Local Government Finance

Part of the debate – in the House of Commons at 5:55 pm on 22nd February 2017.

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Photo of Kevin Hollinrake Kevin Hollinrake Conservative, Thirsk and Malton 5:55 pm, 22nd February 2017

It is an honour to follow my hon. Friend Steve Double. I shall keep my comments very brief, because I have been told to do so by the Whips and by Mr Deputy Speaker when he was in the Chair earlier. My comments are simple ones. I understand that the Secretary of State has a lot on his plate at the moment, but he is sitting on a golden opportunity—a once-in-a-parliamentary-generation opportunity, perhaps—to fix two fundamental problems in the system. The first relates to fairness in the rating system. The second involves fairer funding for local authorities. In relation to rates, I must refer Members to my declaration in the Register of Members’ Financial Interests, in that we have quite a lot of shops around the UK that are subject to the rating system. I believe that a fairer system would be a sales tax. It would disadvantage my network, but it would nevertheless be much fairer.

My principal comments relate to fairer funding for local authorities. I have heard many comments from Members across the House about how this issue affects rural areas in comparison with metropolitan areas. The shadow Minister, Mr Thomas, knows what I am going to say about this. The biggest iniquity by far is the way in which London is treated in comparison with the rest of the country. That is the reality. I am grateful to Leicestershire County Council for producing a report, which I urge Members to download, in which it has collapsed all district and county councils into one, pooled their resources and divided the sum by the number of people in those areas to give the spending power per local authority. The reality is that nine of the 10 local authorities with the highest spending power are in London, yet nine of the 10 authorities with the lowest council tax are also in London. That is simply unfair. It would be perfectly appropriate as long as the need drivers were taken into account. Let us take Harrow as an example plucked out of thin air. Harrow has £80 a year more spending power than North Yorkshire, yet it has a richer and younger population. How can that be right? [Interruption.] That cannot be the explanation, surely.