that will have its time. I have my views, and I hope noble Lords will have the opportunity to express their opinions. It is a legitimate debate about the future conceptually of local government finance I have put on my Middlesex tie. I got one cap for Middlesex as a schoolboy. It was not for cricket; it was for rugby. I know that the son of the noble Lord, Lord Botham, was an exceptionally good rugby player, and the noble Lord himself played centre forward for Scunthorpe as well as being a brilliant cricketer for England. We must remember that his moment of greatness happened at Headingly in 1981. I remember it so well. He took, I believe, six wickets in the first innings when we looked like we were going to lose. By the second innings the nation thought we had lost the Ashes to the Australians who, I am sure noble Lords will agree, deserve a good beating from time to time. The noble Lord stepped in and that moment of greatness was when he started smashing the ball across the park. I believe one shot went into the confectionary stall and out again. I had the commentary of Richie Benaud ringing in my ears. That moment of greatness changed the course of the match. I think the odds on an England victory were 500:1 at the time and some Australian players had even put a bet on. I think that is probably illegal today The true greatness was also the captain, a Middlesex man. I am sure noble Lords will agree that the captain, Mike Brearley, knew when to play the noble Lord, Lord Botham, and when to make the best of his talent as a swashbuckler. That swashbuckling talent is now heard about at Select Committees. Officials will say to you, "I will be Boycott so that you can be Botham". But they will also say, "You must keep your feet on the ground, Minister" Chandru Dissanayeke is a senior official in one of my departments, MHCLG. He is Sri Lankan by birth. His uncle played for the Sri Lankan team. Now, this is apocryphal, so I will have to get the noble Lord, Lord Botham, to confirm or deny this. Apparently, the noble Lord said to Sunil Gavaskar, "To get a letter to me in my county of Somerset you just have to put ‘Botham, Somerset’". Sunil Gavaskar turned to him and said: "To get a letter to me you just have to put ‘Gavaskar, India’ and it will reach me’". That gives you an idea that fame is sometimes fleeting I was hoping that the noble Lord, Lord Botham, would be here today. It is a pity that he has not been able to be here today in person. I hope that when events allow we can have a drink together in the Pugin Room. It would be a lifelong dream for me, and I am sure noble Lords will see his contributions for many years My noble friend Lord Bourne asked so many questions. I have them all written down here. I will put a letter in writing in the Library. There are a lot of technical points and I think it is better to get a full response in writing. It has been an incredible debate, with the combination of the brilliance of the noble Lord, Lord Botham, and the eloquence of so many noble Lords.