Budget Resolutions

Richard Burden Excerpts

Thursday 9th March 2017 Commons Chamber

[Sajid Javid]

The hon. Lady rightly points to the challenge of ensuring that employers recognise the changes. Initiatives such as the new Institute of Apprenticeships, which is employer-led, will help to set the standards for the technical training. That will make a difference in ensuring that employers welcome the new qualifications.

The measures I have talked about so far will improve lives right across the country, but we recognise that local areas across Britain want greater control of their own services and infrastructure. The Government, the Greater London Authority and London Councils have reached an agreement on further devolution for our great capital city. This includes exploring a pilot for a development rights auction model and joint work to identify what elements of the criminal justice services can be delivered locally. We will also be agreeing a second health and social care memorandum of understanding to support work on prevention, integration and estates reform.

However, there is more to this country than its capital city. I should know: I was born in the north, raised in the south-west and elected in the midlands. Today, the Chancellor is in Dudley, launching our midlands engine strategy. This follows the northern powerhouse strategy published after the autumn statement.

[Richard Burden (Birmingham, Northfield) (Lab)]

The Secretary of State and I are both midlands Members of Parliament. I welcome the focus on the midlands in the Budget. There are some useful initiatives in it. Would he care to comment on the strategy being brought forward today by Midlands Connect? It is charged with looking at the transport infrastructure side of delivering the midlands engine, and in particular at east-west connectivity, and it makes it clear that, for the midlands engine to work and deliver its potential, it will need a long-term perspective and investment of £1 billion per annum over a 30-year period. What confidence can we have that that long-term commitment will be given?

[Sajid Javid]

As a midlands MP, the hon. Gentleman will understand that the devolution deal for the region will lead to additional funding of more than £1 billion over the next 30 years, which can be invested in priorities such as transport infrastructure. I believe that the right leadership is in place, and that that is exactly what will happen. That is why I am supporting Andy Street to become the next Mayor, and I hope that the hon. Gentleman will join me in expressing his support for him. Perhaps that is what he was just doing.

The hon. Gentleman will also be pleased to hear that this morning we published details of £392 million of additional funding for the midlands, allocated through the third local growth fund. That money will further unlock the region’s potential, funding infrastructure and creating jobs. Much of it will go to Birmingham, for example. The Budget includes £90 million for the north and £23 million for the midlands from a £220 million fund that addresses pinch points on the national road network. The Chancellor has launched a £690 million competition for local authorities across England to tackle urban congestion and get local transport networks moving again. That is a serious investment in our communities that will make a real difference to the daily lives of millions of people and countless businesses. We can make that investment precisely because of the fair, progressive changes that we are making to the tax system. We are levelling the playing field between employees and the self-employed, and 60% of the self-employed—the lowest earners—will gain from these reforms. We are also continuing to reduce corporation tax on all profitable companies, large and small, so that hard-working entrepreneurs keep most of the fruits of their labours.

We are taking a number of steps to make business rates fairer. I have never made any secret of my support for business, and for small businesses in particular. Seeing my dad’s shop struggle was one of the reasons I came into politics in the first place. From the biggest cities to the smallest villages, the local high street and the local pub form the heart of countless communities across our country. That is why the Chancellor and I listened closely when concerns were raised over this year’s business rate revaluation, and why I was happy to work with colleagues across Government to secure action.

The majority of business will see no increase or even a fall in their business rates, but I know that if someone’s rates are going up, it is no consolation to hear that someone else’s will be going down. The bigger picture will not pay their bills, so the Budget introduces three new schemes that will help businesses facing steep rises. The first involves additional support aimed specifically at small and rural businesses that are losing some or all of their rate relief and are facing large percentage increases in their bills as a result. The additional relief will limit the annual increase in the bill for an eligible business to the greater of either £600 or the cap in increase for small properties in the existing transitional relief scheme. That is 5% in real terms in 2017-18. No small business losing some or all of its relief as a result of the revaluation should see its bills rise by more than £50 a month in 2017-18.

The second measure is the establishment of a £300 million discretionary fund for local authorities to use over the next four years. Each billing authority will receive a share of this funding and will be able to use it to deliver targeted support to the most hard-pressed ratepayers in its area. This will allow local authorities to more than double the amount they spend on discretionary relief in 2017-18. Finally, there is a new relief for pubs. This will provide a flat £1,000 discount in 2017-18 on bills for all pubs with a rateable value below £100,000. My Department will be publishing full details later, but up to 36,000 pubs—that is approximately 90% of them— could benefit from the relief. The cost of all three models will be met in full with new money allocated by central Government.

Recent consultations have shown little appetite for wholesale reform of the business rate system. However, there is scope to reform the revaluation process, making it smoother and more frequent to avoid the dramatic increases that the present system can deliver. We will set out our preferred approach to delivering this in due course, and will consult on it before the next revaluation is due. In the medium term, we need to find a better way of taxing the digital part of the economy so that online businesses do not enjoy an unfair advantage. This is another example of the way in which this Government deliver lasting reform alongside immediate investment. It is the difference between a sticking plaster and long-term cure.