Local Government Finance Bill

Mark Pawsey Excerpts

Tuesday 10th January 2012 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

I thank my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), a fellow member of the Select Committee on Communities and Local Government, for keeping his remarks so brief in order to enable me to make one or two comments of my own.

Allowing local authorities to retain part of the business rate is a key part of the Bill and I wish to speak from the perspective of a business owner, which is what I was for 25 years before arriving in this place. Business rates were a significant cost to my business, as they are to every other business, being the third largest tax we paid. They cost several thousand pounds a year, and they increased as my business grew and moved to larger premises. As a business man, it came as a bit of a shock to me, before getting involved in politics, to realise that the business rate bill that I paid to my local authority was not spent by my local authority in pursuit of services in the area in which I was based, but went into a central pool. It is entirely right that a proportion will in future be retained by the local authority, because promoting growth is a key role for local authorities. It is also very important to business owners, because that growth develops new customers and new clients for businesses and provides a better situation for staff.

I wish to discuss one issue not covered by the Bill, which is vacant commercial rates. There was an opportunity to extend relief to businesses that own vacant premises. The rating of those premises is causing hardship to the business community and it is making it difficult to encourage business growth, because there is currently no speculative building of business units and it has encouraged the demolition of vacant older industrial buildings so that the tax can be avoided. I wish to distinguish that approach from the provision on empty homes, because the housing market is distinctively different from the commercial property market. I welcome the empty homes premium, because we have 700,000 vacant homes and it is important that we provide an incentive to bring them into use.

I wish to discuss a final point about the influence of planning permissions. We await the outcome of the national planning policy framework, but there is a risk that the retention of business rates could become an additional incentive to grant planning permissions for developments that are not necessarily in the most appropriate locations. I hope that that concern will be addressed by a robust commitment to town centres first in the final draft of the NPPF, as the Select Committee report suggested.

I welcome the Bill. It is consistent with the Government’s decentralisation and localism provisions, it is a step change away from the dependency culture we have had up until now, and it pursues a strong localism agenda that will prioritise economic growth, which I will always support.