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House of Commons

Tuesday 2 June 2009

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Communities and Local Government

The Secretary of State was asked—

Non-Domestic Rate (Small Businesses)

1. Mr. Philip Hollobone (Kettering) (Con): What assessment she has made of the effects of the transitional arrangements for the national non-domestic rate on small businesses in (a) London and (b) Northamptonshire in 2009-10. [277598]

The Secretary of State for Communities and Local Government (Hazel Blears): No formal consideration is made of the effect of the transitional relief scheme in each financial year, but the Government are aware of the impact that large increases in business rate bills can have on all businesses when the transitional rate relief comes to an end. That is why we are allowing businesses to defer, over two years, 60 per cent. of the increase in their business rates bill for 2009-10 caused by the ending of transitional relief. That is in addition to allowing the deferral of 60 per cent. of the increase caused by the annual inflation adjustment.

Mr. Hollobone: Will the Secretary of State confirm that the business rates deferral scheme will start to take effect from the end of July and will she give a commitment that the new costs incurred by local authorities in sending out the new bills will be fully funded by central Government?

Hazel Blears: Yes, I can confirm to the hon. Gentleman that he is correct on both counts.

Justine Greening (Putney) (Con): With 41 businesses now going insolvent every day, the decision by Ministers to withdraw transitional relief has been taken in a totally fact-free zone. No assessment was made of how withdrawing the relief in the first place would hurt businesses. Two months after the decision to introduce the business rate deferral scheme, Ministers have still not calculated the cost of the scheme to local authorities nor assessed its impact on businesses. Is the Secretary of State still going ahead with the next big challenge for businesses, the 2010 revaluation, and will that decision be taken in a fact-free zone too, with no account taken of the impact on businesses, communities and jobs?

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Hazel Blears: The hon. Lady is in a knowledge-free zone. She has failed to acknowledge the tremendous help that the Government have given to businesses. The help includes the small business rate relief—nearly 400,000 businesses have taken advantage of the 50 per cent. relief, which was opposed by the Opposition—the deferral of 60 per cent. of the retail prices index increase, the deferral of 60 per cent. of the transitional element, and the deferral of tax and VAT for more than 100,000 businesses. That is what real help is, and I am afraid that the hon. Lady is not even on the playing field.

Regional Spatial Strategies

2. John Howell (Henley) (Con): What the timetable is for further reviews of regional spatial strategies. [277599]

The Minister for Housing (Margaret Beckett): Regional spatial strategies have been published for all regions, with the exception of the south-west, where we expect to publish shortly, and the west midlands, which is currently holding an examination in public. All regional planning bodies have agreed timetables for further reviews, and I have put details in the Library.

John Howell: Will the Minister not admit that she has made a mistake and that instead of revising regional spatial strategies, she should be abolishing them and their unsustainable and undemocratic approach to the UK housing market?

Margaret Beckett: No, I think that would be a disastrous course of action. The Opposition have said a lot of sweeping things about there being no need for a regional tier of consideration or decision making, but one of the reasons this Government implemented such proposals is because of representations that we received from across the country, including from the business community in particular, about the gap that existed in our decision-making procedures when there was no regional tier.

Paddy Tipping (Sherwood) (Lab): In the current economic climate, the aspiration to build 3 million new houses by 2020 looks ambitious. In the review of regional plans, will the Minister recognise the pent-up demand for housing that still exists and commit herself to development, in the east midlands and elsewhere, on brownfield sites rather than on greenfield sites?

Margaret Beckett: First, my hon. Friend is entirely right. I hope that everyone in the House recognises the tremendous pent-up demand that exists for new housing and the serious social and economic problems that would be caused if we could not do more to address it. I also entirely accept his other point, although he will know that this Government have a strong record of construction on brownfield sites. I accept completely that that is much the most desirable way, and we will continue to try to pursue it.

Alistair Burt (North-East Bedfordshire) (Con): In the determination to move government closer to the people, what was the deciding factor in moving planning strategy from one unelected quango to another?

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Margaret Beckett: If the hon. Gentleman is referring, as I think he is, to the proposals currently before the House, may I inform him that what we are basically trying to do is streamline and simplify the system? He will have many opportunities to make his contribution on those issues as the Bill proceeds through the House. However, I am sure that he will know that there is a strong element of participation by local authorities; perhaps I could therefore remind the Opposition, who sometimes seem to forget this, that the members of those authorities are elected.

Mr. David Kidney (Stafford) (Lab): Is it my right hon. Friend’s intention that the spatial strategies will respect the Government’s target for new house building on brownfield sites, as measured at the local government level, not the regional level?

Margaret Beckett: It is certainly our hope that people everywhere across the country will take account of that approach, which is obviously the most desirable from every point of view. My hon. Friend will appreciate that sometimes there are greater difficulties in finding suitable sites that meet those criteria, but the Government certainly retain that approach, and we will encourage local authorities to do so too.

Michael Fabricant (Lichfield) (Con): But why should anyone believe what the right hon. Lady says when she talks about building only on brownfield sites? She will know that many of the eco-towns proposed by her predecessor were going to be built on greenfield sites. Does she not accept that there needs to be a balance between the urgent need for extra housing and maintaining the rural environment?

Margaret Beckett: Of course I accept that; I do not think that anyone would dispute it. I simply say to the hon. Gentleman that the reason that people should believe what we say about brownfield sites is that the Government have delivered—in fact, more than delivered—on our targets for brownfield sites. We have had many discussions in the House about the proposals for eco-towns, and he is correct to say that some of those proposals involved greenfield development. They involve a variety of types of development, and we shall return to that issue later in the year.

Mrs. Caroline Spelman (Meriden) (Con): Yesterday, the Prime Minister admitted on Radio 4 that people felt powerless and that politics was not as accountable as it should be. Was there any point at which the right hon. Lady felt that he might have been referring to the unelected, unaccountable regional spatial strategies, which ride roughshod over local communities?

Margaret Beckett: That is certainly not the case. I am sure that is not what the Prime Minister meant, not least because—as I reminded the Opposition a moment ago—there will be very strong local authority involvement and representation in the new bodies that will consider the proposals. They are, as I have said, elected.

Mrs. Spelman: But does the right hon. Lady not understand that local government involvement and participation is no good if it is overridden? Unelected regional bureaucrats arbitrarily doubling or trebling the
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number of homes that local authorities have offered to build on a sustainable basis gives people a feeling of being completely disempowered and confirms their sense that the only way to get a change in politics is to get a change of Government.

Margaret Beckett: I think that the hon. Lady is subtly trying to work round to the proposals that have been put forward by her party, in which, instead of having overall targets that recognise the substantial unmet housing demand identified a moment ago by my hon. Friend the Member for Sherwood (Paddy Tipping), we should somehow let a thousand flowers bloom and thereby allow local authorities to build up to meet the housing need. I would simply say to her that I have read with great care the many comments on her party’s proposals, and that I note with interest and some amusement that many official bodies have said, “What a fascinating idea. We look forward with great interest to hearing from the Conservative party how it can possibly deliver housing.”

Housing Revenue Account

3. David Taylor (North-West Leicestershire) (Lab/Co-op): What recent representations she has received on the future of the housing revenue account subsidy system. [277600]

The Minister for Housing (Margaret Beckett): Since the launch of the joint review of council housing finance with the Treasury in March 2008, we have received position papers from key organisations in the sector, approximately 45 written submissions in response to our call for evidence, papers from a number of housing experts and four petitions. We have also received direct representations in face-to-face meetings with housing representative bodies, local authorities and trade unions.

David Taylor: Despite our pledge to get councils building again, they are doing so at a rate of only about 200 homes a year, although registered social landlords are completing something like 20,000, suggesting a continuing bias against local authorities providing decent, affordable, accountable new homes for rent. Will my right hon. Friend grasp this once-in-a-generation opportunity to reform seriously flawed housing revenue accounts by announcing a self-financing system in which councils can keep their own rents, reinvest surpluses in existing and new stock and have the same freedom as housing associations to access grants and loans for much-needed new developments?

Margaret Beckett: I entirely share my hon. Friend’s concern about the barriers that had been put in the way of local government’s freedom to provide housing for its local communities by the Conservatives when they were last in government. I can assure him, however, that we are in the last stages of removing those barriers and that local authorities will be able to bid for grant. They will have the special opportunity that was made available to them in the Budget of accessing funds reserved for local authorities, but they will also have an opportunity to bid for social grant on the same basis as housing associations and other bodies.

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Julia Goldsworthy (Falmouth and Camborne) (LD): Back in January, the Prime Minister said that he would

local authorities providing more housing. The right hon. Lady has mentioned the money announced in the Budget, but that equates to only three homes per authority. Is it not time to acknowledge that the real barrier is the housing revenue account subsidy? Why are the results of the review so overdue? In the current economic climate, surely what we need is swift action, rather than further delay.

Margaret Beckett: As I pointed out a moment ago to my hon. Friend the Member for North-West Leicestershire (David Taylor), we are removing the last of the barriers that obstruct local authorities. I share what I deduce to be the hon. Lady’s hope, which I hope in turn is shared across the House, that local authorities of every political shade will take advantage of this opportunity to begin greater construction. I also understand her point about the structure of the housing revenue account. The review has not, actually, been massively delayed—we had hoped that it would report in the spring, and we now hope that it will do so this summer—but I fully recognise that there are many criticisms of the present system and that they have a great deal of validity. While I very much hope that we will be able to come forward with radical proposals for change that will attract support across the parties, I am conscious of the unwarrantable precedent of the poll tax, whereby it was thought that anything would be better than the then system. Unless we can come up with anything better than the present system, we may have to tinker with that.

Dr. Brian Iddon (Bolton, South-East) (Lab): I am sure that my right hon. Friend will be aware of the uncertain feelings that managers of arm’s length management organisations are experiencing at the moment. Since the stock is still owned by councils, will she please tell the House when it will be announced that those ALMOs are going to have a certain future ahead of them?

Margaret Beckett: I cannot put a date on the particular concerns that my hon. Friend raises and I recognise, of course, that there are, sadly, a plethora of uncertainties about some of these issues. We will certainly do our best to resolve them as speedily as possible, and if it is helpful, I will write to him if any further information becomes available.

Mr. Stewart Jackson (Peterborough) (Con): Last year, the Communities and Local Government Select Committee reported:

We are now 18 months into the Government’s review of the HRA. When can we expect a conclusion to the review—one that is fair, that supports local autonomy and that will increase the provision of much-needed social housing across the whole country?

Margaret Beckett: It is not 18 months, but never mind. I told the House a few moments ago that we hope to publish some proposals this summer. I fully recognise the justified criticisms of the present system, particularly the volatility and the unfairness, but I view with slight cynicism some of the criticisms we have heard from
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some Conservative local authorities, which were perfectly happy with the surpluses built up—four and more times the size of last year’s—when the Conservative Government were in power. We will put that aside and welcome their conversion to a better approach.

Houses in Multiple Occupation

4. Dr. Roberta Blackman-Woods (City of Durham) (Lab): What progress her Department has made towards implementing those proposals it accepted from the ECOTEC report on houses in multiple occupation. [277601]

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): Following on from the research work undertaken by ECOTEC, the Department published on 13 May a consultation paper on houses in multiple occupation and possible planning responses.

Dr. Blackman-Woods: I thank the Minister for that response and, indeed, for his interest in this subject. He will know that my constituents would like the local authority to have more tools to control the amount of private renting and HMOs in some areas. Will he tell us when proposals to license all private landlords and to alter use classes orders relating to HMOs will be put before the House?

Mr. Wright: I pay tribute to my hon. Friend, who has done a great deal of work in this sector, not least in her role as chair of the all-party group on balanced and sustainable communities. She has really cajoled me and other Ministers in that respect. On her point about the powers available to local authorities, I have to say that she and her constituents are being badly let down by the City of Durham council, but I believe that the new unitary authority for Durham county will do an awful lot better. Powers are available in the Housing Act 2004 to enable local authorities to exercise control on the basis of evidence of antisocial behaviour. Our consultation on use classes orders and aligning housing and planning definitions of HMOs will end on 7 August. We look forward subsequently to consulting the House on that.

Business Rate Liabilities

5. Mr. Mark Harper (Forest of Dean) (Con): When she plans to bring forward legislation to give effect to the planned partial deferral of business rate liabilities in 2009-10. [277602]

The Minister for Local Government (John Healey): We are preparing the regulations now, we will introduce them as soon as possible and they will be in place and in effect by the end of July.

Mr. Harper: Assuming that the regulations are introduced and pass into law before the summer recess, may I point out that all that they do is defer the payment? Will the Minister explain in a little more detail why he decided against supporting the Small Business Rate Relief (Automatic Payment) Bill, tabled by my hon. Friend the Member for Mid-Worcestershire (Peter Luff), which would have enabled all eligible small businesses to halve their rate bills?

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John Healey: We wanted to deal with a bigger problem. The retail prices index meant a 5 per cent. increase in the rates bills of every business, not just small businesses, and there was a particular problem for businesses that experienced the end of the transitional relief for this year. Given the current economic circumstances and the pressure that people are under, we wanted to help them to manage their cash flow and manage this increase by allowing them to pay a lower level of increase this year and spread the payments over the following two years. That is why we are introducing the regulations, and that is why they have been welcomed by business organisations.

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