Local Government Finance Bill

I should like to draw Members' attention to my entry in the Register of Members' Financial Interests. It is a challenge to follow the two very thoughtful speeches of the right hon. Member for Wentworth and Dearne (John Healey) and my hon. Friend the Member for Ipswich (Ben Gummer). The historical context they gave is very useful, but I cannot help but be persuaded that localising business rate collection and incentivising local councils to grow their own areas in terms of the economy has to be the right thing to do. I met the cabinet of Havant borough council, which is not a wealthy council by any manner of means, on Friday to explain the implications of the Bill, and those members were genuinely excited by what they heard. They said, ““That means we are going to have to rethink everything we do. No longer are we going to be pleading for funding—we are actually going to go out there and find it for ourselves.”” That is an exciting development. I particularly welcome pooling. The Select Committee on Communities and Local Government, under the chairmanship of the hon. Member for Sheffield South East (Mr Betts), went to Manchester. There is a huge appetite in that part of the world—and, I suspect, in many other large metropolitan areas—to see private, local and locally generated ways of creating regeneration. Given the lack of central funds at the moment to promote more regeneration, the pooling of business rates, of ideas, of enterprise zones and of TIFs across a whole local area creates a genuine way forward. That is another reason why I am excited by the proposals. On TIFs, there was some disagreement among those who replied to the consultation about options 1 and 2 and about enterprise zone issues. Should we have small limited schemes that are not subject to the tariff and top-ups regime or should there be ring-fencing to ensure that longer-term schemes can be put together? The Government listened and both those options are available. Clearly, option 2 could create a drain on the overall business rates pool and might therefore have to be limited. I think we all understand how that works. Likewise, we need to be able to have a more flexible, shorter-term version of the TIF pool to ensure that smaller local councils, perhaps in better financed areas, can also get shorter-term projects enabled. That is why I welcome the flexibility being built in. On empty properties and second homes, it is right that people who own second homes should pay full council tax. After all, they rely on the value of their houses being backed up by an enabled local council that allows rubbish to be taken away and planning decisions to be made. It therefore seems quite proper that they should be asked to make a full contribution to the rateable value of their houses. I also strongly welcome the potential to charge those who have long-term empty properties in their possession a premium on council tax. Given that there are 400,000 long-term empty homes in Britain, the Government must do everything they possibly can to get those houses back into occupation. I want to spend a little more time on the issue of council tax benefit localisation, with which I have some issues in principle. I was on the Welfare Reform Bill Committee and it seemed unusual to me to single one benefit out of all the benefits being put into universal credit and put it to one side. That made no great intellectual sense to me. I understand that there is a perfectly reasonable argument about localisation and about local councils being able to create local schemes for their local areas to reflect local circumstances, but this issue added another layer of complexity and it came out of a Bill that was meant to create simplicity. For me, the argument did not stack up. However, we are where we are. I have some questions for the Minister to answer later today or in Committee. Is there any reason why we should not have an official pooling of council tax benefit schemes across my area in Hampshire, for example? Why cannot all district councils in an area get together to create some sort of agreed pool? That would allow some flexibility in under-collection and over-collection and would stop some of the perverse incentives that there might be in the scheme that would push people, particularly those in social housing and where there is a joint housing register, to move into one of the areas on that register. There is a potential problem with this issue and a county-wide scheme in two-tier authorities might be very useful. On parishes, I noticed in the response to the consultation that in chapter 5 there had been some discussion about parishes. If there is to be a grant to local government to be distributed as a council tax discount, what will be the status of parish council precepts given that they are not part of the same authority? Will there be a legal system by which parish councils can be compensated for the lack of collection of council tax? I am not sure that has been wholly resolved. In my part of the world, certainly, this issue will be very important. Finally, discussions on clause 107 of the Welfare Reform Bill suggested that the single fraud investigation service would deal with all benefit investigations. That is on the record in the Hansard of the Bill Committee's proceedings. However, chapter 8 of the consultation document and response suggests that this will now be the province of local councils. I would welcome some clarification on that.