Clive Betts
Main Page: Clive Betts (Labour - Sheffield South East)
Andrew Stunell
The flexibility on discounts will apply to all empty homes from day one, not just to those that have been empty for two years. The two-year condition relates to the empty homes premium, which is a separate provision that is being put in the hands of councils by the Bill.
The hon. Member for North Durham (Mr Jones) made some interesting points, but he did not seem to be aware that, whereas Wokingham has the capacity to generate £700,000 extra income, Wigan, which he mentioned specifically, has the capacity to generate £2.2 million from the discounts. If Wigan chose to implement those measures, that would completely offset the funding gap he talked about.
To be clear, much of the shroud-waving from the Opposition is completely misplaced. It was strange that the hon. Member for North Durham argued—although he tried to back out of it—for additional cuts in council tax benefit for pensioners, because he wants councils to have the flexibility to switch their spending on pensioners to others whom he thinks are more worthy of protection. That is a point of view, but it is not one that the Government share.
I have a lot of time for the right hon. Member for Wentworth and Dearne (John Healey). He served time in the Treasury, during which I believe he was party to the introduction of the 10p tax rate—[Interruption.] We all have skeletons we wish we could keep in the cupboard. When it comes to protecting the low-paid, it is this Government who have raised tax thresholds for low-paid people, many of whom are women, of course, and will take 2 million people out of tax over the next three years.
The right hon. Gentleman did get round to welcoming the localism measure, but—not for the first time—he wants localism, but not yet. The Opposition do not have a strong track record on localism, but they have realised just how important it is to the people we represent. They now pay lip service to it at every opportunity, but I see no sign that it goes beyond lip service to their agreeing to implement localism in practice. At every turn, they try to delay, dismantle and divert the successful attempts of the Government to localise decision making and give local communities the power to take decisions about their services.
I answered the right hon. Gentleman regarding Rotherham’s figures. He mentioned Barnsley, and its figures are an almost exactly equal balance, just slightly in favour of Barnsley, with £1.6 million in each direction. He also waxed lyrical about the new clause 2 single person discount. Some 29% of households are single person, and another 7% are single-parent households. I do not believe that he would want to put those people under additional pressure. The Government do not accept that new clause 2 is the way forward.
The right hon. Gentleman also made an interesting point, of the kind that only a former Secretary of State might make, about what would happen if a council tax referendum failed and the impact that would have on the scheme. The scheme that a local authority sets up by 31 January each year will have statutory force and cannot be changed for the following 12 months, so it would be required to be considered in any reduced budget. Of course, when a local council sets up its scheme, it will be with the full knowledge of its intended settlement. As I say, the right hon. Gentleman welcomes localism, but he does not want it yet.
I draw to the attention of the hon. Member for Warrington North (Helen Jones) one of the documents we published last week, “Localising Support for Council Tax: Vulnerable people—key local authority duties”, which sets out clearly the factors that a local authority needs to have in mind when it exercises its discretion and introduces a scheme. When she studies that, she will find that many of the questions that she raised are answered and her concerns are dealt with.
The hon. Lady commented on the introduction of the Welsh Assembly clauses. She will know from what the Government said previously that we took the time to consult with our colleagues in the Welsh Administration, and it is at their behest that the clauses take their present form. That is an example of the Government taking a measured approach, consulting with the relevant bodies and introducing proposals entirely in accordance with the Welsh Administration’s views.
The hon. Lady also drew attention to an amendment on consulting with those affected. There is a requirement on local authorities, when they have drawn up their scheme, to consult with those whom they believe will be affected. That clearly will involve a consultation with all the groups the hon. Lady mentioned.
Mr Clive Betts (Sheffield South East) (Lab)
I apologise for not being here earlier, but I was at a Select Committee meeting.
My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) apparently raised the point about the time local authorities will have to propose a scheme, consult on it—as the Minister has just described—and then get their providers of services, such as Capita, to design the schemes and implement them. In January, Capita raised concerns about the time constraints that it would face and its real worry that it would have inadequate time to do that. Is the Minister convinced that local authorities will have adequate time and that there will be no problems with the delivery of services to constituents?
Andrew Stunell
That is exactly why we produced the statements of intent—to give local authorities and their providers the longest possible time to understand how they might best design and develop a scheme. That is also why we have provided a significant sum of money to assist them in doing that.
The hon. Member for Warrington North also asked about criminal offences being created by the Bill. The Social Security Administration Act 1992 creates several criminal offences in relation to council tax benefit, including an offence of dishonestly making a false statement and one of knowingly making a false statement for the purpose of obtaining council tax benefit. There is a different standard of proof for each offence, as I suspect that the hon. Lady knows better than I do. Greater penalties apply if it can be shown that a person has acted dishonestly.
John Healey
My hon. Friend, who has experience of local government, has put his finger on the button. What worries me is that the Bill gives the Secretary of State power to set the central and local shares—in other words, to determine the division of the business rates take—in each and every year, indefinitely. I am not talking just about what will happen next year and the year after that, or about what will happen until the end of the current spending review period. From year to year, local government simply will not know where it stands until the Secretary of State makes the decision. The central and local shares could vary, and central Government could decide to take a greater share.
The Government’s top-slicing of at least 50% of the business rates revenue and 50% of the business rates growth above the baseline will reduce the incentives for local authorities to support growth, which were meant to be part of the design of the system. It will also reduce the certainty that would enable authorities to plan their finances on more than a year-by-year basis, and reduce the Government’s own ability to claim that this is a localising reform. I am sure that we will hear from the Minister—and I have heard this before—that the Government have declared their intention of returning the revenues in the central share to local government; but, as has been pointed out by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), we have been given no details, and we do not know what purposes or constraints that may entail.
Mr Betts
My right hon. Friend has raised an important point about what the Government may choose to do with the extra money from the business rates that will accrue each year. The suspicion has been expressed that they will use it to ensure that local authorities must fund more and more council tax benefits. That would be a simple way of transferring responsibility for benefits to local authorities.
Helen Jones
I could not have put it better than did my hon. Friend. These services are demand-led; they are not within the control of the local authority, and they are, as he said, very expensive to provide, as they must be. We are dealing with some extremely damaged and vulnerable children in local authority care. Surrey has 32 looked-after children per 10,000 of population, and Wokingham has 22, compared with 104 per 10,000 in Middlesbrough and 100 per 10,000 in Newcastle. That is a stark example of the differing levels of need in local authorities, and the idea that those services should be left to the vagaries of the market is breathtaking.
My right hon. Friend the Member for Wentworth and Dearne, who is no longer in his place, gave some good examples of how business rates can vary from year to year. It is entirely unpredictable, yet this Government still refuse to recognise those different levels of need within local authorities.
Mr Betts
Am I being a little cynical when I say that the Government have devised a scheme that is now so complicated—top-ups, tariffs, set-asides, then revaluations, and on top of that the fact that only 50% of business rates will be returned to local authorities, and a rate support grant element as well—that when they achieve what they are trying to do, the transfer of money from deprived communities to more affluent communities, it will be virtually impossible to explain to anybody what they have done?
Helen Jones
I do not think my hon. Friend is at all cynical. He is exactly right. The whole point of the Bill, as we have said throughout, is to centralise power and devolve the blame. We saw it earlier when we were debating council tax. We are seeing it now in the Government’s plans for business rates. I believe their aims are simple. They go about it in a complicated way, but the basic aim is very simple: to ensure that whoever gets the blame for cuts in local services, it is not them. It is also to ensure that the voices of those who are most in need are excluded from this debate.
We believe that the views of those people ought to be heard. Let us think about who they are. They are elderly men and women who have contributed all their lives and who are not getting the home care that they need in their old age, or are paying too much. It is a child in a family who may not be well-off but is dependent on local libraries for his or her education. It is the most vulnerable children in need of care and protection. These are the people to whom this Government pay no heed. We have moved the new clause because we do not intend their needs to be forgotten. I urge my hon. Friends to support it in the Lobby. It might help if I indicate that we will press it to a vote.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
I agree with the point that the hon. Member for North West Durham (Pat Glass) makes: local authority funding is complex. I spent 16 years in a local authority and another eight on the Greater London authority dealing with funding issues, so I say to her gently, because I recognise the sincerity of her point, that the instance to which she refers occurred on the previous Government’s watch. Despite her indication that it was a risk in the system, it was a risk because of the opacity and complication of the funding system and the operation of the formula grant, which this Government inherited and are changing. I understand that there is a problem, but this Government are fixing it.
Robert Neill
I am going to make some progress if the hon. Gentleman will forgive me—[Interruption.] Very well, I will give way on that point, but I may not again.
Mr Betts
The Minister says that the system is being reformed because of the complications of the current system. The Secretary of State, in his initial statement to the House, said that the Government’s objective was to create a new and simpler system. Does the Minister think that the Government have achieved that objective?
Robert Neill
Compared with formula grant that the Labour Government left behind, yes I do. That view was shared by the Lyons inquiry, which the previous Government very conveniently buried because it did not suit their purposes.
Might I now turn, Mr Deputy Speaker, specifically to the two sets of amendments and new clauses before us? I am sorry that the right hon. Member for Wentworth and Dearne (John Healey) is not in his place, because he made a thoughtful and well considered speech. I had the pleasure of shadowing him for a time and I respect his concern about the matter, so in fairness to his arguments, I will deal with the points he made.
New clause 1 relates to the operation of set-aside and the position of tax increment financing schemes—TIFs. The Government are committed to making TIFs option 2, which is what we are talking about, successful. I am glad to learn that when he was in government the right hon. Gentleman was an advocate of TIFs. He was not, unfortunately, able to persuade those further up the governmental pay scale to introduce them, but I do not doubt that he tried hard. This Government are doing what everybody asked and succeeding in introducing them. He is quite right that for TIFs to operate properly there has to be a degree of certainty, but the change he proposes is not necessary because the provisions in the Bill already enable that to happen.
The Government’s intention, as indicated in the White Paper, is that a ring fence exempts TIFs from the calculations of the levy, the set-aside and any reset, and the Bill already permits that. We also intend that, under the system, the additional uplift in rates retained be disregarded when setting tariffs and top-ups, not only in relation to the option 2 TIF scheme, but in respect of enterprise zones. That is why “proportion” is used in the regulations about which the right hon. Gentleman is concerned. The intention for TIFs is 100% ring-fencing, but in relation to enterprise zones, as hon. Members will know, the uplift in rates is retained from a starting point, so there is a proportion. The wording is used simply to cover both types of scheme and to enable both to be ring-fenced.