Jim McMahon MP: speeches

Speeches

• 31 Mar 2025 · Birmingham City Council · Hansard source

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  With permission, Madam Deputy Speaker, I would like to update the House on the statutory intervention at Birmingham city council and on the issues affecting the waste service. This Government were elected on a manifesto that pledged to fix the foundations of local government. The public rightly expect and deserve well-functioning local councils that provide the essential statutory services that residents rely on. Local councils must be fit, legal and decent. Commissioners have been working with Birmingham city council for the past 18 months to support it in its recovery, and today I am publishing their latest report into the progress on that journey. The report lands at a point of acute difficulty for residents in Birmingham, as the ongoing dispute in the waste service is resulting in rubbish piling up in the streets. I will therefore take this opportunity to update the House on the status of that dispute. To address the report first, the council has taken important initial steps forward on its improvement journey, and is working constructively with commissioners. It has made significant progress on addressing historical equal pay issues and fixing the foundations of governance. The leader, Councillor Cotton, and his group are taking the difficult decisions to get the council back on track, and the commissioners have recognised his calm leadership through stormy waters. The new managing director, Joanne Roney CBE, has brought a steady hand, and is beginning to make permanent senior appointments that will contribute to much-needed stabilisation. The council has also achieved a breakthrough by reaching an agreement to settle the outstanding claims and end the ongoing equal pay saga. It is also set to re-implement a strategy for the Oracle IT system. Those improvements are encouraging, but challenges remain. In the short term, commissioner oversight and close supervision will still be required to maintain momentum. There is a difficult road ahead on key aspects of the best value regime—on governance and culture, financial management and service delivery—because substantial risks threaten the journey to reform and recovery. As Members will know, there is a live industrial action in waste services, involving one of the three recognised trade unions in that area. The Government will support the leader and his team in Birmingham, directly and through the commissioners, to move the council on from these historical issues. That support includes an increase in core spending power for 2025-26 of up to 9.8%, or £131 million. That figure includes £39.3 million through the new one-off recovery grant, which illustrates this Government’s commitment to correcting the unfairness in the funding system. We have also put in place an in-principle agreement for exceptional financial support totalling £1.24 billion. Turning to the waste dispute, councils deliver over 800 vital services that make a huge difference to millions of people across the country. However, it is accepted that for many, the most visible and universal service is the collection and disposal of household waste. Members across the House will know that the current industrial action in the city is causing misery and disruption to local people, and I know that hon. Members whose constituents are affected will be acutely aware of that disruption. From the outset, I want to be clear that the statutory intervention is led by commissioners, and Ministers cannot legally intervene in this industrial action. However, I have been in regular contact with the leadership of the council throughout this, as they have sought to find a resolution in which the reforms needed to build a sustainable council are still undertaken, and the waste collection service returns to functioning normally, in the way that Members would expect. This situation is causing public health risks to the city’s most vulnerable and deprived residents. As a result, Birmingham has today declared a major incident, so that it can use the mechanisms that it needs to better manage the impact on local residents. I support that decision, and I will back local leaders in bringing the situation under control in the weeks to come. Well-established arrangements are in place to enable local areas to escalate issues when they need support, and the Government are monitoring the situation closely. This is a local issue, and it is right that the key public sector partners in Birmingham lead on it. If leaders in Birmingham feel that tackling these issues would require resources beyond those available to them, and request national support, we of course stand ready to respond to any such request. This Government will always back local leaders and give them the support that they need, not swoop in to criticise or take over from Whitehall. We will not hesitate to give support in any way that Birmingham leaders need. As Parliament would expect, a meeting will take place with the leadership of the council, the commissioners and other key local partners to ensure that we are doing everything we can to support and protect public health. It is in the interests of all parties and, most importantly, for the benefit of Birmingham’s residents that this industrial action is brought to a close in a meaningful and sustainable way as soon as possible. We encourage all parties to redouble their efforts to get around the table and find a resolution. Any deal to end industrial action must maintain value for money and ensure fit-for-purpose waste collection services, without creating or storing up liabilities for the future. All parties recognise that Birmingham’s waste service has been in urgent need of modernisation and transformation for many years, so any deal reached must not repeat the mistakes of the past. Practices in the waste service have been the source of one of the largest equal pay crises in modern UK history, resulting in costs of over £1 billion to the residents of Birmingham. This situation simply cannot continue. I support the council on its journey to creating the sustainable, fair and reliable waste service that residents in Birmingham deserve. We will support the council in resolving its historic issues and establishing the leadership, governance and culture that will drive good-quality public services for the people of that city, so that it can take its rightful place with confidence as one of our great UK cities. As the council moves to the next stage of intervention, I will continue to work with the council, commissioners and the wider local government sector to understand how we can best ensure that residents get what they need from their local council. I will monitor progress, as I have done since the general election, to ensure that continuous improvement led by the council can be secured. As I am sure the whole House would expect, the commissioner arrangements will need to remain in place while the situation in Birmingham is so fragile. The commissioners have a vital role to play in supporting Birmingham’s transformation, working hand in glove with local leaders. The Government remain committed to working in genuine partnership with the city and its council, and I continue to encourage the council to strengthen its partnerships with regional stakeholders, including Mayor Parker in the West Midlands combined authority, to support economic growth and financial sustainability. We are keen to promote growth and regeneration opportunities for Birmingham, and we are confident that as the council continues to work to fix the basics, while making progress against the milestones, local stakeholders will be encouraged to work in partnership with the council to deliver a clear vision for the future. I look forward to continuing dialogue with commissioners, the council and regional partnerships, including Mayor Parker, on opportunities for growth in the region. A partnership approach with a clear vision will increase Birmingham’s capacity to achieve sustainable growth. The people of Birmingham deserve a well-run, accountable and financially stable council with good public services, not least waste collection services. I am encouraged by the council’s leadership and commitment to the same, and I look forward to the council beginning to demonstrate more ownership of its recovery, and to seeing evidence that it can deliver the lasting improvements that are required. I will deposit in the House Library copies of the commissioners’ report, which is being published today on gov.uk.

• 31 Mar 2025 · Birmingham City Council · Hansard source

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  I said that this is a partnership. Of course, Birmingham city council, as the employer in this trade union dispute, has to negotiate with the trade unions and the workforce to get those services back. That is a statement of fact, not an opinion. The question is then: what can we do, as a national Government, to support local government to achieve that? We have maintained support. The commissioners, appointed by the previous Government, are in place. We have provided additional financial support—not just to Birmingham—with £5 billion of new investment in local government, bringing the total settlement to £69 billion. As I said before, £40 million alone was for the recovery grant for Birmingham, so I feel the Government are doing as much as we can, but we always stand ready to do more if needed.

• 31 Mar 2025 · Birmingham City Council · Hansard source

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  The hon. Gentleman is trying to set up the good council and the bad council by party politics, but I am afraid that has been exhausted. The previous Government did this all the time: they would parade councils of a different colour around for shaming, whatever the issue, while for one of their own they would just hope that everything would move on and that nobody would notice. We are not interested in doing that. This is about a new partnership, where national Government and local government work together to resolve these issues. If a Conservative council finds itself in trouble—there have been some, I should say, and there may be more in the future—I am not going to name and shame it and parade it around in the way the hon. Gentleman is trying to do today. We stand ready to work with councils of all political parties in the interests of the people at a local level, because that is what matters.

• 31 Mar 2025 · Birmingham City Council · Hansard source

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  I am pleased to say that we are making sure that we deal with the waste piling up in the streets and that the council gets the support it needs, but the hon. Lady is right to say that there is an interrelationship. This dispute does not sit in isolation; it is part of wider considerations on equal pay, and we have to bear in mind that the cost of meeting the equal pay liability for the people of Birmingham is £1 billion. There can be no steps forward in this dispute that double down on the inherent problems that led to the equal pay crisis that the city has faced. These are sensitive negotiations, but it is important that the council continues to negotiate and that people get around the table to find a way through. The hon. Lady talks about the multi-year settlement that is being prepared for and the simplification of the funding mechanism, but she also mentions redistribution. Birmingham and councils like it have not found themselves in this situation in a vacuum; it has been partly driven by central Government not distributing money in a fair way to deal with service need and deprivation, and it is very important that we get the money to where that deprivation exists. Even under the current one-year settlement, Birmingham has had a 9.8% increase—in cash, that is £131 million.

• 31 Mar 2025 · Birmingham City Council · Hansard source

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  We both share the intention and ambition that it will be cleared as soon as possible. There should not be any further delay in reaching an agreement when it is quite clear that the volume of waste to be collected is proving to be a waste hazard. With his background as a councillor, the hon. Gentleman will know that it is for the council, as a local employer, to resolve this matter with the trade unions by agreement. That is what we want.

• 31 Mar 2025 · Birmingham City Council · Hansard source

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  There is a difference in tone between resolving the strike and breaking the strike. We absolutely stand ready to support the council and the workforce more generally, who do want the situation resolved as many who work for the council also work in the city. They take pride in being local public servants and they want the city to be proud of the council in return; for many, that is being tested. We absolutely stand ready to work with the council and find a way through this issue. The council is working hard to resolve it; it understands that people are angry and frustrated, and that, from a public health point of view, it just cannot continue.

• 31 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill · Hansard source

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  I beg to move, That this House disagrees with Lords amendment 1B.

• 31 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill · Hansard source

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  I am grateful for the opportunity to consider the Lords amendments tabled in lieu of those to which this House disagreed. I reiterate my thanks to Members of both Houses for their continued diligence in the scrutiny of these measures. The Bill makes provision to enable the introduction of permanent lower tax rates for retail, hospitality and leisure businesses from April 2026, ending the uncertainty of the temporary RHL relief. The RHL relief stopgap measure creates uncertainty for businesses, as well as a significant fiscal pressure on the Government. This Government are committed to addressing that in the Bill. The Government face the significant challenge that we must balance the books, so we cannot and should not make tax cuts without ensuring that those tax cuts are funded. The Bill therefore makes provision to enable the introduction of a higher multiplier for all properties with a rateable value at or above £500,000, ensuring that the permanent tax cut from RHL properties is sustainably funded from within the business rates system. The Bill will also help to deliver another of the missions set out in the Government’s manifesto: breaking down barriers to opportunity. It will remove eligibility for charitable rate relief from private schools that are charities in England. As I have said before in this House, the Government believe in parental choice but are also determined to fulfil the aspiration of every parent to get the best education for their child. To eliminate the barriers to opportunity, we need to concentrate on the broader picture towards the state sector, where—let us remember—over 90% of children are educated. The revenue raised through the removal of charitable relief will help to deliver our commitments to education and young people and will help us to meet our overarching mission of breaking down barriers to opportunity for all. Lords amendments 1B and 7B seek to allow the Treasury to exclude healthcare hereditaments from the higher multiplier through regulations. Lords amendments 2B and 8B seek to allow the Treasury to exclude anchor stores from the higher multiplier through regulations. The amendments are unnecessary, because the powers that they seek already exist in the Bill. Let me be clear: the powers in the Bill will already allow the Government, should they so choose, to exclude certain properties from the higher multiplier. This is not the intention that I have set out; the Government’s intention is that the higher multiplier will apply to all properties at or above the £500,000 threshold to ensure that local multipliers can be adequately funded. I urge the House to reject the amendments, because they are not required and they duplicate powers that already exist in the Bill. Lords amendment 13B, tabled by Lord Thurlow, would require the Government to “undertake a review of how the provisions in this Act may affect businesses whose rateable value is close to £500,000.” The amendment would require the review to be laid before Parliament within six months of the day on which the Bill is passed. It also specifies that the review “must consider the merits of a separate Use Class and associated multiplier for retail services provided by fulfilment warehouses that do not have a material presence on local high streets, to apply in England.” We have previously considered two similar Lords amendments, and our position has not changed. The amendment is unnecessary. The “Transforming Business Rates” work that is under way recognises the cliff edge in the business rates system and recognises that it may act as a disincentive to expanding. I reiterate the assurance that I have previously provided to the House: the Government are already looking at this precise issue. The second part of Lords amendment 13B would require the Government to undertake a review examining the merits of a separate use class in business rates and an associated multiplier for warehouses that cater for retailers without a material presence on the high street. As has been set out, the Government are already exploring that objective through the projects that have been mentioned. The “Digitalising Business Rates” project will allow us to match property-level data with the business-level data held by HM Revenue and Customs. This will improve the way in which we target business rates. The Government therefore remain of the view that the amendment is not required. I urge hon. Members to disagree to it. The Government are fully committed to transforming the business rates system. This is simply the first step in a wider programme of change in a system that is long overdue for reform. As the Chancellor set out in the spring statement last week, the Government will publish an interim report setting a clear direction of travel for reform, with further policy details to follow at the autumn Budget. Reforms to the business rates system will be phased in over the Parliament. Finally, amendments 15B to 15E seek to move the measure to remove the charitable rate relief from private schools from one that is being made by Parliament through this Bill to one that the Secretary of State would make through regulations, subject to the affirmative resolution procedure for that statutory instrument. The Government are committed to delivering on our manifesto commitments, and part of that is removing the charitable rate relief from private schools to raise revenue to help deliver on our commitments to young people and education, including the in state sector where, as I said, most children are educated. The Government’s view is that this is a matter for Parliament to decide, which is why we have invited Parliament to do so through this Bill. Therefore, the amendments are unnecessary, the Government cannot accept them, and we ask the House to disagree to them.

• 31 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill · Hansard source

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  The rating system adequately reflects the scale of properties. Less than 1% of properties in the business rates system will use the higher multiplier. That will fund the tax break for those on the high street that will use the lower multipliers. In the evidence session —the hon. Gentleman was there—we heard retailers say, “Of course, that will have an impact on our distribution centres, but we have so many stores that are below the threshold.” That allows national retailers with multiple locations to benefit; in the round, they find themselves better off as a result of this policy. As for rebalancing the situation for online retailers and those on our high streets, that is exactly what this measure does. Big distribution centres will pay for that relief. I once again thank hon. Members for their contributions, but for the reasons set out, I respectfully ask this House to disagree with the amendments before us. Question put, That this House disagrees with Lords amendment 1B. The House proceeded to a Division.

• 31 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill · Hansard source

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  I think I addressed the majority of the points in my opening speech that have been raised subsequently, but I thank Members for their contributions. We have heard the Opposition’s concern that the multipliers do not deliver on the stated intention of the policy as announced in the Budget. We clearly do not agree with that position. At the Budget, the Government announced their intention to introduce two lower multipliers for qualifying retail, hospitality and leisure properties, to end the uncertainty of the annual retail, hospitality and leisure relief. Also, as I set out in my opening speech, the relief was a temporary stopgap measure. Of course, it has been extended year on year, but it does not provide the certainty that businesses require. It has created a cliff edge. During our last session—I cannot remember when it was; it feels like it was yesterday—the hon. Member for Thirsk and Malton (Kevin Hollinrake) seemed to acknowledge that the cliff edge that was built in the previous system was providing uncertainty to businesses and their ability to plan ahead. He must surely welcome the fact that this new lower multiplier—this permanent relief—gives all businesses, whether they are retail, hospitality or leisure, the long-term security that they have been asking for and, importantly, in a way that is sustainable and self-financing through the business rates system. Through the Bill, the Government are taking steps to address all the issues that have been outlined. The chosen approach is both appropriate and prudent, and the challenging fiscal environment that the Government face requires it. Any tax cut must be appropriately funded, under our commitment to sound financial management, so the Government intend to introduce a higher multiplier for all properties with a rateable value of £500,000 and above. It is important to say this to settle some of the arguments: that will affect less than 1% of properties in England. Less than 1% will pay more, but that will fund the lower multiplier, as we all recognise. That will help our town centres and our high streets, and it is what we need to do. This approach delivers on the policy set out in the Budget, and on our manifesto commitment to transform the business rates system to make it fairer and fit for the 21st century, and to protect the high street.

• 26 Mar 2025 · Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025 · Hansard source

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  It is a pleasure to serve under your chairmanship, Ms Hobhouse. This Government have been clear on their manifesto commitment to widen and deepen devolution across England. We have moved at pace to realise the benefits of devolution for more people in more places. However, a lot of change is being undertaken at the same time. That requires focus and capacity. We have been clear on our vision for simpler, more sustainable local government structures and the transfer of power out of Westminster through the devolution revolution. Taken with the work being undertaken to fix the broken audit system, introduce a new standards regime and rewrite the local government funding formula so that it truly takes into account needs and resources, we are doing the hard work of rebuilding—not simply returning to what was there before, but using a new approach that is both efficient and more effective.

• 26 Mar 2025 · Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025 · Hansard source

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  To be clear, there is not time to do that. In the finance settlement this year, I think we have done a good job in building a bridge to the multi-year settlement, but it is only a bridge. That does not answer the fundamental, underlying questions that are leading to the financial vulnerabilities of local councils. We have had a cash injection—£5 billion of new money is not insignificant—and it has made a significant difference. Introducing £600 million for a recovery grant gets the money to areas that need it most. That is reflected in the fact that we have not had a single section 114 notice issued as a result of financial distress. But let us be clear: 30 local authorities needed exceptional financial support through the budget process, so a lot of work is required here. As we move to the multi-year settlement, we have to reconcile reorganisation within the lifetime of the three-year multi-year settlement, so that at the end of the settlement, the transition has been completed, the funding has been settled and all councils in England are on a firm footing for the future. Had we waited, we would not have achieved that, and we would have allowed the reorganisation to go beyond the multi-year settlement. I think that would have provided more uncertainty for a system that is quite fragile at the moment, when actually, it needs certainty and direction. We are not doing this because we are gung-ho, but because we believe that these structural reforms are needed and necessary. I absolutely believe not just in consultation, but in collaboration and co-operation. That is about how ideas and proposals can be co-produced. It is for local areas to do that. There will be a statutory consultation on the proposal, and that will happen as a matter of course. But in the end, it is for local areas to make sure that they are having those local conversations and are coming forward to the Government with proposals that mirror what the local desire is, within the art of the possible. I have confidence that local leaders have that shared commitment, too. This order, which was laid on the 11 February, is essential to delivering the Government’s commitment on devolution and reorganisation to the fastest possible timescale, for the reasons that I have set out. The order was made using delegated powers, which have been given in primary legislation granted here, and have been previously used in the same way. All the appropriate steps were taken, and both process and precedent were carefully followed. Nothing is being imposed on local areas—the Government are committed to the devolution priority programmes, and the emerging proposals for the new unitary councils are, by their nature and result, bottom-up. All requests for election delays to deliver reorganisation and devolution to the fastest possible timeframe follow direct requests from local leaders of the affected councils. Devolution and strong councils with the right powers will mean that hard-working councillors and mayors can focus on delivering for their residents on a stable financial footing. It will strengthen the democratic accountability of local government to local residents. A final point that I have not covered is the ordering of by-elections that will take place. The guidance will set out that by-elections will be dealt with in the usual way; they will not be affected by this order.

• 26 Mar 2025 · Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025 · Hansard source

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  We have tried to strike a balance between answering the demand—the fact that all 21 counties have submitted to the interim phase is testament to the support in the system for this—and finding enough of a framework at a national level so that areas know what to report to, while building enough flexibility to take into account that England is very different in its construct and make-up. There are huge variations between urban centres, rural communities and coastal communities. In forming local authorities that have a clear anchor that can be understood and respected by the local community, we have to allow for flexibility in that system. The statutory invitation that went out was clear that that means population sizes of 500,000 as a starting point, but we have been clear with the County Councils Network, the Local Government Association and the District Councils’ Network, and in trade press interviews, that we will see a range. Some will say that the mid-300,000s is right for them, and we are seeing some city districts looking at moving their boundaries outwards. But others will say, “Actually, our county does not have that characteristic—we haven’t got that city anchor or coastal issue that might be present elsewhere—and we think the best option for our place is maybe 600,000 or 700,000”. We want to be flexible enough to take into account local representations as we receive them. Our working assumption is that when all that balances out, we will end up with an average of 500,000, but who knows? We need to see the submissions that come in, but flexibility is important, and it challenges the idea that this is a top-down, mandatory system of uniform councils that all look the same, regardless of local circumstances. It is not that. It is very important nationally that we give the framework and direction—and we have done that—but this is about co-operation and partnership. I appreciate that that point has been picked up on. We have been clear about our willingness to drive forward to deliver this vision, and to work with local councils to support communities to fix the foundation of local government in delivering that ambition. Alongside the English devolution White Paper, I wrote to all places in the 21 areas inviting them to express a clear commitment to delivering to the most ambitious timeframe, and to flag any requests for a delay in elections to take place. Where authorities made such a request, we have judged it to meet a very high bar that was rightly set, and we have kept our commitment that clear leadership locally would have to be met with an active partner at a national level. We have taken the necessary decisions to postpone local elections where it will help to smooth the transition process and deliver the benefits of mayoral devolution, supported by strong and stable local government reorganisation as quickly as possible. We are now working with those areas to prioritise in parallel the necessary steps to explore the establishment of new mayoral authorities in time for the May 2026 mayoral elections, and to deliver plans for new unitary local government. On devolution, public consultations are already under way, running from 17 February to 13 April in these areas. More than 12,500 responses have already been received in that process. We are getting on with delivering reorganisation as well. All district and county councillors in the two-tier areas, and their neighbouring smaller unitary authorities, were invited, and I am pleased to say that every area—comprising of councils of all political stripes—has responded to the invitation to reorganise. They shared with Government an interim plan containing updates on their thinking about options for creating new unitary councils. The response demonstrates without doubt the groundswell consensus from communities that change is overdue and needed. Earlier this week, I made a written statement setting out the details of this, providing parliamentary transparency and supporting the commitment we made to ensure there was active reporting during the course of the process. Local engagement with Members of Parliament, public sector providers, residents and other key local partners will now be led by the councils as they develop detailed proposals to establish strong, stable unitary councils that are fit for the future. This order is essential to allow the first wave of this ambitious programme to be delivered. It grants postponements for 12 months only, and only for the nine councils whose requests met the high bar we set. We are extremely clear that these decisions were made on the basis of local requests to free up capacity and enable the practical steps needed, which would not be feasible so quickly if the 2025 local elections went ahead in those areas, for reasons that are self-evident. These areas have demonstrated the clear and strong local leadership and the necessary ambition to drive forward the programmes to the timelines that the Government have set out to deliver for those areas, including taking the difficult decisions that are needed. Let me address the points that have been made. I sense that a lot of the debate today has picked this process out as being unusual in English local government, but it is not. Members will know that between 2019 and 2022, 30 sets of elections were cancelled: 17 to allow preparatory work for local government reorganisation, which is what we are talking about here, and 13 as part of legislation to allow the unitarisation process to take place after the proposals had been submitted. So this is not unusual; it is a natural part of the cycle to free up capacity and enable those proposals to be developed— I can go through the list, and provide the details in writing. But I do think we need to be careful here. First of all, we absolutely believe that this is the right thing to do, and that is not because we have an ideological view about how local government should sit. All the Members in this room are here because we care about local government and local communities, and we cannot have a hand-to-mouth funding regime where local government is just not sustainable. We have to find a solution that really fixes the foundations, and this is one small part of that—there is a lot more we need to do—but it is important. If we did everything else but not this, it would just not hold together. I think that it would devalue—I will be honest and direct about this—the work that local leaders have put into this at a local level to build consensus and show leadership. I am not talking about exclusively Labour leaders; in many areas, they are Conservative, Liberal Democrat or independent. We have a collective responsibility to at least mirror the leadership that they have shown across political parties in the interests of their communities, and to reflect that here in the national Parliament. I do not think that is too much to ask.

• 26 Mar 2025 · Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025 · Hansard source

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  We absolutely understand that that gap of silence can be undermining to the process. Even conflicting advice or information allows people to fill in the gaps or exploit the situation. Clarity is needed. I think we have done that. Whenever we have brought a statement to the House, it has been extremely well attended. I think that the two on this issue have run for more than an hour, in terms of parliamentary interest. On the interim proposals, the deadline was on Friday and we submitted the written statement to Parliament on the Monday; we submitted that the minute that Parliament reconvened. So we do want to ensure that that communication is there. We will marshal departmental capacity. We are speaking to the LGA, to the County Councils Network and to the District Councils’ Network, and we appreciate the leadership that they have shown. They have been quite challenging in their representations at points, but I think they have done an excellent job in reflecting the on-the-ground reality back to us, and we have appreciated that. On the areas in scope, we have provided an additional £7.6 million to enable proposals to be developed, so it is not a financial pressure entirely on local government to do that. We want and expect, in some areas, that they will have a unified proposal that they can rally around and for which there is broad support, as that would make everyone’s lives easier. We also live in the real world and understand that there may be different views on what a good outcome is. I think that is legitimate, and it should be allowed for in the process. The Government’s role at that point will be to take a view on the proposal that best meets the criteria set out in terms of efficiency, sustainability and, importantly, identity, as having that local anchor is a very important part of that too. With that within the process, we can take into account the range of different views. I have covered the population size issue, in terms of that being a starting point. That does not mean that it is the end point for every area; but we do not want to reset that number. I can guarantee that if we were to say, “Right, it is not 500,000 any more; it is the mid-300,000s, and that is the new starting point,” I would get a queue of councils asking, “Can we have a conversation about the mid-100,000s?” That completely undermines the principle for doing local government reorganisation and takes us back to square one. Having a starting point that can be flexed, with some give—I think going to the mid-300,000s is give, but let us see, given that the other way is give too—is where we need to be. Even though this SI of course deals with the election postponement in these county areas, district council elections will follow, and with a fair wind—I accept there is a way to go yet, and we are still in the consultation phase, which is important—they will also have mayoral elections in those areas for the first time. For the first time, they will actually be able to receive further powers and further budgets from central Government in a way they have not before. So, this should be welcomed. For democrats in the room, this is additional democracy, accountability, freedoms and flexibility, which is genuinely rewiring the way that we govern England. It is long overdue.

• 26 Mar 2025 · Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025 · Hansard source

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  All those are fair questions. On the timetable, there are in effect three tranches. The first tranche is Surrey, which is being brought forward because there cannot be devolution as a single county unless we do the reorganisation and create a combined authority after that. This is fairly well covered, but it has quite significant issues of debt that need to be reconciled as part of that process. Surrey has 9 May as the deadline for its final proposals. Areas that have had their elections postponed are in the devolution priority programme. They have until 26 September to submit their final proposals. All other areas have until 28 November to submit their final proposals. I will just say that there is sufficient time. Surrey is clearly the exception, and that is an accelerated timetable by agreement with the local authorities in that area—we will ensure that adequate resources are provided to meet that challenge. For all other areas, however, we believe that there is sufficient time. I should also say that the difference between September and November as the end date takes into account the election period, recognising that the preparatory work that would take place otherwise would not take place then.

• 26 Mar 2025 · Local Authorities (Changes to Years of Ordinary Elections) (England) Order 2025 · Hansard source

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  I think it is important that the record reflects the actual situation. First, there was no mandating, because this is about postponing elections to allow reorganisation; it is not about the reorganisation process itself. To be clear, 18 councils applied to have their elections postponed and we agreed to nine, because not all met the high bar that we have set. Also, to be clear, 24 of the 33 elections that were due to take place in May 2025 are going ahead as normal.

• 25 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill) · Hansard source

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  The answer is that it is both, as I will go on to explain in more detail. It is an important first step, and the relief that is provided, funded through the higher rate properties, will be hard-baked into the system, notwithstanding any future support that may well follow, which we are not pre-empting today. Lords amendments 1, 6, 7 and 12 would remove qualifying healthcare hereditaments from the higher multiplier, and Lords amendments 2, 5, 8 and 11 would do the same in relating to anchor stores. Considering the challenging fiscal environment, it is vital that this permanent tax cut is funded sustainably. The Government have been clear that they will do that by applying the higher multiplier to all properties with a rateable value at or above £500,000. That accounts for less than 1% of all properties and is the fairest approach. The impact on healthcare properties is limited. As set out in the other place, of the 16,780 properties at or above the £500,000 threshold based on the current rating list and rounded to 10, only 350 are in the health sub-sector. Of those, 290 are NHS hospitals and only 30 are doctors’ surgeries or health centres. At the autumn Budget, the Chancellor fixed the spending envelope for phase 2 of the spending review. The Government are considering the full range of departmental priorities and pressures as part of the spending review, and that includes any impact of the higher multiplier on public sector properties, such as schools and hospitals. I urge the House to disagree with those amendments. We recognise the importance of anchor stores, and we are doing a great deal to support the high street in this Bill and elsewhere. While the largest anchor stores may be caught by the higher multiplier, they are often part of large retail chains that will have a number of properties with rateable values below £500,000. Those businesses will, therefore, benefit overall from the lower multipliers.

• 25 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill) · Hansard source

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  I beg to move, That this House disagrees with Lords amendment 1.

• 25 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill) · Hansard source

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  First, I am grateful to Members of both the Commons and the Lords who have so diligently scrutinised the Bill throughout its passage. Before I address the amendments tabled by the Lords, allow me to remind the House of why we introduced the Bill in the first place. This Government have committed to transforming the business rates system, and the Bill is a first step on that important journey. We want to achieve a sustainable system that is fit for the current economic landscape, and where business growth is supported and ratepayers pay their fair share. I thank the noble Lord Khan of Burnley for taking the Bill through the other place and for being so thorough in his approach. I also thank officers of the Ministry of Housing, Communities and Local Government and my private office for all their work on the Bill. The Government oppose all the amendments before us today and I will provide further explanation as to why. At the Budget, the Government explained that we wanted to introduce new lower multipliers for qualifying retail, hospitality and leisure properties from April 2026 to address the uncertainty of the temporary, stopgap support provided by the annual RHL relief. Business rates represent a stable source of revenue for local government, meaning that this permanent tax cut must be sustainably funded. That is why the Government also announced our intention to introduce a higher multiplier for all properties with a rateable value at or above £500,000. This Bill makes provision to enable the introduction of those new multipliers, so this is the first step towards delivering on the Government’s manifesto commitment to transform the business rates system to one that is sustainable, protects the high street and is fit for the 21st century.

• 25 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill) · Hansard source

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  The Bill provides a cash saving for exactly the types of business that the right hon. Member talks about. We all understand the importance of pubs to our towns, villages and estates, not just as businesses in the economy but as places for the community to convene, to meet and to build relationships and networks. That is exactly why the measures are being brought in, and in a permanent way, because pubs needs certainty. They know the rising costs of supplies, carbon dioxide and energy have put significant pressure on pub operations, and these measures provide long-term stability that bakes in the support the Government can offer into the system. Many pubs will be free houses and they will be independent. However, a number of pubs will be part of a brewery chain with managers in place. The measures take away the cash cap of £110,000 per business, allowing, for the first time, multiple operators to benefit. That will benefit pub chains, as well as high street stores, such as Home Bargains, Boots and other retailers. Those businesses draw in footfall, which then supports independent retailers as well. The proposals are rounded and provide long-term stability that is properly funded in a responsible way. On that basis, the Government oppose the Lords amendments as laid out. Lord’s amendments 3, 4, 9 and 10 are concerned with bringing manufacturing properties into scope of the lower multiplier. If we widen the scope of the lower multipliers in that way, it will dilute the support available to RHL properties or jeopardise the ability of the Government to sustainably fund the lower multipliers. We need to be clear that this is not a wide-ranging offer, but targeted deliberately at supporting our communities, high streets and town centres. That is why the Bill focuses on RHL support. The Government are supporting the manufacturing sector through other means. For those reasons, I urge the House to oppose the amendments. Lord’s amendments 13 and 16 require the Government to undertake a review of how the provisions to introduce new multipliers may affect businesses whose rateable value is close to the £500,000 threshold for the higher multiplier. The review would need to be put before Parliament three months prior to 1 April 2026 in order for clauses 1 to 4 of this Bill to come into effect. These amendments probe around the way the multipliers in the business rates system currently operate. Those hereditaments on the standard multiplier, or in the future on the higher multipliers, pay rates on that multiplier calculated on all of their rateable value, and not just the rateable value above the threshold. That, of course, generates cliff edges in the rates bills for hereditaments as they move between thresholds, and we acknowledge the presence of those cliff edges—it is a matter of fact. At the autumn Budget, the Treasury launched a discussion with business on the “Transforming Business Rates” paper. This specifically highlights these cliff edges in the system and considers whether they may act as a disincentive to expand, so I can assure the House that we are already looking at the precise issue identified in the amendment. Reforms are being taken forward through the transforming business rates work and will be phased in over the course of the Parliament. Therefore, we believe Lords amendments 13 and 16 are unnecessary. Lords amendment 14 would require the Government to commence a review that examines the merits of creating, within three months of Royal Assent, a separate use class and associated multiplier within the non-domestic ratings for retail services provided by fulfilment warehouses in England that do not have a material presence on high streets. The noble Lord Thurlow, who put forward the amendment, made it clear that this use class would apply only to business rates. As he explained in the other place, the key task is to identify those warehouses, as distinct from warehouses used by, say, high street retailers—warehouses that may otherwise look the same. The Lords amendment would bring together the Government and professional bodies working on business rates to identify those warehouses. We are already exploring that objective through an existing project. The digitalising business rates project will allow us to match property-level data with business-level data from His Majesty’s Revenue and Customs to improve the way in which we target business rates, and to identify property and businesses in the way that the Lords amendment envisages.

• 25 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill) · Hansard source

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  We welcome scrutiny through amendments and the insight that the other place can provide, just as we welcomed scrutiny in the evidence sessions and Committee sittings; it adds value. We need to be honest: it is natural for Members to want to widen the scope of legislation during its passage, and to include more. In Government, we have to deal with the art of the possible, which means balancing a number of competing interests, not least the impact on taxpayers in the round. The Bill is targeted at those who need it the most—communities and local economies—and it is fully funded to ensure that it is sustainable. We cannot draw the legislation so wide that it does not stand the test of time and does not cover its own cost. That would not be responsible, and certainly would not be sustainable. Lords amendment 14 would require the Government to implement the recommendations of the review. Given that we do not know what those recommendations would be, I trust the House will understand that we cannot accept an amendment to accept them blindly in advance. Finally, Lords amendment 15 and consequential Lords amendments 17 to 19 would strike from the Bill the clause that removes charitable rate relief from private schools that are charities. We are unable to accept these Lords amendments. This Government made a manifesto commitment to raise school standards for every child, break down barriers to opportunity and ensure that every child has the best start in life, no matter where they come from or their financial background. Achieving our ambition involves meeting our commitment to removing the VAT and business rates charitable relief tax breaks for private schools; the approach and design of this policy has been carefully considered in the light of that. The measures are necessary in order to raise the revenue to deliver on the Government’s commitment to education and young people, and to improve the state sector, where—let us be clear—90% of children are educated. This Government are prepared to take the tough but necessary decisions to deliver on those bold commitments, so, as with all the other amendments brought here from the other place, I cannot accept these Lords amendments. I hope that the rest of the House follows suit.

• 25 Mar 2025 · Non-Domestic Rating (Multipliers and Private Schools) Bill (changed to Non-Domestic Rating (Multipliers) Bill) · Hansard source

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  I am not going to pre-empt any further decisions on this, other than to say that this represents an important and significant step forward. As a constituency MP, he, like me, will have heard from many small businesses—retailers, hospitality providers or leisure providers—who appreciated the support during covid, but were very clear that there was a cliff edge and that that support was coming to an end. The previous Government did not provide any certainty about what followed, so the Bill ends that uncertainty and hardwires in a permanent relief system to ensure those important businesses that are the foundation of our communities and our economy are supported through the tax system.

• 19 Mar 2025 · Council Tax Reform · Hansard source

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  I think that after the last 14 years, roads in quite a lot of England are falling apart. That is why we injected another £500 million into pothole repairs this year, because we know that local people feel that issue acutely. We also recognise, as I said before, that this will take longer than seven months. On financing, we are clear that the current formula needs to be reviewed. It is not good enough any more to keep on having a formula that is not fit for purpose, and which is supplemented by top-ups that change depending on the whim of the Government of the day. If this is a genuinely fair funding formula, it must be fair when tested. That means that wherever someone is in the country, and whatever their local circumstance, they know that those issues have been taken into account. Some of that will involve deprivation or the ability to raise tax at a local level, but some of it will involve demand on services, including rurality. We must ensure that in the review we rebuilt trust and confidence as well as sustainability, and the hon. Gentleman has my commitment that we are determined to ensure that that work is done with integrity. We recognise the urgency to fix the foundations, and to tackle the underlying issues that we have talked about. For all the criticisms of the current council tax system—many of which are completely legitimate—it has some advantages. First, it is a settled tax that taxpayers understand, and notwithstanding the uncollected element that was mentioned earlier, pound for pound it has a high collection rate. On that basis, revenues are relatively predictable, which means that local authorities have greater certainty for their financial planning. Council tax is genuinely local. The money is collected locally, retained locally, and authorities will make decisions on the band D level based on their local requirements and delivery priorities.

• 19 Mar 2025 · Council Tax Reform · Hansard source

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  I accept that there are inherent issues with council tax, not least the way that the banding system works. Because of the inherent land and property values in less affluent places, people in a lower-band property in a poorer part of the country will pay more for public services than those in more affluent properties elsewhere. Those more affluent places can collect sufficient amounts to fund local public services, where other areas clearly cannot do that. The situation has been made significantly worse by a Government who removed that central support over a decade, so council tax is taking on a significant burden of the weight of local public services. We are keen to address that imbalance through the funding review that we are undertaking. Members will know that local authorities have control over the discretionary working age council tax support scheme, and the council tax system also includes a range of discounts and exemptions to reflect the personal characteristics of occupiers and to support those less able to pay. These include the single-person discount, exemption for student and disregards for carers, the mentally impaired—a term I would not choose to use, but that is the term used in legislation—and apprentices. The Government will consult on the administration of council tax later this year and consider the case for modernising support in the system for those who need it. However, I recognise the challenges that council tax creates for some taxpayers and local authorities. I therefore want to reaffirm that this Government are keen to continue working with my hon. Friend the Member for Hartlepool and his APPG to understand the issues in the council tax system and what options for reform are available to us. Question put and agreed to.

• 19 Mar 2025 · Council Tax Reform · Hansard source

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  I congratulate my hon. Friend the Member for Hartlepool (Mr Brash) on securing this Adjournment debate on the important issue of council tax. I am grateful for the work and research that he and the all-party group have put into their argument for council tax reform. The Government take seriously the issue of how councils are funded, and the impact on local taxpayers. Council tax is an important part of the funding that councils require to deliver a range of over 800 vital services. For 2024-25, council tax makes up over half of councils’ core spending power. Individual councils are responsible for setting their own level of council tax, taking into account their local circumstances. Indeed, council tax is the balancing item in the local council budget. As my hon. Friend will know, the ability to raise revenue from council tax is determined by the number of domestic properties within a local authority area, and by the value of those properties in 1991. That means that places with a high number of more valuable properties are often able to raise more than an area with lower-value properties, despite setting the same or commonly a lower level of council tax. However, as he said, the Government have ruled out a revaluation of council tax in this Parliament. That means that we must find other ways to address the discrepancies in tax-raising ability through other means. The last Conservative Government committed to improving and updating the way in which councils are funded, through the fair funding review, but that work was not delivered. We will make good on that commitment and implement long-awaited funding reforms through a multi-year settlement in 2026-27—the first in over a decade. We have recently consulted on the proposed objectives and principles for local government funding reform. In that consultation, we propose to update the way we account for council tax in determining local authority funding allocations, so that future allocations more effectively account for the differing ability to raise council tax income across the country. As my hon. Friend has pointed out, that means that somewhere like Hartlepool, where the tax base is weaker because of the high number of homes in bands A to C, will not be treated the same as an authority in the south-east that has a high number of homes in bands E to H and therefore has greater council tax revenue-raising power. That will be part of a wider set of changes to improve the approach to funding allocations within the local government finance settlement by ensuring that they reflect an up-to-date assessment of need and, importantly, local resources. Those funding reforms are part of a comprehensive set of reforms for public services to fix the foundations of local government. That will be done in partnership with the sector and on the principle of giving forward notice and certainty to allow time for councils to plan for the future. Although the Government recognise the arguments in favour of council tax revaluation and reform, there are currently no plans to reform council tax in this Parliament, as I have said. Significant changes to local government structures, governance, accountability, audit, standards and financing are taking place alongside an ambitious programme of devolution and, of course, local government reorganisation. I say that because we cannot overstate the amount of change taking place in a very short time within a system that has been left quite fragile, as my hon. Friend will know, after 14 years of mismanagement by the previous Government.