Local Government Finance

Martin Vickers Excerpts

Monday 18th July 2011 Commons Chamber

[Mr Pickles]

Of course I would be happy to do that. I am sorry that the hon. Gentleman’s joke fell rather flat, but it was funny in retrospect. We will be adjusting the figures in 2013, assuming that we have leave to bring in the Bill, and we will provide an update on the latest figures because there are certain problems, particularly with regard to population. Members should understand that the figures will be based on the fact that relative need was increased to 83% so this is a very progressive settlement in terms of proportion, particularly for areas of relatively low income. Once the figures have been arrived at, we will continue with the new system.

[Martin Vickers (Cleethorpes) (Con)]

I welcome the Secretary of State’s announcements; anything that can be done to incentivise local authorities will obviously be beneficial. May I just query the section of his statement in which he talked about “a special local levy to capture a share of that benefit”? Local levies can of course sometimes be set at such a level as to create a disincentive. Will he elaborate on the level that he is considering?

[Mr Pickles]

I shall continue to answer the previous question as well, as I forgot to answer the point about disproportion. We need to understand that business rates grow in different parts of the country at different rates. If we did not have a levy, places such as Westminster, and Hammersmith and Fulham, would grow very quickly, and the amount of money coming in would be in the teens and twenties, although we would normally expect growth to be in single figures. We would therefore need to ensure that a levy was taken off, and we would use a sliding scale to achieve that. I always want to be in a position to ensure that, no matter how fast the growth—and even if it was only a tiny few pence in the pound—local authorities would continue to benefit. The more they grow, the more levy they will contribute to other parts of the country.