Local Government Finance

Andrew Gwynne Excerpts

Monday 18th July 2011 Commons Chamber

[Mr Pickles]

I am pleased to be able to give my hon. Friend that assurance, because for precisely the reasons that he suggested, we are retaining the existing formula, to ensure that councils benefit with real economic growth not increased taxation.

[Andrew Gwynne (Denton and Reddish) (Lab)]

On 20 June I raised with the Secretary of State the potential impact of localising business rates on Tameside, which could see a drop in its funding of 35.7% a year. He tried to assure me that that would not happen—at least not in year one—but can he explain how the system of tariffs and top-ups will work, at no cost to central Government, if prosperous areas are to keep the proceeds but poorer areas are to be fully reimbursed? The maths just does not add up.

[Mr Pickles]

I suspect that the hon. Gentleman might not have given my initial statement the attention that he perhaps should have, because we made it absolutely clear that no council would lose out in year one—that funding continues—and local councils such as his will be able to enjoy the benefits of growth. Under the current system his local council might get a “Thank you” from the Secretary of State for showing initiative and bringing in new business, but the Government then immediately take the money back. We think that that money should stay with his local authority.

I remember the hon. Gentleman’s previous question, and I said then that I thought he should defect to us. I still think that he should defect to us, but when he has an opportunity to read the submission document, I suspect that we might be able to arrive at a consensus, because what we are doing is not intended to punish his authority; rather, it is intended to unshackle his authority, for all the potential that it has. If you do not mind my saying so, Mr Deputy Speaker, I really do not think that the counsels of despair from the other side of the Chamber are reflective of the dynamism and entrepreneurialism that exist in local authorities.