Clive Betts
Main Page: Clive Betts (Labour - Sheffield South East)
Greg Clark
My hon. Friend can have that reassurance. The package for small businesses in the Budget has been warmly received by small businesses right across the country. It amounts to a reduction of nearly £7 billion over four years, and every penny of that will be made up to local councils, so small businesses will benefit and councils will suffer no detriment.
Mr Clive Betts (Sheffield South East) (Lab)
I would like to take the Secretary of State up on that so that he can explain precisely how it will happen. The Institute for Fiscal Studies said the other day that it is perfectly possible to compensate for the changes in small business rate relief at present, while there is grant in play, but that it will be nigh impossible to do that from 2020 onwards, when there will be no grant for the Government to use. Also, how, precisely, will the Secretary of State compensate for the change from RPI to CPI, given that that involves a variable that changes every year? How will the mechanism work?
Greg Clark
The answer to the first question is that compensation will be paid in the way that it always has been when we have reduced business rates: as a section 31 grant from Government to local authorities. That mechanism is tried and tested, as the hon. Gentleman knows, and it is the way these sums are always paid. He will also know that, when it comes to the full retention of business rates by 2020, the forecast, as I said, is that there is £26 billion of revenue, and councils retain £13 billion. Therefore, there are transfers that need to be made in, which will be taken into account by the end of the process. However, I know that his Select Committee, and local government generally, will want to help to advise on that.