Non-Domestic Rating (Lists) Bill

Rishi Sunak Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 22nd July 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move, That the Bill be now read the Third time.

I always try to be pithy, Mr Speaker, as you instruct us to be, but this is an important matter, so we shall proceed without too much haste.

Ratepayers have told us that the current system, with revaluations of business rates every five years, has not been responsive enough to changes in the rental market. They have asked us for more frequent revaluations so that the system is fairer and more closely reflects the rents that they actually pay. This small but significant Bill delivers what business has asked for: it moves business rates revaluations in England on to a three-yearly cycle, and brings forward the next revaluation to 2021 so that ratepayers benefit from the change as soon as possible.

I am grateful for the contributions of all Members, both on Second Reading and in Committee, and thank them for their support for the Bill. In the public evidence sessions, we heard from various business groups that expressed their support. I thank them, including the Confederation of British Industry, the British Retail Consortium and the Association of Convenience Stores. I give particular thanks to the Local Government Association and the Chartered Institute of Public Finance and Accountancy for not only their comments in the evidence sessions but their work with my officials to ensure that we can implement the Bill in a manner that meets with their approval.

Lastly, I give thanks to the shadow Minister, the hon. Member for Oldham West and Royton (Jim McMahon), who has been, as ever with these relatively short and uncontroversial Bills, thoughtful and constructive in his approach. I am of course grateful to the Clerks of the House and, indeed, to my team, who have managed to get this important legislation through its various stages with efficiency and effectiveness.

This is a small but important Bill that continues our support for business in this country, and I commend it to the House.

Oral Answers to Questions

Rishi Sunak Excerpts

Monday 22nd July 2019 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

4. What assessment he has made of the ability of each local authority to fulfil its statutory care duties by the end of the 2019-20 financial year; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

Mr Speaker, I join you in wishing the hon. Lady a very happy birthday—what better way to spend it than at MHCLG questions.

It is the responsibility of each individual local authority to ensure that it can fulfil its statutory care duties. We have, however, supported councils to meet those duties by giving them access to several billion pounds of incremental dedicated funding for this purpose.

[Mr Speaker]

Birthday woman and man in a hurry.

[Louise Haigh]

I am very grateful for those birthday wishes, but I would be even more grateful if the Minister agreed with me that local authorities have a statutory responsibility to ensure that care workers they have commissioned are paid the minimum wage. The all-party parliamentary group on social care has heard increasing evidence that, despite guidance issued by Her Majesty’s Revenue and Customs, care workers are still not receiving the minimum wage because they are not paid for travel time in between their contact hours. Will the Minister give me a great birthday present by announcing that he will review the way care workers are paid and that he will ensure they are paid the basic statutory minimum wage?

[Rishi Sunak]

I thank the hon. Lady for raising this important issue. It is absolutely right that those who are carrying out this vital activity in difficult circumstances get exactly what they are entitled to. I have not seen the report, but I would be delighted to take a look at it later today and to talk to my colleagues at the Department for Education and the Department of Health and Social Care to see what we can do to take this forward.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

If I had not been sitting down, I would have fallen over when the Secretary of State talked about the injection of extra cash for local authorities. This is, of course, on top of about 40% cuts in just under a decade. Local authorities are very squeezed in delivering their statutory care responsibilities and others. Will the Minister look seriously at all the work that is being done on homelessness and community building and assess the impact of these cuts in delivering wider Government policies on prevention and ensuring that people have decent homes to live in?

[Rishi Sunak]

I would echo what the Secretary of State said. This talk of cuts is simply not right. The amount of money that local authorities have to spend in this financial year is up in real terms over the last year. This was reinforced by the recent Budget, where we announced over £1 billion in incremental funding for local authorities, particularly targeted at the areas of immediate pressure in adult and children’s social care.

[Mr Speaker]

I call Dr Alan Whitehead. Not here.

--- Later in debate ---

[Imran Hussain (Bradford East) (Lab)]

13. What assessment he has made of the potential effect on levels of local authority service delivery of the removal of deprivation measures from the local government funding formula.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

The Government have consulted on changes to the local authority funding formula and have heard from over 300 bodies. We are in the process of digesting those responses and will of course listen carefully to what the sector has said.

[Imran Hussain]

I am somewhat astonished that the Secretary of State and the Minister can stand at the Dispatch Box and keep a straight face while downplaying local government cuts. My local authority, Bradford Council, has been decimated by nine years of Tory austerity, which has stripped vital services of funding and dragged hundreds of our children into poverty. Does the Minister really think that cutting funding further and devasting our communities is an example of fair funding?

[Rishi Sunak]

As I have already said, funding in aggregate for local authorities has gone up, but it is worth bearing in mind too that funding for the hon. Gentleman’s local authority is up this year. I have noticed also that its spending power per household is higher than the average for metropolitan districts. Indeed, in Bradford’s latest accounts it boasts of the area having

“Better skills, more good jobs and a growing economy”.

This Government are backing local councils to deliver for their local communities and will continue to do so.

[Graham P. Jones (Hyndburn) (Lab)]

When will the Government review the empty homes premium, a hypothecated tax that is unfairly distributed between deprived precepting boroughs and shires? Hyndburn is about the 24th most deprived area in the country and collects about £600,000, the majority of which is given to wider Lancashire to spend, not the deprived area. This is totally unfair. Does the Minister recognise it as unfair and will he do anything about it?

[Rishi Sunak]

I am happy to talk to the hon. Gentleman about his specific concern, but in general it is for local authorities themselves to decide how to implement the empty homes premium. They are accountable to their electors, and this is not something that central Government have any execution over.

--- Later in debate ---

[Helen Hayes (Dulwich and West Norwood) (Lab)]

There is a £3.1 billion gap in funding for children’s services and a £4.3 billion gap in funding for adult social care, but, eight months before the start of the new financial year, local authorities have no idea what their funding settlement will be for the coming financial year or beyond it. What is the Secretary of State doing to address this crisis in local government funding, which is affecting the most vulnerable residents in communities up and down the country every single day? Why is he being so complacent?

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

Far from being complacent, the Government are working hard to ensure that local authorities receive the support that they need, as we heard from my hon. Friend the Member for North West Leicestershire (Andrew Bridgen). We know about the importance of children’s services, and the importance of ensuring that all authorities benefit from best practice from places such as Leeds, Hertfordshire and North Yorkshire. We are funding those authorities so that they can spread that best practice throughout the country, transforming the lives of children everywhere.

[Sir Peter Bottomley (Worthing West) (Con)]

I do not want to assume that Ministers have seen the letter that was sent to the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) and me today by the director general for housing about the chairman of the Leasehold Knowledge Partnership and LEASE, the Leasehold Advisory Service. It deals with one issue satisfactorily. May I ask Ministers to see whether the alleged social media comments that pose a difficulty can be sent to the chairman of the all-party parliamentary group on leasehold and commonhold reform to establish whether he can overcome the second difficulty?

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Representatives of nearly 50% of children’s services have said that they no longer feel able to keep children safe. Recent research has shown that private fostering, children’s homes and social worker agencies have amassed an estimated annual profit of £220 million, while simultaneously costing local authorities £20 million. At what point will the Government put the needs of vulnerable children before private profit?

[Rishi Sunak]

It is for local authorities to decide how best to conduct children’s services in their areas, and it would not be right for me to stand at the Dispatch Box and tell them exactly how to contract. I will say this, however. When it comes to protecting the most vulnerable children in our society, the Government have ensured, through the troubled families programme, that hundreds of thousands of the most vulnerable families are receiving the targeted, intensive support they need so that their children can be kept out of care and they can stay strong together.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The crisis in adult social care is likely to become worse as it becomes harder to recruit staff from the European economic area to work in that sector post Brexit. What discussions has the Secretary of State had with the Home Office to ensure that the sector has access to the long-term labour supply that it will need?

Ministry of Housing, Communities and Local Government

Rishi Sunak Excerpts

1st reading: House of Commons
Tuesday 2nd July 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a great pleasure to conclude this debate, which I agree with the hon. Member for Denton and Reddish (Andrew Gwynne) has been very thoughtful. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on opening it and thank the Backbench Business Committee for securing time for us to discuss a subject that is close to my heart. She can rest assured that the latest report of the Public Accounts Committee on local government sustainability is bedtime reading for me; I have it with me at all times. I thank all hon. Members who contributed to the debate.

We are all here because we value and recognise the invaluable work conducted by councils up and down the country. I join all hon. Members on both sides of the House in paying tribute to our hard-working councillors, and I thank them for everything they do for our local communities. Let me also take this opportunity, on the first day of the Local Government Association conference, to thank the noble Lord Porter for his tenure as chairman of the LGA. He is a genuine giant in the world of local government, he has been a strong champion for the sector, he is respected across the spectrum, and I know he will be sorely missed.

Shortly after I became local government Minister, Lord Porter’s successor, Councillor Jamieson—whom I wish every success too—handed me a document that contained an incredible statistic. He had calculated that councils provide an amazing 800 different services. They really do touch every aspect of our lives as citizens. We heard about a range of those services today.

I will try my best to answer as many of the queries that were raised as possible. Many of them relate to areas that are not my direct responsibility but that of our fantastic Housing Minister. I am pleased to say that he has been here for most of the debate and has heard and absorbed all those queries. With his tagline “more, better, faster”, I know he is relentlessly committed to ensuring that everyone has a safe, decent and affordable home to call their own.

As I reflected on those 800 different services from where I stood, I came to see that there were three major, overarching areas for which councils have responsibility: driving economic growth; helping the most vulnerable in our society; and building strong communities that we are all proud to call home. I am pleased to say that this Government are supporting councils to do all three.

Before addressing the various points that were made in the debate through the prism of those three areas, I want to acknowledge that, of course, local government has been through a challenging period financially. I do not disagree with that; it would be wrong to do so. I agree that the balance of spending has shifted from non-statutory services to statutory services, and it is right that that is addressed in the upcoming spending review. Members can rest assured that, working with Departments such as the Department for Education and the Department of Health and Social Care, we are providing an evidence-based and robust account to the Treasury to inform those spending review conversations.

It is important to note why local government was put in that position. As my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) pointed out excellently, it is incumbent on all Governments to balance the books. The task this Government inherited was significant. As my hon. Friend the Member for Redditch (Rachel Maclean) pointed out, local government had a difficult set of circumstances to deal with. It made some difficult decisions and did extremely well. I join my right hon. Friend the Member for Witham (Priti Patel) in saluting not just her husband but the entrepreneurship of all local councillors up and down the country in responding to that climate. They truly have done us proud.

I agree with the hon. Member for Oxford West and Abingdon that at this point we should look forward, and I am pleased to say that the tide is turning. This year, local councils will have access to over £46 billion in core spending power. That represents not a cut or a fall, but a 3% cash increase on the funds available last year, and a real-terms increase in money available to councils to spend on services.

We heard from Opposition Members about the burden of council tax. The Government and this side of the House will always be on the side of hard-pressed taxpayers, and determined to keep council tax as low as possible. Since the coalition Government came into power in 2010, council tax has risen at an average of just over 2% per annum. We can all remember that under the last Labour Government council tax doubled, going up at a rate of more than 6% every year. Our residents need to know one thing: if they are focused on low council tax and better services, it is a Conservative Government that will deliver them.

A recurring theme in the debate—it was raised by my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), the hon. Member for Oxford West and Abingdon, and the Chair of the Select Committee—was governance. They were right to raise that issue. Like me, the hon. Lady was not here during the coalition Government, but they decided to abolish the Audit Commission and replace it with a more decentralised framework for oversight and accountability. The Secretary of State confirmed at the LGA today that the Department plans to enhance its role in oversight and leadership of the local authority governance system. His aim is to be able to spot problems more easily and sooner, to support councils and to protect our residents. The Secretary of State is committed to outlining to the Public Accounts Committee by the end of the year the specific steps that he will take in that regard. I know that that is something that many hon. Members have raised today and I hope they will be reassured by that. In conjunction with that work, the Secretary of State has committed to a review of the local audit framework. Again, he will report soon to the Public Accounts Committee on how that should be achieved.

My first theme is economic growth. The money that funds our public services has to come from somewhere, and the only sustainable way to generate those funds is to drive economic growth. Councils play a critical role in that, incentivised and supported by central Government. Our business rates retention scheme means that every authority in England stands to reap the rewards of increased growth in business rates income and will be able to use those rewards to invest in their local economy and community. Through business rates retention, councils now have access to nearly £2.5 billion in additional funds, on top of their core spending power, to fund local services.

Our successful 75% business rates retention pilots were incredibly popular, and 14 pilots are now in operation, benefiting over 100 different local authorities. My hon. Friend the Member for North East Derbyshire (Lee Rowley) reminded us of the importance of all councillors embarking on a journey of efficiency to ensure that their taxpayers’ money is spent incredibly well. Where we can find those efficiencies, we absolutely should.

The Government are championing authorities that are putting digital innovation at the heart of their service delivery and transformation and efficiency programmes. That has the potential to be hugely significant, which is why our new digital declaration is so important, and that ambition is backed by a £7.5 million local digital innovation fund. That is funding projects that have the potential to save money and transform services on the ground. The programme is also providing digital leadership training for hundreds of senior councillors and officers up and down the country, building the local government leaders of tomorrow.

I turn next to councils’ crucial role in helping the most vulnerable in society, and again the Government’s record is strong. We fully back councils that are on the frontline in helping those in need, supporting children, the disabled and the elderly.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

My hon. Friend has referred to the role of councils in protecting the vulnerable. Does he also recognise that since health-visiting services were passed to them, the number of health visitors has fallen by more than 2,000 nationally—which is not helping young people to get a good start in life—and addiction services have been massively reduced, which means that deaths from alcohol and morbidity from alcohol-related diseases are on the rise? Will he please undertake to review the basis of the commissioning of those services and consider returning them to the NHS, where they belong?

[Rishi Sunak]

I am not sure I agree with my hon. Friend that it would be right for public health responsibility to be returned to the NHS. Local government does not believe that it is right, and since local government has taken on ownership of public health, all the outcomes that I have seen have improved and been delivered more effectively. The Secretary of State recently commented on that. I appreciate the hon. Gentleman’s broader point, and of course it is important for delivery to be carried out well, but I think that the track record is in local government’s favour thus far.

[Mr Betts]

I take a different point of view. When public health was the responsibility of the NHS, the money was kept within the NHS budget, and increased each year in line with NHS funding. Since the transfer to local government, the funds have been cut substantially in real terms. Let us return public health funding to a level at which local government will really deliver.

[Rishi Sunak]

I think we are talking about two different issues. One is the issue of who is responsible for delivering public health, and I am strongly in favour of local government’s continuing responsibility. As for the budget, the Chairman of the Select Committee will know that it is ring-fenced. As that is rolled into business rates retention, it is of course right for there to be a proper governance and assurance mechanism.

The most recent Budget provided £650 million in new funding to help councils respond to pressure on both children’s and adults’ social care, and we have heard much about that today. It comes on top of the billions of pounds of extra funding in previous Budgets for adult social care, and it is starting to make an enormous difference on the ground. The number of delayed transfers of care has fallen by 50% since the peak, and 93% of councils agree that joined-up working with the NHS through the Better Care Fund is improving outcomes.

The hon. Member for Stoke-on-Trent Central (Gareth Snell) set a good challenge for Governments to follow when he spoke of place-based funding. The improved Better Care fund is just one aspect, but we should clearly aim to do more in that direction, pooling budgets locally among different agencies when it makes sense. Manchester is the most evolved model in that regard, and I have enjoyed getting to know the team there and seeing the results that its work is having.

My hon. Friends the Members for Thirsk and Malton (Kevin Hollinrake) and for Redditch (Rachel Maclean) talked about the importance of a long-term solution. That is not my remit, but I hope that the Secretary of State is giving good consideration to the joint work of the two Select Committees on a social insurance model. The hon. Member for York Central (Rachael Maskell) reminded us that prevention is better than cure, and I fully agree with her.

I am very proud of the work that our Department has done in leading the highly successful troubled families programme, which has supported more than 400,000 families through an innovative early intervention model utilising a key worker and a whole-family approach. The results have been excellent. Children have been saved from going into care, people are coming off benefits and going into work, and crime and antisocial behaviour have been reduced. Ultimately, families are becoming stronger. It is a privilege to meet the people who are executing the programme on the ground, and those visits are some of the most humbling that I make. I know that that programme, and those workers, are making an enormous difference to the lives of some of our most vulnerable citizens.

Finally, let me touch on the work of councils in supporting strong communities. I agree with my hon. Friend the Member for Redditch about that. The Government see it as a critical task, and we are helping councils to build cohesive, safe and local communities up and down the country—places that we are proud to call home. We have provided additional funds to enable councils to build cohesion in areas on which migration has had a particular impact.

We have worked with my hon. Friends the Members for Redditch and for Stoke-on-Trent South (Jack Brereton) to come up with various support schemes for the high streets, which are now worth more than £1.5 billion. We have helped councils to make improvements to local roads—the essential arteries of our community life—with a £420 million fund to deal with potholes. We have provided new money for parks and green spaces, which has brought about the creation of more than 200 “pocket parks”. Those little havens of greenery make all the difference to the community, especially in the more deprived areas.

Just those few examples demonstrate the breadth and depth of our commitment to helping local government to build vibrant and cohesive communities in the places that they serve. Whether they are driving economic growth, caring for the most vulnerable in society or building stronger communities, local councils across the country do an amazing job. That is what makes it such a privilege for me to have this role, and to champion local government in Whitehall and in Westminster. Local government deserves our backing, local government is getting our backing, and I commend the estimates to the House.

Question deferred (Standing Order No. 54)

Non-Domestic Rating (Lists) Bill (Second sitting)

Rishi Sunak Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 25th June 2019 Public Bill Committees

[The Chair]

Welcome to line-by-line consideration of the Bill, on which we held an evidence session this morning. As in the main Chamber, the usual rules of debate and behaviour apply, as I am sure you all know very well. No amendments have been tabled, so we will consider merely whether each of the four clauses should stand part of the Bill. However, I intend to take all four clauses together for debate, so we will have only one debate.

Clause 1

Compilation of rating lists

Question proposed, That the clause stand part of the Bill.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Gray. I hope not to detain the Committee for more than a few minutes.

I hope that by now the Committee is familiar with the three specific improvements the Bill will make to the business rates system: first, it will move the next revaluation in England and Wales to 1 April 2021; secondly, it will move the cycle for revaluations in England thereafter from every five years to every three years; and, thirdly, it will move the latest date by which draft rateable values must be prepared in England and Wales to the 31 December preceding the revaluation. I am glad to say that those substantive changes can all be found in clause 1.

To understand clause 1, we need first to consider the main primary legislation for business rates: the Local Government Finance Act 1988. Part III of the Act concerns business rates; it currently requires revaluations in England and Wales to take place every five years from 1 April 2017. Clause 1 is concerned entirely with amendments to that Act, and specifically to section 41(2A), which provides for revaluations of local rating lists in England

“on 1 April 2017 and on 1 April in every fifth year afterwards”;

to section 52(2A), which does the same for central rating lists in England; and to sections 54A(4)(b) and 54A(5)(b), which provide for revaluations of local and central rating lists in Wales on a date specified by the Welsh Government by order—1 April 2017—and

“on 1 April in every fifth year afterwards.”

That shows in black and white the delivery of our commitment to make the rating system more responsive to changes in the property market and fairer for ratepayers, and to ensure that businesses see those benefits as soon as possible.

Sections 41(5) and 52(5) of the 1988 Act set out the deadline by which draft rateable values must be provided before the revaluation. That is currently set at no later than 30 September. Clauses 1(3) and 1(6) of the Bill move the deadline to no later than 31 December. It is important to remember that that is only a deadline—it is the latest date by which draft rateable values must be prepared. The Welsh Government agree that the deadline for the draft list should be changed to 31 December. Sections 41(5) and 52(5) of the 1988 Act apply to both England and Wales, so the amendments made by clauses 1(3) and 1(6) will automatically change that date in both countries.

Clause 2 will make purely consequential amendments to primary and secondary legislation. The sections of the 1988 Act that concern the transitional arrangements made at the time of each revaluation, and the regulations made under those powers in England, reflect the existing five-year cycle of rating lists. Clause 2 will therefore amend those references to bring them in line with the new cycle of rating lists in England and Wales. It will make no other changes to the powers in those sections.

Clauses 3 and 4 are, I hope, self-explanatory. As is normal practice, the Bill will come into force two months after it is passed. It will give the valuation office the legal basis it needs to complete the valuation exercise for a revaluation in 2021. Since it has already started work on those valuations under the existing legislation and will continue that work over the coming months, there is no need to shorten the normal two-month commencement period.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

This morning, though brief and focused, we heard from representatives of the Association of Convenience Stores, the Federation of Small Businesses, the British Retail Consortium, the Confederation of British Industry, the Local Government Association, and the Chartered Institute of Public Finance and Accountancy. We place on record our thanks for the time they took to give evidence to the Committee.

The scope of the Bill is narrow, and that was reflected in the discussion we had. However, some themes came out during that session that are worth repeating. Clause 1 brings forward the new ratings list by a year, to 2021—a move that we welcome and that was welcomed by all those who gave evidence earlier today. There were calls for annual reviews, but given the concerns about capacity in the Valuation Office Agency, evolution might be more advisable, which is why we support bringing the new list forward by one year.

One element that was queried by the Local Government Association was the change from six to three months’ notice to billing authorities of the new list, pushing the deadline from “not later than September” to December. That change will hit many local authorities, as they will be presenting—or, in many cases, would intend to have already presented—their budget proposals to council. That is important because, as employers, councils have to meet their statutory obligations to their employees for any changes that might follow, whether for redundancies or any structural changes within the organisation. It is important that councils can meet the January deadline for that, so the notice period is important. I therefore ask that the Minister meets representatives of the LGA as a matter of urgency to address their concerns and decide whether something can be done to minimise the impact of that change.

Clause 2 addresses transitional relief and brings it in line with the new list proposals. There was a broader discussion, which I do not intend to pad out here, about business rates and their impact on the retail sector, the viability of businesses and the future of high streets and town centres. We share the concerns about those issues and would welcome further discussions to create a business rates system that is not only fairer but helps British businesses and industry to thrive in future, rather than—as business rates do at the moment—simply acting as a tax to occupy or exist. There are growing calls for change, and I hope they are heard and acted on by the Government beyond the scope of this Bill.

[Rishi Sunak]

I thank the hon. Gentleman for his typically thoughtful comments and join him in thanking all the witnesses we were lucky to hear from this morning.

During this morning’s session, I was pleased that there was widespread support for the principle of the Bill, namely shortening the revaluation cycle to make business rates more responsive to economic conditions. It felt like all participants agreed that three years was the right place to end up, striking an appropriate balance between responsiveness on the one hand and providing some certainty and stability for ratepayers on the other.

I am pleased to tell the hon. Gentleman that my team is already in discussions with the LGA and will continue to be so. It is also in discussions with CIPFA, which participates in a technical working group on business rates and business rate reform to ensure that the process for local authorities submitting their NNDR1 forms by the end of January is not unduly impacted by the change. As in the past, we have been able to work constructively with local government and CIPFA to ensure all the processes that need to happen for revaluation work for the sector, ratepayers and everyone else involved.

To the hon. Gentleman’s last point, and without wanting to stretch the scope of the Bill, I understand what he says. I am glad he recognises the contribution of business to our economy and society—not least providing employment and the funds we need for our public services. We will always be keen to do what we can to support business. With regard to business rates, £13 billion of various reforms have already been enacted by the Government—most recently the retail relief scheme, which provides a third discount to retail high street stores on their business rates bill and has been warmly welcomed. The Government will continue to watch that issue closely.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

Bill to be reported, without amendment.

Non-Domestic Rating (Lists) Bill (First sitting)

Rishi Sunak Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 25th June 2019 Public Bill Committees

[The Chair]

Thank you. Does anyone want to ask a question? No. Would the Minister like to kick us off?

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I am happy to come in at the end. Perhaps the Opposition spokesperson would like to start.

[The Chair]

Okay. I call Jim McMahon.

--- Later in debate ---

[The Chair]

Do any other Members want to ask a question within the scope of the Bill? No. I call the Minister.

[Rishi Sunak]

Q Thank you, Chair, and thank you to all the panel members for joining us today. I appreciate that there is a lot of interest in the broader topic of business rates, the structure of business rates taxation, the current plight of the high street, the rise in online shopping andEdward Woodall: Broadly, we are very supportive of the move to shorter revaluation periods. There is overall agreement that the principle of making revaluations shorter to make property costs more closely aligned with what they are today should be the overall ambition. We have come to a three-year window on the basis that it balances the capacity of the VOA to deliver a revaluation in that time period and that it shortens the current five years. It is worth reflecting that, at one point in 2016, properties were valued based on 2008 data. We want to try to avoid that in future. The principle is very positive in the context of an evolving economy and the evolving way that we use property, and we should try to look more closely at how quickly we can revalue these things.

Martin McTague: In principle, yes, we support the move to the three-year revaluation period. We see it as a compromise, because we know it will put a lot of pressure on the VOA. We are concerned that, if pressure is put on the VOA, it might start to transfer to billing authorities. The person who usually ends up getting the bill to pay is the small business at the foot of that process. We are very disappointed in the way that check, challenge, appeal is working and that it is, effectively, creating a system that lacks transparency. The ratepayer cannot see the basis on which they are rated, which means that when they try to challenge any of these things, the delay can be enormous. We think that the fundamentals of the process are still wrong, but the move to three years is a good one.

Dominic Curran: At the risk of having an outbreak of agreement, we also fully support a move to three-year valuations. Five years was too long; I know many call for annual revaluations. There is a spectrum of views among our membership, but we have settled on three years as the right balance, taking into account two factors. First is the balance of stability: for every three years, you know exactly what your rates bill is. Even if that is not perfect, at least you can work on that basis. Second is the capacity of the Valuation Office Agency; as Martin said, we are not convinced that it would necessarily have the resource or capacity to undertake yearly or two-yearly valuations. That is an important area of resource that should be looked at carefully by the Treasury in the upcoming spending review.

[Rishi Sunak]

Thank you.

[Jim McMahon]

Q To follow up on that point, when the revaluation is brought forward, that will not dispense with the appeals already in the system—they are still there and need to be administered—and it will just create the opportunity for further appeals. Have your members expressed any concern about the capacity in the valuation office? Do you have any concerns about what it might mean if no additional capacity is brought in and there is a more recent revaluation in 2021?

Martin McTague: I can certainly answer that. There is widespread concern about the lack of capacity in the VOA. It is bizarre that the solution seems to be that you impose a six-month cap on appeals. That is effectively saying, “It’s so difficult to get these appeals through the process that we are going to cap the time required to do it.” Yet the information is not available to the business rate payer to be able to challenge things easily. The point that you made at the beginning—that the VOA is fundamentally under-resourced to deal with this change—needs to be addressed quickly.

Edward Woodall: I agree with Martin. The feedback I get from my members is that there is a lack of capacity at the VOA to allow them to engage meaningfully in the process and talk to individuals. There is also a challenge, which we will probably come to, about the structure of the process it has developed—check, challenge, appeal—and people’s ability to interact with that, which is causing difficulties.

Dominic Curran: Absolutely. Our members are enormously frustrated with the VOA on a day-to-day basis. The appeal system is clogged up at best. It needs better resourcing. There certainly should not be a cap on appeals, in terms of the time length. But more frequent revaluations would, to an extent, reduce the need for appeals, because valuations would be less out of date, although they would probably still be somewhat out of date.

[Rishi Sunak]

Q A final quick question, Mr Curran. One of the things that the VOA has to do at the moment is to deal with appeals. You just made the point that more frequent revaluations ought to reduce the volume of appeals. Will you elaborate on that point, because, obviously, less appeal work would be an offset to the increased work of more frequent revaluations?

Dominic Curran: The argument is strongest if we were to move to a system of annual revaluations. With an annual revaluation, it almost would not be worth appealing a valuation that you thought was wrong, because it would change in a year’s time anyway. The other effect would be that the valuation probably would not be so wrong, because your annual changes would be on a much smoother line—looking at it on a graph—whereas if we revalue every seven years, as we have, you get quite a steep change. Obviously, somewhere between seven years and one year, the line gets smoother and smoother. It is a question of judgment which number we pick. Using that logic, three years should have fewer appeals than five or seven, but one year should have fewer than three. We will see how good the VOA is at dealing with three-yearly revaluations.

[Rishi Sunak]

Thank you.

[The Chair]

As there are no further questions from Members, I thank the panel for their evidence. Thank you so much for coming along.

We are running ahead of time, and the other panel has not arrived, so I propose that we suspend.

--- Later in debate ---

[The Chair]

Okay. We have time for more questions. I will ask the Minister if he has any questions, but if people suddenly, spontaneously, have questions, I will allow some more within the timeframe, if necessary.

[Rishi Sunak]

I am fine, thanks. Thank you for all coming, and thanks for your evidence and comments. Everything has been perfectly well answered.

[The Chair]

So you have no questions?

[Rishi Sunak]

No.

[Jim McMahon]

Q May I ask one question of Richard? Is the LGA making a specific request that the change of date from September to December be reviewed as part of this process?

Councillor Watts: We are, yes. In effect, our request is that we would welcome further conversations with the Government about getting a date. We understand the arguments for shifting it, because it is quite a long time and 30 September is quite early in the process. However, for one year out of three when that impacts on the potential local government announcement, we would like to understand more about how the Government would like to co-ordinate between this announcement in December and the local government spending announcement having to be earlier than it, because that is a change in precedent. We cannot push the local government spending announcement each year beyond 31 December—it is already too late where it is, given that local budget setting for any authority of size is effectively always concluded before the spending settlement on the basis of guesswork, then tweaked when the settlement is announced in the House.

Non-Domestic Rating (Lists) Bill

Rishi Sunak Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 17th June 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move, That the Bill be now read a Second time.

This Bill makes a major improvement to the rating system that delivers on Government commitments and addresses ratepayers’ concerns. It will ensure that business rates bills will be updated at more frequent revaluations to reflect changes to the rental property market. In doing so, it will ensure that business rates become more responsive to economic changes.

Business representatives such as the CBI, the British Property Federation and the British Chambers of Commerce have all asked for more frequent revaluations. They were promised that by the Chancellor at autumn Budget 2017 and again at the 2018 spring statement. This Bill delivers on those promises.

Business rates bills are based on the rateable value of the property, which, broadly speaking, represents its annual rental value. The rateable value is therefore the tax base for business rates and it is assessed by the Valuation Office Agency, independently of Ministers.

Since the current system of business rates was introduced in 1990, the Government have had regular revaluations of rateable values, to ensure that they remain up to date. These revaluations ensure that the amount paid in business rates—money used to fund important local services—is distributed fairly among all ratepayers, having regard to their rental value.

Regular revaluations are an important part of maintaining fairness in the system, but the Government must strike a balance between the uncertainty created by regular revaluations—because it is inevitable that rate bills will change at that time—and the stability of businesses being able to plan for the future.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Minister just made an important point about the fact that revaluations are there to ensure fairness in the system. On that basis, does not council tax completely fail the test? If the Minister really wanted to go down in history, would it not be more appropriate to have a non-domestic rating and council tax valuation Bill?

[Rishi Sunak]

I am not sure I would like to go down in history as the man who revalued people’s homes to tax them more. The Chair of the Select Committee on Housing, Communities and Local Government makes a fair point, but the difference is that the statutory basis for business rates requires that the overall revenue raised remains neutral in real terms, taking account of appeals and increases, so it is necessary to ensure that that happens in practice. As a result of doing that every five years since 1990, the Government have enacted a revaluation.

Following the 2010 revaluation, and in the face of the economic downturn, the planned 2015 revaluation was postponed to 2017. That reflected the need at that difficult time to give businesses more certainty. Quite rightly, however, it also led to renewed interest in business as to how often we should in the future revalue for business rates.

[Bob Blackman (Harrow East) (Con)]

I will not be as mischievous as the Chairman of the Select Committee, but there is an issue that needs to be dealt with. Various Treasury and Ministry of Housing, Communities and Local Government reforms have resulted in many reliefs and opportunities for people to run small businesses without having to pay any business rates at all. Is it not time for a fundamental review of business taxation, to make it fair and reasonable and to ensure that those people who operate online also pay their fair share of business taxation, rather than relying on those businesses that happen to be in situ?

[Rishi Sunak]

I feel like I am being pincered by the illustrious senior members of the Select Committee. Of course, the issue of business rates vexes many people, but my hon. Friend is right to point out that, because of the various reliefs enacted by this Government, it is the case that fully one third of all businesses pay no business rates at all, and that is to be welcomed.

Notwithstanding the fact that I would be straying far from my brief and treading on the Chancellor’s toes if I addressed the broader structure of business rates taxation, it is worth saying that when the Treasury last looked at the issue a few years ago, there was no consensus among the business community about what might replace it. On digital taxes in general, although it is not quite the same, the digital services tax mooted by the Chancellor goes in part towards addressing the issue raised by my hon. Friend.

To return to the Bill, the response of businesses to the consultations and engagements was very clear: they thought that the revaluation cycle should be shortened, and the most popular option emerged as three years. Therefore, this Bill makes three changes to the rating system in England.

First, the Bill will bring forward the date from which the next revaluation takes effect, from 1 April 2022 to 1 April 2021. Secondly, the Bill will ensure that, thereafter, revaluations will take effect every three years, so the next revaluation after that will be in 2024, and so on. Thirdly, the Bill will change the last date by which draft rateable values must be published in the lead-up to the revaluation, from the preceding 30 September to 31 December. That period, during which new rateable values are published before the list comes into force, is known as the draft rating list.

Business rates is a devolved policy area, but the Bill also applies in part to Wales. As in England, the next revaluation in Wales will be brought forward to 1 April 2021. I understand that the Welsh Government are considering options for the frequency and nature of revaluations thereafter, so the requirement for three-yearly revaluations does not yet apply in Wales. Entirely different legislation applies in Scotland and Northern Ireland, but I understand that both countries are committed to having more frequent revaluations.

Hon. Members who have been following the proceedings of the Select Committee on the Treasury inquiry into the impact of business rates will have seen a range of business groups support the move to more frequent revaluations. I will end with a quote from the evidence provided by the Association of Convenience Stores:

“More frequent revaluations will allow rateable values to link more closely with the non-domestic property market and three-yearly revaluations strike the balance between VOA resource and accuracy for business.”

In conclusion, I am very glad to be able to make this improvement to the rating system, and I commend the Bill to the House.

Oral Answers to Questions

Rishi Sunak Excerpts

Monday 17th June 2019 Commons Chamber

[Tom Pursglove (Corby) (Con)]

4. What assessment he has made of progress on the unitarisation of local government in Northamptonshire.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

The Secretary of State recently announced his intention to implement the reorganisation plan submitted by the Northamptonshire councils. Subject to parliamentary approval, the new unitary authority will be in place in April 2021. I place on the record my thanks to the councils for their continuing constructive attitude towards ensuring that their residents will have better local government.

[Tom Pursglove]

I thank the Minister for that answer and share his sentiment about the local authorities’ constructive work. What steps will his Department take to ensure that future decision making is at the heart of the new model and happens at the most local level possible, with strong area representation reflecting the different communities of north Northamptonshire?

[Rishi Sunak]

My hon. Friend is absolutely right to highlight the importance of local decision making happening as close to people as possible. We expect new unitary authorities to support the creation of new parishes as part of this reorganisation, which has happened elsewhere, and we also encourage the formation of area committees to ensure strong local representation. My hon. Friend is absolutely right that local people must have a strong voice in the decisions that affect their communities.

[Stephen Kerr (Stirling) (Con)]

5. What plans the Government have to ensure that Scottish towns benefit from the stronger towns fund.

--- Later in debate ---

[Mary Glindon (North Tyneside) (Lab)]

7. What recent discussions he has had with the Chancellor of the Exchequer on the level of funding for local government.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

The Secretary of State and I both meet our counterparts at the Treasury regularly. Future funding for local government will, of course, be decided in the spending review, and the hon. Lady can rest assured that we will be making a robust case.

[Mary Glindon]

Since 2010, North Tyneside Council has lost £120-million worth of Government funding and, like many other councils, has had to cut frontline services to the marrow, not just to the bone. With the Chancellor admitting that he does not have a clue about the state of regional economies, can this House be confident that the Minister will make him fully aware of how bad things are for local councils?

[Rishi Sunak]

The Chancellor and my Department have already responded with an extra £1 billion to improve resources for local government. The hon. Lady may not believe me when I say that we are supporting local government, but perhaps she might listen to her own local authority. This weekend I glanced through the council’s plan, which shows that inequality between the least and most affluent areas is narrowing, that according to feedback from residents 80% of local people are highly satisfied with where they live, and that an increased proportion of residents think their local area has improved.

[Mr Speaker]

We note the Minister’s choice of weekend reading: the capital plan. I hope he found it stimulating or in some way therapeutic. I am sure we will hear his impressions on that matter in due course.

[Alison McGovern (Wirral South) (Lab)]

Given the importance of the need to demonstrate the effectiveness of spending through local government, will the Minister tell us when we will see the results of the successful bidders for the future high street fund?

[Rishi Sunak]

Successive rounds of bidding are currently in process. I can write to the hon. Lady with an exact date, if one is available from my hon. Friend the high streets Minister. More broadly, the hon. Lady is absolutely right about the need to measure the effectiveness of what local government does. In particular, the troubled families programme, with its extensive evaluation, provides great evidence to everyone in the House on the valuable early years prevention work that local councils do.

[Mr Speaker]

We all know that the Minister is an industrious fellow—I am sorry to dwell on this—but I sincerely hope that he was not reading the capital plan on Father’s day. Surely not. I am sure he must have read it on Friday or Saturday, not on Sunday.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

Following the meeting I had with my hon. Friend, we were pleased to facilitate meetings for the chief executives of the various councils and health bodies with officials from the Department of Health and Social Care and my Department. Those conversations have been very constructive, and I am pleased to tell my hon. Friend that the Social Care Minister and I would both be delighted to meet him and other MPs once the proposals have been fleshed out in detail.

[Mr Hollobone]

I declare my interest as a member of Kettering Borough Council. There are still far too many patients in Kettering General Hospital and Northampton General Hospital who are classified as delayed transfers of care. They are mainly elderly patients whose medical treatment has been completed, but who face delays being put into the social care system. Does my hon. Friend agree that the reorganisation of local government in Northamptonshire presents a wonderful opportunity to create a social care and health pilot to combine these two services?

[Rishi Sunak]

My hon. Friend is spot on. Delayed transfers of care undermine patients’ dignity while putting pressure on beds and costing the taxpayer money. Although we have seen fantastic progress nationally with delayed transfers of care halving since the peak, Northamptonshire is obviously not in that place. My hon. Friend is absolutely right to highlight the opportunity that greater integrated care could bring, and we are delighted to work with him and others to make that a reality.

[Mr Speaker]

I call Gordon Henderson. Not here.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

17. What recent assessment he has made of the adequacy of the funding for adult social care.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

The Government recognise the pressures faced by adult social services and have provided councils with an additional £10 billion in dedicated funding for adult social care in the three years leading up to 2019-20. Of course, the future level of funding will be settled in the spending review.

[Bridget Phillipson]

Councils are already struggling to meet the overwhelming demand and pressure to fund adult social care, to the extent that there will soon be little money left to pay for anything else. Demand is only going to increase and the need for reform is urgent, but after nine years of inertia can we ever expect this Government to get to grips with the growing crisis we face in adult social care?

[Rishi Sunak]

It is absolutely the case that the Government are gripping the pressures in social care—not only with £1 billion in extra funding at the recent Budget but, as we have recently heard, with greater integration of care between the NHS and social care. This is delivering real benefits on the ground, with a reduction in half of the delayed transfers of care showing enormous promise for what is possible in the future.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I am not quite sure where the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) was, but a number of Tory leadership contenders were queuing up on last night’s TV debate to pledge their loyalty to adult social care and their desire to see it properly funded. Now that there is a queue of Conservatives who are finally waking up to the adult social care crisis facing this country, what assessment does the Minister make of the amount of money needed to plug the gap?

[Rishi Sunak]

We are doing that work with our colleagues in the Department of Health as we speak, to ensure an accurate reflection of the pressures as we go into the spending review. Those pressures are real; everyone acknowledges that there is an ageing demographic at the top end of social care, but working-age adults now account for half of the budget. It is right that we get the demographics right and that we go into the spending review with a robust case for the amount of funding that social care requires.

[Mr Speaker]

I call Clive Lewis. Not here—a second absentee. I hope these characters are not indisposed. We look forward to seeing them again erelong. The important point is that Yvonne Fovargue is here.

--- Later in debate ---

[Yvonne Fovargue (Makerfield) (Lab)]

T5. Council tax arrears are a growing problem. In 2018, an estimated 2.2 million households were in arrears, and in 2016-17, people paid an estimated £129 million in bailiff fees and court costs on top of the arrears. As part of the review into council tax collection, will the Minister commit to reviewing the Council Tax (Administration and Enforcement) Regulations 1992, to encourage councils to stop using liability orders and bailiffs?

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I thank the hon. Lady for highlighting our review. I am happy to look at all things as part of that review, but she is right to highlight that issue. We are keen to see what we can do to improve the collection process, while maintaining high collection rates to fund the public services that we rely on

[Mr Speaker]

I call Marcus Fysh. Where is the chappie? He was here earlier. He has beetled out of the Chamber prematurely, but he could have had another go.

Jewish Community: Contribution to the UK

Rishi Sunak Excerpts

Thursday 13th June 2019 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

As always, Sir David, it is a privilege and a pleasure to serve under your chairmanship. I thank the hon. Member for City of Chester (Christian Matheson) for securing this important debate and granting us the opportunity to reflect on the significant social, political, cultural and economic contributions that the Jewish community makes to our great United Kingdom. We must also pay thanks to the Jewish Leadership Council and Lord Levy for planting the seed of this debate.

I pay tribute to the hon. Gentleman for his first-rate opening speech. In a reasonably short time, he gave us an excellent overview of the full breadth and history of the Jewish community’s contribution to our country, and he should be commended for doing so with an incredibly positive and warm tone. I thank all other hon. Members who have participated in the debate; I will address the specific remarks made by the hon. Member for Stretford and Urmston (Kate Green) later in my speech.

I thank the hon. Member for Stoke-on-Trent North (Ruth Smeeth) for sharing her family story. I am glad that she did not take her grandmother’s advice, but has brought her ideas to this place. No one who has heard the hon. Lady speak on these issues, in this House or elsewhere, could fail to be struck by her force and passion. Our public discourse and debate in this place is the richer for her participation—and I am not sure that I will be able to look at tomatoes in the same way when I am at the supermarket this weekend.

I pay tribute to the right hon. Member for Wolverhampton South East (Mr McFadden) for his intelligent, thoughtful and powerful speech. He spoke not only with incredible bravery but with clarity and force—and without any notes, as far as I could tell. I look forward to re-reading his excellent speech.

Late in his life, the great writer and polemicist Christopher Hitchens discovered that his mother was Jewish and that, by extension, so was he. When he told his oldest friend, Martin Amis, Amis replied, “You know, I find I’m jealous.” How else could he feel, when the Jewish people have the one of the most enviable records of achievement of any demographic group in the United Kingdom’s history? Despite only ever forming a small percentage of the population, British Jews have shone in almost every field. They have inspired and entertained, created and innovated. They have become our doctors, our philosophers, our inventors, our musicians, our writers, our leaders, our role models, our parliamentarians and, indeed, one of our Prime Ministers.

It is only right that we celebrate the great achievements of the Jewish community, whose contributions have truly shaped our nation’s journey and identity. Before we do so, however, I must take note of the fact that a couple of hon. Members, including the right hon. Member for Wolverhampton South East, referred to ongoing incidents of prejudice, abuse and discrimination. It is deeply disappointing that that issue still arises in our society; it should be tackled unflinchingly where it occurs. Those who face such displays of bigotry should know that the British Government and everybody in this Chamber stand with them and support them.

I am always struck by the phenomenally strong community spirit that is shown by the Jewish community here in Britain. He will not thank me for saying it, and he did not insert it into my speech, but my private secretary, who is sitting a couple of rows behind me, is a shining example of that, as I discover whenever I glean what he has been up to in his weekend activity.

The community has social action at its heart. The very word for charity in Hebrew is derived from the word for justice. The biggest Jewish charity, Jewish Care, is one of the 100 largest charities in the UK. It provides care to more than 10,000 people a week and has 15 care homes, 13 community centres and four independent living communities. It is an inspiration to the rest of us, showing how much can be done within a community to support those in need.

Similarly, Norwood, which began in the 1700s as a hospital in the east end of London, has flourished and grown over the centuries to support people of all ages. It highlights just how generous the community is with its time and resources, with 500 volunteers and £12 million raised every year to maintain its amazing and precious programmes.

The community strives to look after the vulnerable—not only within it but in the wider world. The hon. Member for York Central (Rachael Maskell) gave the example of Mitzvah Day, when Jewish community groups and individuals up and down the country join forces with those of all faiths and none, volunteering their time to support those in need in their local community. That positive, collaborative social action is underpinned and inspired by the Jewish values of kindness, justice and shared responsibility. Last year, Mitzvah Day joined with Muslim Aid to launch a huge event to feed London’s homeless and vulnerable with that most famous of Jewish dishes—chicken soup.

The hon. Member for Stretford and Urmston spoke about the amazing work of World Jewish Relief, a charity founded by a small Jewish group in London in the 1930s. It now co-ordinates important relief efforts all over the world and helps people of all denominations; it has recently helped refugees in the Rohingya humanitarian crisis in Myanmar and cyclone victims in Mozambique. Of course, it would be remiss of me not to join other hon. Members in mentioning the invaluable role of the Community Security Trust, which seeks to ensure the safety and security of Jewish communities and other communities across the United Kingdom.

Finally, no summary of the Jewish contribution to British public life would be complete without mention of the Board of Deputies of British Jews, the national representative body of the UK’s Jewish community. As the longest-established religious minority in the UK, the Jewish people have led the way in demonstrating how to integrate fully and participate in our national life while retaining a distinct and proud identity, and that process has been led by the Board of Deputies. It has shown the way since 1760 in how to interact with the Government and fight for the rights of a group, while fostering good relations with those of other faiths and remaining perfectly integrated in wider society.

I will turn briefly from the community at large to the role of some individuals. It is no exaggeration at all to say that if I were merely to list every Jewish person who has achieved a record of note in UK society, we would be here for some weeks. However, I will give only a small sample, just a handful of those who have helped to shape our United Kingdom and what it is today. In the arts, I could mention Mike Leigh and Nicholas Hytner, Amy Winehouse and Yehudi Menuhin, Maureen Lipman and Sacha Baron Cohen; in academia, Simon Schama and Robert Winston; in the media, John Diamond and Jonathan Freedland; in art and design, Lucian Freud and Malcolm McLaren; Lord Neuberger, a President of the Supreme Court; Peter George Davis, the founder of the Special Boat Service; Jack Cohen, the founder of Tesco; and Ludwig Guttmann, the founder of the Paralympics.

I could mention many thousands of others who have founded the British businesses that we use every day and that provide employment for many, who have designed the technology that we use at work and at home, who have shaped the ideas that we follow, and who provide the entertainment we enjoy to rest and relax. I could speak for many hours, but in the interests of time we should press on.

I will end, therefore, by again thanking the hon. Member for City of Chester. He has done all of us a very valuable service. He has brought us together here today, to recognise, to celebrate and to be grateful for the invaluable contribution made by the Jewish community to the United Kingdom.

I stand here as someone who is the son of immigrants, and as someone who is proudly British, proudly Asian and proudly Hindu. I passionately believe that our society is richer for its diversity, and the Jewish community is a proud and shining testament to that.

Non-Domestic Rating (Preparation for Digital Services) Bill

Rishi Sunak Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons
Monday 20th May 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Dame Eleanor.

The Government have made significant reforms to the business rates system since our wide-ranging review in 2016. Responding to the needs of ratepayers, we are building a system fit for the 21st century. The tax system must keep pace with the way business operates today, and that means a modern, online system that makes it easier for businesses to manage their bills in one place.

Today’s measure is a small step towards that modern system for business rates. It will give Her Majesty’s Revenue and Customs the ability to carry out the early design work so that it can explore how a new system can be delivered. It does not implement or commit us to a particular approach, and the Government will work closely with local government and businesses when we come to develop detailed proposals. We need the Bill because HMRC’s statutory functions do not currently extend to the administration of business rates. As I have said, further primary legislation will be needed for HMRC to implement the outcomes of this work, so this House will have a further opportunity to look again at the project.

On the detail of the Bill’s clauses, HMRC’s functions are set out in primary legislation in the Commissioners for Revenue and Customs Act 2005. These functions relate to the collection and management of revenue, as set out in section 5 of the Act, and do not extend to the administration or payment of non-domestic rates. Clause 1 therefore provides HMRC with the ability to incur expenditure in connection with digital services to be provided by it for the purpose of facilitating the administration or payment of non-domestic rates in England. Subsections (2) and (3) define digital services and non-domestic rates respectively. Clause 2 sets out that the amendment will extend to England and Wales but apply only to England.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Dame Eleanor.

When we debated the Bill’s Second Reading last week, we were careful not to stray too far from what is a very narrow Bill. The benefit to the Minister was that he was able fill a speech by reading out the Bill. I shall not speak just for the sake of it; I shall cut straight to the chase.

I accept completely that this is enabling legislation to allow Her Majesty’s Revenue and Customs to develop the framework and the product offer, but there are still many outstanding questions that the Government need to answer at this stage, because they are fundamental to the approach that is being taken. For instance, will local councils retain their primary role as billing authorities? Who will underwrite the non-collection losses for businesses that opt to use the new digital system? How frequent will HMRC’s payments to local authorities be?

To what extent will local government be involved in the co-design of the system? As was pointed out on Second Reading, there is a great deal of expertise in our councils when it comes to designing systems and processes and bridging systems across different software products, and I think we can tap into that expertise to ensure that the system is fit for purpose. I am sure that the Minister does not want his CV to bear the legacy of an inadequate IT system, a fate that has befallen many Ministers who have gone before him in various Departments.

We want those fundamental questions to be answered, ideally before work starts and money is spent—and that brings me to my next point: we still do not know how much money will be spent. Oddly, a money motion was tabled but did not proceed to a Division, and there was no explanation even of the ballpark figure: not even a rough estimate of how much the new system might cost. The cost must be weighed against the benefits to HMRC and businesses, and it must be established whether we are getting value for money for the investment.

I must be careful not to stray too far from the subject of the debate, but the Bill does not address the underlying chronic underfunding of local public services. The Minister really must deal with the issue of the £8 billion funding gap, to which we have referred very often in the House.

We do not intend to divide the Committee, but if the Minister is not able to answer those questions today, it would be useful if, at the very least, Ministers could respond in writing.

[Rishi Sunak]

Let me deal briefly with the hon. Gentleman’s points. He asked some specific questions about the design of the system. As we established on Second Reading, I cannot give him the answers, not because I am trying to hide something but simply because I do not know them at this stage, and nor does anyone else. The Bill will enable HMRC to start its scoping work, and the questions that the hon. Gentleman rightly posed about the design, who will do what, and how intensive the work will be—or, indeed, how light-touch it might be—will be answered during subsequent analyses. Further primary legislation is likely to be required, so the House will have an opportunity to debate those changes.

On Second Reading, the hon. Gentleman raised an interesting point about the potential integration of the new challenge and appeal system with whatever new platform is designed. That point is worthy of consideration. Again, however, at this stage no one knows how much that would cost, how long it would take, or whether it would be a worthwhile addition to the plan of work. I hope the hon. Gentleman will forgive me: I am not being evasive, but we are beginning a process that will answer all those questions and others.

Similarly, I cannot give the hon. Gentleman a specific figure in relation to the budget, because we do not know what the overall system will look like. What I can say is that HMRC’s initial scoping work will be done within its existing resources and budgets, will not, in general, involve the use of consultants, and will hopefully lead to a proposal which, during the spending review, HMRC can decide whether to adopt, depending on the outcome of the review.

Of course local government and, indeed, business should be extensively engaged in the process. I know that HMRC is committed to that, and the hon. Gentleman would no doubt hold me and Treasury Ministers to account if it were not the case. Typically, Select Committees would take evidence from HMRC in hearings as the system was being designed and rolled out over subsequent years, and I have no reason to doubt that that would happen in this instance.

The last question the hon. Gentleman posed was specifically about the frequency of payments. I am pleased to be able to tell him that this was also brought up on Second Reading. Currently, businesses tend to have at least the opportunity to spread their business rates payment over 10 different instalments over the year. That right is prescribed in regulation—the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989—so that flexibility is already in place and is taken up by many businesses. If there was to be any change to that, it would require this place to pass new regulations, so I think the hon. Gentleman can rest assured on that point.

I hope that answers all the hon. Gentleman’s questions, and I ask Members to agree that, if we can take clauses 1 and 2 together, they stand part of the Bill.

[The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)]

In answer to the Minister’s implied question, I have not put clause 2 to the Committee yet, and therefore before I put the questions on clauses 1 and 2 I will immediately, for the sake of clarity, rule that we are debating clause 1 and clause 2 together; I had not said that before, but as both the Minister and the Opposition Front-Bench spokesman appear to have done so I will retrospectively allow it. Also, I will just ensure that no one else wishes to speak on either clause 1 or clause 2 before I put either of the Questions, and I see that that is indeed the case, so let us proceed.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

[Rishi Sunak]

I beg to move, That the Bill be now read the Third time.

This simple, narrow measure will take the first steps towards improving the tax system for businesses by developing a new digital system to administrate business rates. It is part of the Government’s commitment to make Britain the best place in the world to do business.

I would like briefly to thank right hon. and hon. Members in all parts of the House for their contributions during the extensive Second Reading and Committee stages of the Bill. Specifically, I am grateful to those who supported it on Second Reading, highlighting the importance of our efforts to support business and our high streets and of our consulting widely on the development of this new digital system. I am grateful to the Clerks of the House and to officials in both my Department and Her Majesty’s Revenue and Customs for their work on the Bill.

This simple Bill will allow HMRC to develop a new system for the administration of business rates; it has wide support, and I commend it to the House.

Non-Domestic Rating (Preparation for Digital Services) Bill

Rishi Sunak Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Monday 13th May 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move, That the Bill be now read a Second time.

This Government are committed to ensuring that the tax system is fit for the 21st century, that it is designed around the needs of the taxpayer and that we minimise as far as possible the administrative burden for businesses paying their taxes. The Government are also clear that this system should reflect and take full advantage of modern technology, and use that to make the process as simple and efficient as possible for taxpayers.

This very narrow Bill will support those aims in the context of the administration of business rates. This extremely short and simple measure will simply allow us to start exploring future digital reform of the business rates system. The same clauses appeared in the 2017 Local Government Finance Bill and passed through Committee without Division. The hon. Member for Oldham West and Royton (Jim McMahon) was present during those debates, and I hope the clauses will receive the House’s support again today.

[John Redwood (Wokingham) (Con)]

Can the Minister give an idea of the cost involved and what sort of efficient and better system might emerge?

[Rishi Sunak]

The measure is even narrower than that; it is simply a paving measure, which I will come on to, that enables that exploratory work to start so that future Ministers will be able to come to this House with firmer proposals, with costs attached, depending on the eventual design of the system that is ultimately decided to be appropriate after extensive consultation with the sector. If my right hon. Friend bears with me, I hope his question will be answered later. If not, I will be happy to have him intervene again.

In the lead-up to the 2016 Budget, the Government undertook a wide-ranging review of the business rates system, in response to public calls to reform. As well as seeking views on the business rates tax itself, the review invited specific feedback on the administration of the rates system, including how business rates are collected.

Responding to the review, business groups called for a number of changes to the way the system is run, including switching the annual indexation of the business rates multiplier to the consumer prices index, rather than the retail prices index; implementing more frequent valuations; and modernising the billing and collection of business rates. I am pleased to say that the Government have already begun reforming the system to implement those changes.

Ratepayers are already benefiting from the change to the annual indexation of business rates from RPI to CPI, which was brought forward by two years, to April 2018. That measure alone is worth almost £6 billion to businesses over the next five years. The Government have also committed to increase the frequency of business rate revaluations from every five years to every three. To ensure that businesses benefit from that change at the earliest point, the Government have further announced that the next revaluation will be brought forward from 2022 to 2021. That will ensure that, as requested, business rates bills more accurately reflect properties’ up-to-date rental value and any relative changes in rents.

The Bill will enable us to begin exploring how to modernise the billing and collection of rates. Businesses in this country are of course already banking, paying bills and making sales online. Our tax system needs to keep pace.

[Mr Jim Cunningham (Coventry South) (Lab)]

Has the Minister seen press reports today that some major companies are calling for a 20% reduction in business rates? Does he have any comments to make about that?

[Rishi Sunak]

It is important to remember that the Bill is much narrower in scope than the design of the business rates system and how individual businesses pay the bills they are given. My hon. Friend the Member for Rossendale and Darwen (Jake Berry), the high streets Minister, is looking forward to winding up the debate, and he will be able to give the House chapter and verse on every single initiative the Government have undertaken to support businesses on the high street. In sum, there has been £13 billion of relief since the 2016 Budget, and a third of all businesses no longer pay any rates at all.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I thank the Minister for giving way—he is being very generous. On that point, however valuable and commendable many of the proposals he mentions may be, does he not feel that this is somewhat like fiddling while Rome burns, or indeed many of our town centres burn? There have been calls for a reduction of around 25% in high street business rates, and that could be funded by making sure that the tech giants pay their fair share of corporation tax.

[Rishi Sunak]

Madam Deputy Speaker, I am loth to get drawn on to topics that are much broader than the very narrow scope of this Bill. However, I am happy to reiterate that I do not think the £675 million high street fund my right hon. Friend the Secretary of State and my hon. Friend the high streets Minister introduced earlier this year is a case of fiddling while Rome burns. The Government are committed to the vibrancy of our high streets through various initiatives that will be outlined in my hon. Friend’s winding-up speech.

Indeed, the Bill is also an important measure; it is a measure that businesses have called for. Given the statutory nature of HMRC, it is impossible to move forward without this short piece of legislation. The reason for that is that businesses today receive separate business rates bills for each non-domestic property they occupy. Large businesses with property in different areas may receive bills from a number of local authorities responsible for issuing bills and collecting payment. It is worth bearing in mind that there are over 300 different billing authorities today, each with its own system of billing for business rates. While I pay tribute to the good work carried out by local authorities in administering business rates locally, the Government’s clear view is that reforming the system to more closely link with the wider management of business taxes led by HMRC could unlock long-term improvements to the current system.

Members will appreciate that implementing any reform of this scale takes significant time and that it is critical that the Government engage with businesses and local government in developing and designing any new digital system; indeed, the hon. Member for Oldham West and Royton brought that up in Committee during consideration of the previous Bill. I am pleased to tell him that the measure before us today will take many years to come to full fruition. The current intention announced by the Treasury is that any new design of the system will not come into force until after the next revaluation, in 2024. What we are doing today is therefore just a very small first step on a journey that requires an enormous amount of engagement and consultation.

The main measure in the Bill allows HMRC to expend resources on beginning to explore designs for a new digital service for business rates. That is necessary because HMRC’s current statutory functions do not include activity in connection with the administration of business rates. To be clear, the legislation we are considering simply permits HMRC to begin the necessary design and engagement work for a potential new digital service. It does not implement any reforms to the current system of business rates administration.

That is important because, as I have noted, the Government are clear on the need to engage with businesses and local government to seek views on any specific options for reform. For example, the local government sector will want to ensure that any changes are fully compatible with the local retention of business rates and with plans to increase rates retention in the future. Equally, business organisations such as the Federation of Small Businesses, the British Independent Retailers Association and the CBI will be keen to engage in future design work to ensure any reforms deliver benefits to businesses and minimise any burdens. Members should also be aware that any practical reforms to the system are likely to require further changes to legislation and, as such, there will be opportunity for full scrutiny of any proposals once the design work has concluded.

The Government’s efforts to improve digital tax services are already helping businesses seize the opportunities that digital technology offers. They are giving businesses more control over their finances, allowing them to spend their time focusing on innovation, growth and the creation of jobs. The Bill will support this by enabling HMRC simply to begin exploring potential options to link business rates with the administration of the wider tax system. It will also enable HMRC to undertake the necessary engagement with stakeholders to ensure any reforms work for business and for local government. While the Bill is just a small paving measure, it supports some potentially significant long-term improvements to the current system. I commend it to the House.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Before I call the Opposition spokesman, with the leave of the House, and most unusually, I am sure the House would like to join me in wishing the Associate Serjeant at Arms, who occupies the Serjeant at Arms’ Chair, a very happy birthday.