23/01/2017 House of Commons


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it. The noes have it. Order. Urgent question. Can I ask the Secretary of


State for defence if he'll make a statement on the test firing of a


Trident nuclear missile in June 2016.


Mr Speaker. In June last year, the Royal Navy conduct aid demonstration


and shake down operation designed to certify HMS Vengeance and her crew


prior to their return to operations. This included a routine unarmed


Trident missile test launch. Contrary to reports in the weekend


press, HMS Vengeance and her crew were successfully tested and


certified as ready to rejoin the operational cycle. We do not comment


on the detail of submarine operations. I can, however, assure


the House that during any test firing, the safety of the crew and


public is paramount and is never compromised. Prior to conducting a


Trident test fire, the United Kingdom strictly add meres to all --


adheres it all relevant treaty obligations, notifying relevant


nations and other interested parties. Here, the chairman of the


Defence Select Committee, the Opposition defence spokesperson and


the chairman of the Public Accounts Committee were informed in advance.


I can assure the House that the capability and effectiveness of the


United Kingdom's independent nuclear deterrent is not in doubt. The


Government has absolute confidence in our deterrent and in the Royal


Navy crews who protect us and our Nato allies every hour of every day.


Can I thank the Secretary of State for his answer. He will know that I


am one who is a strong believer in this country's independent nuclear


deterrent. In recent decades there have been major inroads made to


transparency of nuclear issues amongst the public. An important


message in terms of maintaining the consensus and support of our


independent nuclear deterrent. Included in that has been the


openness and publicity about the test launches in Florida. Can I ask


the Secretary of State with regard to the latest test, will he, he will


have seen the press at the weekend, the cla claimsthat the missile


Veered off towards the United States. Could he confirm whether


that was the case? Could he tell the House when he was first informed


there was a problem with the test and when his department informed the


then Prime Minister, David Cameron, of the problem? Could he also say


whether it was him or the Prime Minister, David Cameron, at the


time, who took the decision of his department to shelf the customary


practice of pub list sizing the test and ordering a news blackout?


Finally, could he also say what discussions he has had with the


present Prime Minister about this test and why it was not relayed to


Parliament before the debate on successor submarine programme last


July. Can I finish by paying tribute to the members of our armed forces


who for the last 48 years have maintained operation relentless,


which has maintained our continuing at-sea deterrent. I'm grateful to


the honourable gentleman. I do appreciate that he's not only takes


a very close interest in defence and has borne responsibility for the


defence of our country and is a supporter of the deterrent. I have


to say to him, though, that I disagree with him on his call for


greater transparency in these matters. There are very few things


that we cannot discuss openly in Parliament, but the security of our


nuclear deterrent is certainly one of them. It has never been the


practice of governments to give Parliament details of the


demonstration and shake down operations. There have been previous


examples where some publicity has been decided on a case by case


basis, informed by the circumstances at the time and by national security


considerations. # Would my right honourable friend agree with me


there is absolutely no evidence of suss tomorrowic failure anywhere in


the system? And would he confirm that he, like me, has total


confidence in our Trident defences as being both deadly and reliable? I


can certainly confirm that. I repeat to the House that HMS Vengeance


successfully certified and has passed the test that was set and has


therefore rejoined the operational cycle and is part of that


operational cycle today. Mr Speaker, I'm grateful to the Secretary of


State for his answers. But I'm just sorry that it's taken allegations in


a Sunday paper and an urgent question to bring him to Parliament


this afternoon. Let me be clear, we are not asking the Secretary of


State to disclose any sensitive or inappropriate detail. All we want is


clarity and transparency. Because yesterday, the Prime Minister


refused four times on live television to say when she became


aware of the details of this missile test. Today Number Ten admitted that


the Prime Minister was told about this incident as soon as she took


office. Yet when she came to this House on July 18 to call on members


to back the renewal of Britain's nuclear submoo reerns, she did not


say a word, not a single word. Mr Speaker, this is just not good


enough. The British public deserve the facts on a matter as important


as Britons nuclear deterrent. They deserve to hear those fact from


their Prime Minister, not in allegations sprawled across a Sunday


paper. Can I ask the Secretary of State a simple question: Why was


this information deliberately kept from Parliament and the British


public? Who made the decision to keep this incident quiet? Was it his


department or was it Number Ten? Whilst respecting the limits of what


he can disclose, can he set out what investigation his departments has


carried out into what happened in June? And what assurances can he


give there will be no future cover ups on important matters like this.


Mr Speaker, at the heart of this issue is a worrying lack of


transparency and a Prime Minister who's chosen to cover up a serious


incident rather than coming clean with the British public. This House,


and more importantly the British public deserve better. Let me just


be very, very clear, neither I nor the Prime Minister are going to give


operational details of our submarine operations or of the systems and


subsystems that are tested through a demonstration and shake down


operation. She asked me very specifically about the Prime


Minister's knowledge. Let me again be clear, the Prime Minister has


ultimate responsibility for our nuclear deterrent. She is kept


informed as to how the nuclear deterrent is maintained, including


the successful return of HMS Vengeance to the operational cycle.


Is the Secretary of State telling us that nothing went wrong on this


particular launch? While accepting that the nuclear deterrent needs to


be shrouded in secrecy, it also needs to deter. Once stories get out


there that a missile may have failed, isn't it better to be quite


Frank about it, especially if it has no strategic significance, as in


this case, it probably has none. Sir Craig Oliver vehementing denies that


he or any other members of David Cameron's media team ever knew about


the aborted Trident test. Will the Secretary of State tell us when Mr


Cameron was told about it, when he himself was told about it, and will


he accept an invitation to attend the defence committee tomorrow


morning to resolve any outstanding issueser in closed session for --


issues in closed session for some questions if need be? As I've said,


the details of the demonstration and shake down operation I am not going


to discuss publicly on the floor of this House. All I can do is repeat


that HMS Vengeance has successfully been certified again to rejoin the


operational cycle. So far as the Prime Minister is concerned, I think


I've already answered the responsibility of the Prime Minister


and made it very clear that the previous Prime Minister and this


Prime Minister are, of course, were, of course, informed about the


maintenance of the nuclear deterrent and the outcome of the test and the


successful return of HMS Vengeance to the operational cycle. The basic


rule of deterrent is it has to be credible and capable. Given


yesterday's sensational revelations, it's safe to assume that Trident is


neither. Given that one of the UK's nuclear missiles Veered off towards


the United States, it really is an insuggest to our intelligence to try


and claim, as the Government has, that it's Trident's capability and


effectiveness is unquestionable. There is however an equally serious


matter to arise, this the deliberate withholding of information from this


House ahead of crucial Commons vote on the renewal last July. It is


absolutely outrageous that this House had to rely on the leak to a


Sunday newspaper to find out about this and the subsequent cover up.


Account Secretary of State tell me when did he first find out about


this missile failure? Was it he who informered the new Prime Minister


about the failure? And who took the decision not to inform Parliament of


this incident? The honourable gentleman is opposed


to the Trident deterrent that has kept this country safe for so many


years. Let me first of all caution him against believing everything he


has red in the weekend press. Let me repeat to him that this government


is in no doubt about the capability and effectiveness of our deterrent


and would not have asked This House to endorse the principle of the


deterrent and our plans to build four new submarines if there had


been any question about the capability and effectiveness of our


deterrent. Would my right honourable friend agree that secrecy and


transparency are simply incompatible and it is right that every British


and indeed American and French government, our other nuclear


allies, have always put secrecy first in this area? I agree with my


honourable friend. As I said to the House earlier, there are very few


issues that cannot be discussed openly in This House, but the


security of the nuclear deterrent is clearly a prime example of something


that cannot be discussed in detail. Can the Secretary of State confirm


that whether through the notice to Gehrman system or other warning


systems are enemies would have been aware of the failure of this test


and would he agree with me that four members of This House to be able to


debate the merits of Trident or its like-for-like replacement


effectively we need timely and security appropriate information and


that we did not get it in this case? On the first point, the honourable


gentleman may be aware that under our international treaty


obligations, and as funny test-firing does have to be given to


other countries and other interested parties and in the case of the June


test-firing, that was done. I do not agree with this latter point. The


government would not have put the motion in front of This House last


July had it had any doubt about the continuing capability and


effectiveness of the deterrent. Can I remind the House that the Russians


do not just contemplate using nuclear weapons, but they practice


their employment and their exercises? Is it not crucial,


therefore, that we retain our own independent nuclear deterrent to


ensure that our potential enemies, such as Russia, our deterrent and


think twice before they even contemplate using such a weapon of


mass destruction? I am grateful to my honourable friend and that indeed


was the proposition that before this new parliament last July and


endorsed by 472 members of This House against a vote of only 117.


117 including, of course, the Leader of the Opposition. As the government


instigated a bleak enquiry to find out who the source for the Sunday


Times was and will it do so? As I said earlier, I am not confirming


speculation in the weekend press and I would caution the House against


believing everything they have read in the weekend press. Could I ask


the Secretary of State whether the MoD and US partners have shared


information about the test-firing and subsequent evaluation? This will


be important to reassure our service personnel and the public in the


validity of the nuclear deterrent. I understand why my honourable friend


has asked the question, but I am afraid I have to say that it takes


us into the detail of the operation of the nuclear deterrent and I am


not going there. Following on from that, the government continually


refers to Trident as the independent nuclear deterrent it the science in


the malfunction was designed, manufactured and owned by the US


with a US guidance system and leasing arrangements. It isn't an


operational issue to tell us whether he has known that the malfunction


last year was reported at the time today's president, or whether the


new president has been briefed about it and nor who decided to cover it


up, the UK Government or the US. Our Trident nuclear deterrent is


completely operationally independent of the United States and, in our


country, only the Prime Minister can authorise the firing of these


weapons, even if they are employed as part of an overall visual


response. Can I congratulate my right honourable friend in the


approach he has taken on this issue? I think that the whole area of our


independent nuclear deterrent is of crucial importance and I think the


arguments he has made very strongly about not being as open as he might


at times like to be on the operational side is absolutely


correct. I am grateful to my honourable friend. It might well be


that earlier governments in different situations, indeed in more


benevolent times, might have taken different decisions about how much


information they were prepared to reveal about these particular


demonstration and shakedown operations. These are not, of


course, benevolent times and the decision would have taken was not to


release any information about the testing of all the systems and


subsystems involved in the operational cycle of HMS venture. I


think there is no doubt as to why The Member For North East Somerset


wanted to have this in private, not just to keep our Zoo Bridge from the


Russians, but to save the ministers and the Prime Minister the


embarrassment. It is worse than a crime. I have known him long enough


to know he is naturally pugnacious and combative in spirit but that


mustn't elide into impugning the integrity of another honourable


member. He has had his bit of fun, but he must now wash his mouth out,


withdraw those words and put a question, for which the nation will


be grateful. I certainly withdraw an implication that the honourable


member was worried about embarrassment to the Minister. Could


the Minister confirm whether it is the case that in the book the silent


deep there is a full description of a previous firing in 2012. How is it


an operational matter or a security threat merely to ask when the


Minister and when the Prime Minister were made aware of the problem and


why they decided to keep it quiet? On the first point, I have made it


clear that, of course, earlier governments in different


circumstances have taken different decisions not to share details with


Parliament, but to release information publicly about the


completion of these particular tests. We have to take our decision


in the light of the circumstances that prevailed at the time and the


National security considerations. So far as his second question is


concerned, I have made it clear that both I and the Prime Minister are


informed of nuclear matters at all times and, in particular, of the


successful return of HMS vengeance to the operational cycle. I welcome


the approach so far from the Secretary of State. These things


should always be super. Will he speculate with me why it should be


that when the debate last was on renewal, neither to do with Trident


missiles, while the should be any suggestion the Prime Minister would


announce this failure? Well, I think I have already said Mr Speaker. The


government would not have brought the motion before the House last


year had there been any doubt about the safety, the capability or the


effectiveness of the Trident missile system. He is right to remind us


that that vote and the huge majority that it secured, that vote was, of


course, on the principle of our deterrent and the government plan to


renew our four submarines. Mr Speaker, the essence of deterrence


is uncertainty about when or whether or if missiles will be fired. Can I


take it that the purpose of the statement today by the Secretary of


State is that he wishes to add to uncertainty and, therefore, increase


deterrence? Well, to take his question seriously, he is right that


the principle of deterrence, of course, is to leave your allies


uncertain as to the circumstances in which you would employed. I have


simply made clear to the House today that the outcome of the test was a


successful return by HMS vengeance to the operational cycle. I am not


prepared to go into further operational details of the tests


themselves. I welcome the approach by the government to this and I also


thank my right honourable friend for his reassurance of the effectiveness


of the Trident system. I wonder if he could confirm that there have


been 160 successful firings of this missile and that surely it reassure


the British people rather more than the prospect of the Leader of the


Opposition haven't his finger on the button. He is right to draw


attention of the House to the previous testing regime and the


House might want to know that the demonstration and shakedown


operation is critical at intervals for demonstrating the effectiveness


of the deterrent. It comprises a comprehensive series of system and


subsystem tests, as I have said, and it provides a period of intensive


training for the submarine crew. It evaluates the complex weapon system


involved in Trident, including the performance of the crew and it


concludes, each time, with an unarmed missile firing. He HMS


vengeance successfully concluded that shakedown operation. As a


supporter of the deterrent, doesn't the Secretary of State understand


that a leak to a Sunday newspaper followed frankly by government


stonewalling does not enhance support for the deterrent, it


undermines it? I can understand why the honourable gentleman, he is a


supporter of deterrent, why he has said that, but the security of our


deterrent is absolutely paramount at a time like this and whether he


likes it or not, I am not going to respond to speculation about the


test that occurred last June and I am not going to give details of the


particular operation of HMS vengeance during the test. Does my


right honourable friend agree with me that the continuing secrecy of


our nuclear deterrent has kept this free from aggression day in day out


since 1968 and that we owe a huge debt of gratitude to the men and


women that operated? I wholeheartedly endorse that. I hope


that would at least be common ground. The nuclear deterrent has


played its part in keeping this country safe through a series of


continuous at sea patrols, seven days a week, 52 weeks a year. I


joined my honourable friend in paying tribute to the crews of all


four of our nuclear submarines. There is now a question about the


effectiveness of our nuclear deterrent. This in itself, is in


terms of what is in The Papers, this undermines our national security. We


need to send a clear message that our deterrent is still able to do


its job. I urge the Secretary of State to accept the invitation of


the chair of the Select Committee, reassure us and the House that our


deterrent is fit for purpose. Let me just reassure the honourable lady


who does follow these matters extremely closely and on the defence


committee, that there is absolutely no doubt about the effectiveness of


our deterrent and, again, had the government had any doubts about the


continuing capability or effectiveness of the deterrent it


would not have brought the motion before the House last July. Would my


right honourable friend agree with me that not only was the Prime


Minister absolutely right not to discuss this on national television,


but that a 90% success rate in testing for a weapon system is


phenomenal and that once it has been tested, all but that go out are


fully operational and 100% capable and this is something we should a


huge tribute to Her Majesty's Royal My honourable friend is right to


draw attention to the importance of these tests and to also hint at the


complexity of the tests themselves, of the systems and the subsystems


that are involved in maintaining the Trident deterrent. I think it is to


the dread it of the crew of HMS Vengeance, they were able to


complete these tests last July and now take their part again in the


operational cycle. Since the minister's not prepared to confirm


very much at all, can I ask him whether he would confirm that each


test of a Trident missile costs at least ?17 million. No, I'm not able


to confirm that either. Thank you Mr Speaker, it is regrettable that the


phrase cover up has been used concerning this, when this concerns


our national security. Would my right honourable friend agree with


me, if things go wrong, the last things you do is give succour to the


enemy by telling them that is the case? I agree with my honourable


friend. It is important that we maintain the secrecy of our


deterrent and it is important for us the, for our adversaries to


understand that we attach the paramount importance to making sure


the operational details of the deterrent are as closely guarded as


possible. I look forward it meeting with the Secretary of State tomorrow


at the defence committee if he's available, would he not agree with


me that credibility lies at the heart of this urgent question today.


Will there be an official inquiry into the malfunction and overall


credibility of how the UK would deliver its weapons of mass


destruction and will there be a further inquiry by the PM could not


answer a question on four separate occasions on the Andrew Marr Show


yesterday. Our nation really does deserve better as does our serving


personnel On the first point, I am uponering the invitation that --


pondering the invitation that I've received to answer questions again


tomorrow as fully as I've been answering them today. I will give


that... LAUGHTER


I will give that further thought. The Prime Minister, of course, did


answer questions yesterday. She didn't give the answer that the


honourable gentleman may have wanted. But she did answer that


question. I want again to be clear with the House, the Prime Minister


who retains the ultimate responsibility and an awesome one at


that for our deterrent, is kept informed as to how that deterrent is


maintained and was informed, of course, as her predecessor was of


the return of HMS Vengeance, the successful return of HMS Vengeance


to the operational cycle. As these missiles get older there are bound


to be increasing maintenance programme costs as well as costs


from I merging and as yet unforeseen threats to the system. What is the


United Kingdom's exposure to these costs of maintaining and protecting


the Trident missile system this side of 2060? My honourable friend draws


attention to the relative age of the Trident system, which I know he's


had some doubts about in the past and probably continues today. But


that is one of the reasons why these tests are conducted every four or


five years, to make sure that our submarines are able to fire the


Trident missile when they return from periods of long maintenance. On


the very specific question, perhaps my honourable friend would allow me


to write to him. As an accident is the most likely cause of the nuclear


catastrophe that we all fear, either by misunderstandings between the


nations or because of human error or because of technical failure. Now


President Trump has his impulsive finger on the nuclear button,


shouldn't our prime course now be to persuade him not to encourage South


Korea, Japan and other small nations to acquire nuclear weapons, thus


magnifying the risk of all by accident.


THE SPEAKER: Especially in relation to Trident testing. I'll do my best


but that might be quite hard. I hope you'll join me with Mr Speaker in


congratulating President Trump on his inauguration and say how much


our Prime Minister looks forward to meeting him later this week. And


discussing the importance of our Nato alliance to both our countries


and the importance of the nuclear deterrent within that Nato alliance.


THE SPEAKER: What the Secretary of State has merit but I was more


inclined to congratulate the young gentleman on the ink newt of his


question. Ingenuity? This deterrent has brought us not only peace since


1968 and rot tection of western Europe but is congrunt as our


position as a permanent five member of Nato. Isn't this all in line with


unicks complaining about the cost of Viagra. A gree.


THE SPEAKER: I am sure it went down very well at the Oxford union.


Thank you, Mr Speaker. The Prime Minister was asked nothing that


compromised security, she was asked what she knew and her refusal to


answer that four times is an embarrassment not just to the


Government but to the United Kingdom. Does the Secretary of State


not understand at a time when the Government is piking cuts in


virtually all areas that to not deal with this misfiring will not make


people believe that the huge price tag of Trident is worth it and that


needs to be addressed. We've had this debate last July in this -- and


this House decided by an overwhelming majority committed to


the plan to build the four new submarines. I've made the Prime


Minister's position extremely clear. She has the responsibility for the


deterrent. She is coped informed as to how that -- kept informed as to


how that nuclear deterrent is maintained including the successful


return of HMS Vengeance to the operational cycle. Like myy of my


constituents -- many of my constituents, I live in the shadow


of a nuclear facility. I want to be certain that those weapons at every


stage of their development are tested to the utmost, even to the


point of failure. Will my right honourable friend confirm those


tests should be secret. For them not to be secret gives aid to those who


mean us harm. I agree with my honourable friend that the vital


importance of keeping this work secret and let me also pay tribute


to the secret work that is done by his constituents working at


Aldermarston and you are field alongside as part of the -- burfield


alongside as part of the importance of verifying the detent. Having been


in Florida for the 2009 firing I know this is not the first time


there's been a media blackout to suit a particular Government's


agenda. That firing was of course carried out by my own husband. The


MoD press statement says that the crew were successfully tested. What


about the missile? How can the nuclear deterrent be certified when


the system has catastrophicically failed? As I said the honourable


lady and I know she has family connections in this area, must not


believe everything she read in the newspapers yesterday. I am not going


into particular operational details, except to confirm that HMS Vengeance


successfully concluded her demonstration and shake down


operation. Mr Speaker, there say huge difference between -- there is


a huge difference between subjects which are of interest to the public


and things in the public interest. Would my right honourable friend


agree with me, whilst intelligence operations, counter-terrorism


operations and nuclear submarine operations are of massive interest


to the public, it is not in the public interest or national interest


to discuss them openly, either in in place or any other place. I


completely agree with my honourable friend. The Secretary of State has


advised us not to believe everything we read in the Sunday newspapers,


but should we believe the White House official who while we've been


sitting here debating has confirmed to CNN that the missile did


autoself-destruct off the coast of Florida and if that is the case, why


is the British Parliament and the British public the last people to


know? It's as I've said, we do not in this House, nor has any previous


Government given operational details of the demonstration and shake down


operation of one of our submarines conducting a test with one of our


Trident missiles. Does the Secretary of State agree with me that a most


important conclusion from this particular missile test is that our


excellent submariners or HMS Vengeance prove they can deal with


unexpected challenges with a ballistic missile system known to be


the most reliable in the world. That should be of enormous reassurance to


the British people. I congrape late the crew on completing their test


and -- congratulate the crew on completing their test and returning


to the operational cycle of the submarines that discharge this duty


on our behalf. But again, I'm not going into operational details. How


can this be an independent nuclear deterrent if on the one hand, Donald


Trump, the President of the United States of America, a man that is


thick as two short planks is given the information and the whole of the


Opposition benches are not allowed it? How can it be independent? The


honourable gentleman knows very well the nuclear deterrent that has


served us so well is independent because its operational control


rests with our Prime Minister not with the President of the United


States. Can my right honourable friend confirm that the full debate


we had in this place six months ago, on July 18, and which was endorsed


by 472 right honourable friends and members was on the principle of our


deterrents and replacing the vanguard class boats, it was not on


a routine test. I can confirm that. It was an overwhelming majority. It


has allowed us now to proceed to start with the construction of the


submarines and I had the honour to cut steel on the first of those four


submarines in October of last year. But I do repeat to the House, had


the Government any doubt at this time of the safety, capability or


effectiveness of our nuclear deterrent, it would not have brought


the motion before the House. Can the Secretary of State tell us what


further Trident missile tests are planned and will he keep the House


updated on the outcome of future tests? These particular


demonstration and shake down operations take place when each of


our submarines emerges from a period of long-term maintenance. So they


tend to take place every four or five years. It would follow from


that there is not likely to be another one in the immediate future.


As, on this occasion, we will of course keep the, keep interested


parties informed as we wrote to the chairman of the defence committee,


the Shadow defence spokesman and the chairman of the Public Accounts


Committee. In certain theatres of war such as


Ukraine, Russia has been testing and refining its electronic and cyber


warfare techniques. I'm not blaming Russia for this interdent, but will


this be taken against possible countermeasures? Yes, I was in


Ukraine last week, discussing this amongst other matters. Of course, we


are taking very good care to ensure that our deterrent is properly


protected against any new technologies that our adversaries


might get hold of. Does the minister not realise because the Trident


programme was approved by the House as a whole, it doesn't mean there


after there should be total silence, either from members of Parliament or


the media. As far as the failed test is concerned, this is not ironical,


but if the information had been given at the time and there had been


no cover up, there would be far less publicity for what is taking place


now. I don't accept that. Previous governments that he supported in


this House have not given details, operational details of previous


demonstration and shake down operations that comprise the major


tests of the systems and subsystems that we've been dealing with today.


Can I commend the reticence of my right honourable friend to get drawn


into this and the reticence of the prime ministers which was entirely


appropriate given the subject at issue. Isn't it ironic to hear


honourable and right honourable members complaining about the


possible lack of credibility of the deterrent and some them don't


actually believe in the doctrine of deterrence at all and it would be


unwise of the Russians or any other potential adversaries to suggest


they can take the risk of invading this or that country on the basis


that we might have in misfire of one of our missiles. Again, I agree with


my honourable friend and we should not forget that there were many in


that particular debate to take the opposite view that we no longer


needed the deterrent. I am pleased that the majority, the overwhelming


majority, of This House from both sides of This House that voted in


favour of renewing the deterrent that has kept us safe for so long.


We now know, despite a refusal to answer on the Andrew Marshall, that


the Prime Minister did know about this. What specific discussions took


place with the Prime Minister about whether to disclose this will


function to Parliament, when it did these discussions take place and how


was it determined it should not be shared and does realise how


inadequate his responses today have been in relation to This House and


to be watching public? It might be that she and members of the watching


public might want and would like to know further operational details of


our nuclear deterrent, but I am not going to assist them. So far as her


specific programme is concerned, this promised, as a predecessor, is


kept informed as to how the nuclear deterrent is maintained and was


fully aware of the successful return of HMS Vengeance to the operational


cycle. As my right honourable friend followed the argument given by some


opposite that perhaps we would have voted differently had this


information being given back in July? Can I tell my right honourable


friend. That is the case? We would not have been influenced by the


result of one out of many tests. Indeed, is there anyone on this side


of the House who would have voted differently had this information


come out? No. I haven't confirmed any information today and have been


careful to try not to confirm any particular information today, except


to one of the House repeatedly not to believe everything that was in


the newspapers yesterday. He is right to remind us that the vote in


July was on the principle of the deterrent and our plans to replace


the current boats with the four new dreadnought submarines. When we


voted in July last year on funding Trident, unfortunately the official


opposition was split. Now, properly informed scrutiny is vital to the


effective and accountable operation of his Department. Is he satisfied


with the level of scrutiny by the official opposition on this matter?


I have been disappointed for some time in the scrutiny of the official


opposition but perhaps my fifth defence Shadow will improve on the


record of her four predecessors. I am sure she will. There is clearly a


balance to be struck. Parliament is rightly keen to know details of the


expenditure involved in replacing the four submarines and that was a


big part of the debate and we will make sure that the Defence Select


Committee and the Public Accounts Committee are kept fully informed as


the board replacement programme continues. Will know of my special


interest in the Royal Navy. Like many of my constituents. With over


160 successful Trident missile tests, isn't it ridiculous for some


people to be claiming that this system does not work? Well, let me


reassure my honourable friend who does take a close interest in these


matters, that the Trident system does work and we are in absolutely


no doubt about its capability and its effectiveness. It will come as


no surprise to the Secretary of State for those of us who live


within the blast zone of fast lane, but we do not share the Secretary of


State's confidence. If he has absolute confidence in the


capabilities of HMS Vengeance and the system, what steps is his


Department taken to rectify the error that caused the aborted launch


itself? As I have already said, HMS Vengeance completed its


demonstration and shakedown operation successfully, otherwise it


would not have been able to rejoin the four broad operational cycle.


Good my right honourable friend confirm that while Devonport


dockyard in my constituency was responsible for the refitting and


refuelling of HMS Vengeance, the Dock Yard is not responsible for the


missiles and weaponry as some ill informed people might think? Yes, I


can confirm that. Thank you Mr Speaker, so far today we have had a


Secretary of State who has told me he doesn't believe in greater


transparency and his backbenchers agree with them. The Prime Minister,


if this test was successful, why did the promise to not answer that


yesterday? I don't understand how he can tell us everything is OK, when


this generation of Trident is not good enough. Our constituents demand


an enquiry. The honourable gentleman and I disagree. I do not believe in


greater transparency in This House when it comes to our nuclear


deterrent. With a resurgent Russia and an unstable world, would the


Secretary of State agree with me that nothing would have heard in the


exchange today undermine the clear rationale for the renewal of our


continuous at the nuclear deterrent to secure the long-term security of


our country? The security of the deterrent and its effectiveness is


underlined by the testing and shakedown programme when these boats


come out of their long-term refit and are being tested again to see


whether they are fit and ready to rejoin the operational cycle. That


is what HMS Vengeance has now done. Doesn't the Secretary of State's


character -- don't tell approach make no sense at all, given that


with the reports we have had, or American and abroad will certainly


be given full details of what happened around this test and that


his stonewalling here does nothing to strengthen our security and


everything to undermine the credibility of This House? This is


our deterrent, carried by our submarines and the secrecy that we


rightly put round it is in our national interest. Would my right


honourable friend agreed that ever since Clement Attlee sought our


first nuclear deterrent without a debate in Parliament, without even a


debate within the Labour Party, successive responsible governments


have always treated these issues with the utmost discretion and we


must not allow the present tortured relationship between the Labour


Party and the nuclear deterrent to change that? I do agree with that.


Previous governments have been very careful to maintain the secrecy of


the deterrent and I think it is important we keep to that. Have


there been any other missile test failures of this type the government


has chosen not to share with the House of Commons? Or should I watch


a White House briefing if I want that information? I am not


confirming particular details of the operation and testing of the various


systems and subsystems involved must all I Kunduz remind the gentleman


that this demonstration and shakedown operation was concluded


successfully, along HMS Vengeance to take it apart now in the four boat


operational cycle. Mr Speaker, to clear up any confusion, can the


Secretary of State share with us, has there been any change in the


approach of the government to informing the sounds of this


demonstration and shakedown operation? No, there hasn't.


Previous governments have not given details, have not given details, of


previous demonstration and shakedown operations to Parliament. The


replacement of the Trident submarine system does not only enjoyed the


support of the majority of members of parliament, it also enjoys the


support of the majority of people in every one of the four nations of the


United Kingdom. On that basis, does the Secretary of State recognise


that the wake this information is coming out, the fact that in the


last hour, Moore has been revealed by the US defence Department than in


this Parliament massively undermined that confidence that we need the


public to have inconsistent? I do not think members of the public


agree and I do not agree. They understand that the effectiveness of


the deterrent does depend on the secrecy that is needed regarding the


detail of that operation. Does might right honourable friend agree with


me that the continuing effectiveness of the system depends upon its


routine testing question mark this is not a secret. A spokesperson for


the opposition was informed in advance. What does damage national


security is to give a running commentary on the success or


otherwise of those tests. I agree with Mike honourable friend. Members


of This House, senior members of This House, were informed of the


forthcoming demonstration and shakedown operation which, as I have


described, involves a series of very complex tests of all the different


systems and subsystems involved. But operation was concluded


successfully. What the Secretary of State has been saying today is that


members of the public in this country have no right to know about


a nuclear missile miss firing, but the people of America and the people


elected as politicians in America do. How does he believe that that


incontinence is any in this system? This is our deterrent, carrying our


missile and it is for us to decide its level of security. That is why I


am not going in to particular operational details and, again, I


caution the honourable gentleman against believing everything he has


been reading in the weekend newspapers. If there is an


investigation into the successful certification of HMS Vengeance last


year, can I have assurances from my right honourable friend, the Defence


Secretary, but that information will remain classified for the sake of


British national security? It will not suddenly remain classified, it


will remain top secret. I information regarding our nuclear


deterrent properly should. The Prime Minister is responsible for our


deterrent and yet again she is not here to account to this Parliament


or to reassure the public or our allies. The Secretary of State has


been asked a times about who knew what and when, what it was the


promised are told, what it was the former promise to told and what it


was a good question I am not asking for operational details, I am asking


for dates. The question was addressed at the honourable


gentleman to me, which is why I am here answering. So far of the Prime


Minister is concerned, I made it clear that both prime ministers who


had separately ultimate responsibility for the nuclear


deterrent -- deterrent, both are kept fully informed as to how that


deterrent is maintained and both were made aware of the successful


return of HMS Vengeance to the operational cycle. Does my right


honourable friend agree with Steve Aiken, a former experienced


submarine commander, she told the BBC this morning that this makes no


difference to the case for renewal and the government is correct in not


commenting on matters which could prejudice our national defence and


certainly not on live television? I completely agree with that. Given


that the Russians had to be informed in advance of this test and given he


clearly would have the capability to monitor the test is he seriously


trying to tell us that our enemies and allies can know what happened,


but this democratically elected chamber must be kept in the dark?


The notice under our international treaty obligations, notice of a


future test firing is given to other nuclear powers, including, in this


instance, to France and, as he says, to Russia. Operational details are


obviously not disclosed. Without reference to any particular test and


the necessary security that must surround each, can he confirm that


the very point of this testing process is to both certified the


crews of Her Majesty's submarines but also to allow Lockheed Martin to


maximise the reliability and lethality of this weapon system?


Yes in essence that's right. The system is tested to ensure the


complex parts and various systems involved are fully understood and


that the crew of the submarine concerned are ready to be able to


operate it. That operation was, as I've said, several times now,


successfully concluded. Mayion of us on these benches share the Defence


Secretary's commitment to the deterrent and for that matter his


concern about national security, but the logic of what the Secretary of


State has said to us today is that there has been a security breach,


it's been this weekend. American officials are now briefing CNN and


British officials secretly are briefing the Guard yand and the


Sunday Times, surely according to his own logic there must be now be a


full investigation in Certainly we deplore the leakage of any


information about the nuclear deterrent. But it is not for me to


comment on what may or may not be happening or said by the United


States administration. This is our submarine, our deterrent. It is our


responsibility to apply to it the very highest security


classification. Would my right honourable friend confirm that no


government has ever routinely reported an operational matters


relating to our nuclear deterrent at any time because to do so would not


only be irresponsible it would also be dangerous? That is absolutely


correct. Mr Speaker, he says media publicity is decided on a case by


case basis, so was the decision not to publicise this test taken before


or after the test? Was any footage taken of the test and were any


journalists present in case the decision was made to publicise it?


The decision on what publicity to give particular tests, tests that


take place every four or five years, is decided by the Government of the


day in the light of the circumstances of each test and in


the light of the national security considerations that apply at that


particular time. They, of course, influence the decision that was


taken last June. Since we have to notify other nuclear powers every


time a missile test takes place, the number is not unknown to them. So


can the Secretary of State confirm to the House that there have been


160 tests of the Trident missile system and if he can, won't that


give our constituents full confidence that the system provides


us the deterrent that we need? I think my honourable friend is


broadly correct about the number, but if I'm wrong about that I hope


he will allow me to write to him and give him the correct figure. The


Government has every confidence in the Trident deterrent system. Again,


we would not have brought the motion before the House if we'd any doubt


about it. Despite the Secretary of State's refusal to clarify, it is


commonly understood that the missile went the wrong way. Now I'm no


expert, but that strikes me as a major flaw. And friendly fire with a


nuclear weapon is not exactly what the Secretary of State might be


looking for. Can the Secretary of State at least tell us whether the


new Trident missiles will have better guidance systems? I'm not


able to confirm the speculation in which the honourable lady is


indulging about the root of the missile that was fired. Would the


Secretary of State agree with me that much as there is no doubt of


the valour of the men and women of the Royal Navy who keep us safe,


that Coke wally we must use discretion when talking about


weapons systems they use to keep us safe? Absolutely. I think we owe it


to those crews on whom an obligation of secrecy is placed, indeed for


their livetime, we owe it to them not to break the security


classification of the information surrounding the deterrent or to


treat that information in any frivolous way. The Secretary of


State has been quizzed by members for over an hour now. I've not heard


any member ask for any operational details that might compromise


national security. We simply want to know - was this test successful or


not? And his refusal to answer that question when his counterpart across


the Atlantic is answering it, surely is giving credence to the concerns


that it was not successful and as well as not being a deterrent the


system simply may not work. I think when the honourable gentleman reads


the account of today's proceedings he will see that I have been asked


for all kinds of different operational details, but let me


repeat to him that the demonstration and shake down operation of which


this was one of a number of tests was concluded sat factorily. Many


residents of my constituency, some of whom live within 13 miles of


Faslane, are extremely angry because of this Government's lack of


transparency on this crucial matter. Can the Secretary of State ensure


the House that any significant problem relating to future test


firing will be reported to the House at his earliest convenience or do


with ehave to wait for the Sunday Times to confirm it? I those who


work on our behalf at Faslane are very much aware of the importance of


the secrecy with which they naturally have to concur. They


understand that obligation. Even though he doesn't, I think they too


support the importance of the deterrent.


THE SPEAKER: Order. Well, I shall take this point of order from the


originator of the urgent question if it relates exclusively to the


matters under discussion. Not in the attempt to continue the schaengs but


new information with which the honourable gentleman thinks the


House should be favoured. Point of order. It has become apparent


throughout this debate that there are US officials now briefing more


detail than has been given by the Secretary of State today. He's


hidden behind secrecy for the demonstration shake down, even


though his own department authorised a book last year giving a full


description of what happens. The chair of the Select Committee made a


generous offer I thought to actually offer him to come before them. How


can Parliament actually hold this department to account for this


issue, if it is not going to even take up the generous offer which the


right honourable gentleman has made? THE SPEAKER: I thank the honourable


gentleman for his point of order. I would simply say that the Secretary


of State will have heard the right honourable gentleman the chair of


the Select Committee, extremely diligent and extraordinarily


intelligence and persistent chair of the Select Committee, whom I've


known a damn sight longer than the Secretary of State has known. How


the Secretary of State wants to deal with the right honourable member is


entirely a matter for his judgment to exercise to the best of his


ability. We'll leave it there for now. To pick a fight with the


chairman of the Select Committee is a rather stupid thing to do.


THE SPEAKER: Order. Statement the Secretary of State for business,


energy and industrial strategy. Thank you Mr Speaker. Mr Speaker,


this is a hugely important moment for the United Kingdom. A moment


when we must prepare a new strategy to earn a prosperous living in the


years ahead. Leaving the European Union allows and requires Britain to


make long-term decisions about our economic future. We will, of course,


be ambitious in the upcoming negotiations and will secure the


best possible access tore firms to trade with and trade in the European


market. The competitiveness of our own economy is important. That's why


the Government is committed to a modern industrial strategy. Its


objective is to improve living standards and economic growth by


increasing productivity and driving growth across the whole country.


Today's green paper is part of an open dialogue to develop this


strategy as the enduring foundation of an economy that works for


everyone. Now Mr Speaker, we start from a position of considerable


strength. We are the fifth biggest economy in the world, despite having


the 22nd highest population. We've achieved higher levels of employment


than ever before in our history, in fact 2. 7 million more than in 2010.


We have businesses, research institutions and cultural


achievements at the very forefront of global excellence. For all these


reasons, we attract investment and talented individuals from around the


world. But there are challenges that Britain must face up to now and in


the years ahead. The first is to build on those strengths and to


extend that excellence into the future. British excellence in key


technologies, in professions, in research disciplines and


institutions provide us with crucial competitive advantages. But we can't


take them for granted. If other countries invest more in research


and development and we don't, then we Cabinet expect -- can't expect to


keep our technological lead in key sectors. The same goes for our


record, as Europe's leading destination for inward investment or


opposition as a centre for finance. Our competitors are upgrading


infrastructure networks and reforming systems of governance. We


too must strive for improvement. In industrial sectors from automotive


and aerospace to financial and professional serviced and the


creative industries, the UK has a global reputation, but the


competition for new investment is fierce and unending. The conditions


that have allowed UK investment destinations to succeed include the


availability of supportive research programmes, relevant skills in local


labour markets and capable supply chains. For continuing success,


these foundations must be main tands and strengthened. -- maintained. The


second challenge to make sure that we work to close the gap between our


industries places and people and those that are less productive. For


the global excellence of the UK's best companies, industries and


places we have too many who lie behind the leaders. That's why on


average workers in France, Germany and the United States produce about


as much in five days as UK workers - as much in four days as UK workers


do in five. It's why despite having the most prosperous local economy in


northern Europe in Central London, we also have 12 of the 20 poorest


among our closest neighbours. We must address these long tales of


underperformance if we are to ensure sustainable growth in living


standards. To do so is a huge opportunity for the whole nation to


benefit from improved productivity, which is to say earning power in all


parts of the country. The third challenge is to make the UK one of


the most competitive places in the world to start or to grow a


business. A fatal flaw of 1970s-style industrial strategies


was their dominant focus on existing industries and the companies within


them. Then mostly the bigger firms. Too often they became strategies of


incumbency. It's worth noting that many of the most important companies


in the world today didn't eeb exist 25 years ago. Unlike in the past,


industrial strategy must be about creating the right conditions for


new and growing enterprise to thrive not protecting the position of


incombens. To meet these challenges, we've identified ten pillars around


which the strategy is structured. That is to say, ten areas of action


to drive growth across the economy and in every part of the country. To


invest in science, research and innovation, to further develop our


skills, to upgrate infrastructure, to support businesses to start and


grow, to improve public procurement, to encourage trade and investment,


to deliver affordable energy and clean growth, to cultivate world


leading sectors, to drive growth across all parts of the country. And


to create the right institutions to bring together sectors and places.


Across all these areas, the Government is taking strategic


decisions to keep British business on the front foot. For instance, the


go ahead for major upgrades to infrastructure, such as Heathrow,


and high speed two, in the Autumn Statement, the biggest inacross in


research and development spending since 1979. In conjunction with


today's green paper, we're launching a range of further measures. They


include a gnaw preach to enabling existing and emerging sectors to


grow through sector deals with reviews taking place regarding life


sciences, ultralow emission vehicles, industrial digitalisation,


nukeler and creative industries. To decide on the priority challenges


for the new industrial strategy challenge fund and to embark On Tour


overall of technical education, club capital funding to set up new ibs


tugss of technology, to deliver education in science. In a world


containing uncertainty, public policy should aim to be a


counterforce for stability not to be an additional source of


unpredictability. Our aim is to establish an industrial strategy for


the long torm, to provide a policy framework against which major public


and private sector investment decisions can be made about


confidence. It's vital that the development of our strategy should


take place with and not just for British enterprise. The full


involvement of innovators, investors, job creators, workers and


consumers in England, Scotland, Wales and Northern Ireland, is the


only base is on which we can produce an enduring proemgra of action.


That's why this is a green paper, a set of proposals for discussion and


consideration and an invitation to all to contribute collaboratively to


their development. Mr Speaker, I commend this statement to the House.


Thank you Mr Deputy Speaker. Thank you to the Secretary of State for


his statement on at this location. Mr Deputy Speaker, today would be a


moment this day if it was indeed the day that the Conservative Party


finally broke free of the free market fundamentalism that has


dogged them and of the country for decades. Will the Secretary of State


tell us whether the new, active role for the state means the government


is abandoning the approach of the last Prime Minister and Chancellor


and his predecessor who banned the term industrial strategy from the


previous Department? If so, I will make clear at the outset, that we


welcome that, alongside the good intentions set out in the Green


Paper today. The question is whether the details will live up to them.


For example, action and skills will be welcomed given the challenges


provided by automation and the pace of technological challenge and


change. This government have already cut adult education by more than ?1


billion. Can the Secretary of State is then how ?170 million of one-off


capital spending can even begin to close the skills gap? Nor will the


government be equipped to support an industrial strategy if his


predecessor's cuts are implemented. Can he confirm the 2020 project has


now been thrown into the bin along with the rest of his predecessor's


legacy? He sets of the goal of developing a competitive edge in


industries of the future, but how does he reconcile this with his


government's plan to privatise the green investment bank? If the


Secretary of State is serious about tackling the product of the crisis,


will he finally bring investment in R and infrastructure in line with


the Secretary of State promise a fundamental rethink of business


rates which many businesses say would help them much more than and


other single measure? And does he agree that a successful industrial


strategy must include partnership and cooperation with the workforce?


Yet the Green Paper doesn't mention trade unions once. Surely now is the


time to promise that the toxic trade union Act will be repealed. Steel is


a critical sector for our future but it is only mentioned once. Will he


commit to implement the recommendations on procurement and


supply chains contained in the all-party Parliamentary group on the


out today? Because we cannot let our focus to high-tech manufacturing, Mr


Deputy Speaker. An industrial strategy that narrows its focus to a


future was sectors will let them the majority of businesses in this


country and the people they employ. Can he tell us what this industrial


strategy will do for small and medium enterprises who are huge


employers for financial services which are our main exporters, for


foundation industries or retail outlets that shape our high streets


up and down the country? Finally, there is a glaring inconsistency


between the noble aims paper and the threats made by the Prime Minister


to turn Britain into an offshore tax haven if she feels in her Brexit


negotiations. The industrial strategy has consisted of one of the


made in secret with Nissan. If that be didn't last six months, how can


business be confident of the other commitments in this Green Paper? It


is often said, correctly, that an industrial strategy is a long-term


project and that is what that must outlast particular governments. I


can put our support for its broad aims from this side of the chamber,


but I feel compelled to ask, can the Secretary of State can't on the same


from his own side? When we debated the industrial strategy here one of


his own honourable friends said they had two problems with it, one was


industrial and the other was strategy. I hope the Secretary of


State faces down such attitudes because now is not the time for half


measures, Mr Speaker. The BBC reported this morning that the


government want to be in the driving seat but not up to hands on the way.


I look members opposite do not like safety legislation, but that is not


an approach I would recommend if you keep making U-turns. If the


Secretary of State and himself isolated in the coming months, my


party will be happy to help. We too are ambitious for a proper


industrial strategy, but it will only succeed if the means match at


the end. Thank you very much indeed, Mr Deputy Speaker. It is true that


an industrial strategy that wants to help all parts of the United


Kingdom, I look forward to engagement with colleagues on all


sides of the House you can represent the views of their constituencies. I


have to say, I find myself relieved that the honourable gentleman is so


grudging in his support for this, given that the last time he appeared


at the dispatch box he said, and I quote, we on this side of the House


the public good, Private bad. A disastrous signal to the investors


that we want to invest in this country. I am pleased to be on the


other side of that particular argument. When it comes to the


points and the questions that he made, the commitment to transforming


our technical education is one of the things that has been most widely


welcomed by the business community up and down the country today. Given


that this is a Green Paper, it is highly unusual for a Green Paper to


commit any funds. This is about the consultation on the direction and


the fact that the Chancellor has announced ?170 million for Institute


of Technology is a great step forward. In terms of research and


development, he asks about increasing the level of research and


development, he might have missed when I said, in which the Chancellor


has committed the biggest increase in research and development since


1979. 1979, I recall as a period that included several years of


Labour government, so by implication, it was a big increase


that took place during the 13 years of Labour government. On business


rates, we on this side of the House are legislating, putting forward


legislation, this afternoon to have 100% retention of business rates by


local councils so the interest of local businesses and the councils


are aligned. He asks about the workforce. I was clear that the


consultation is with employees as well and I am looking forward to a


roundtable with the trade union Congress and its member


organisations and Steve. Honesty he will see in the paper and approach


to sector deals. I have already met with the chief executives of the


steel companies and I am about to meet with the trade unions and look


forward to that being one of the deals that is being put forward. He


asks about involving small business. I should say that the chairman of


the Federation of Small Businesses today has said the FSB has


appreciated being part of the discussions with Business Secretary


to ship the industrial strategy and it fits well with the small business


community. It carries their endorsement. As far as the


honourable gentleman's position on the fiscal arithmetic goes, he


should reflect on the fact that the first foundation of any credible


industrial strategy is confidence in the public finances that were left


in such a disastrous state during the time that he was in government.


As far as the unanimity of purpose goes, as far as the industrial


strategy goes, as far as I understand from the port in recent


days, he is having a consultation with himself about whether he can


support his own party's position and trigger Article 50. In terms of the


consultation we are engaged in, we will be looking forward to responses


from all parts of the House as we form a strategy for the years ahead.


Can I congratulate my friend on an intelligent approach set out in this


Green Paper, building on what has been achieved over the last six


years, but taking it much further in skills, signs and in the woods and


powerhouse. Can I ask about universities sector which, of


course, is a jewel in the crown of British industry and stop the new


sector will be opened up just as in the 19th and 20th century we opened


up universities to the arrival of London University and the redbrick


universities. It now faces opposition in the House of Lords


from people who represent the existing players and that sector.


Will he reassure me he will see off proposition? Let me say to my


honourable friend that he will see in the approach we are sitting


forward here a vigorous continuation of many of the measures, such as the


northern powerhouse, that he championed in his time in government


that is making such a big difference in the north and in other parts of


the country. I can confirm that, with my honourable friend and our


colleagues in the House of Lords, we will drive the reforms that have


proven so successful in the past in expanding the institutions that


contribute to our higher educational excellence. The standard and is


standing of higher education in this country has never been higher and


that is a reflection of the sounds of the policies pursued in recent


years. Can I give a cautious welcome to this proposal. I think it is on


us in some ways in its reflection of the state of the economy, in other


ways it is brutally honest in terms of the problems such as the regional


disparity and the problem of productivity. It recognises some


successful sectors, automotive, aviation and Aberdeen as an oil and


gas hob. In terms of these problems, which are not new, how can he ensure


these same mistakes are not repeated and in support of new industries,


how will he ensure existing ones are not sacrificed in that process


question mark when it comes to research and development, the new


money that has been allocated, can he confirm that will be in addition


to anything that would have come from the European Union and will


give long-term commitment to match European Union funding? Can he


outlined how much of that spending will be outside of London and the


south-east Finland? In terms of regional disparities and EU


structural funds, imagine how much worse that regional disparity would


have been without those funding streams. Can he commit to long-term


replacement for those funds? When it comes to renewables and carbon


capture and storage, you will not be surprised I am disappointed by the


lack of ambition in what will be an industry worth hundreds of billions,


if not trillions, of dollars in the near future. When it comes to


sectoral dealers, will he consider one for renewables and will he work


with the Scottish Government in terms of how that can be done in


Scotland? Access to finance is identified as a problem, I shared


the concerns about the green investment bank, it is short-sighted


to sell off when one of the key industry sectors need access to


funding and that is the perfect vehicle to do it. Can I ask about


the consultation and how this process will work with the devolved


governments? Finally, however that this industrial strategy might be,


we have to accept that the biggest threat to the Scottish economy and


the UK economy is a lack of access to the markets and the skilled


people that come through our EU membership. Will he give serious


consideration to the Scottish Government plans that would see


Scotland maintain its membership of the European single market? Can I


thank the honourable gentleman for his thoughtful opening remarks and I


am impressed he has got to page 91 already in this document. It shows


his diligence. He is right in saying this is brutally honest. If you are


going to look to the future and have an industrial strategy that reflects


on the challenges that we have then you need to be clear eyed about it


and, when it comes to the force of technical education, for example,


when it comes to the imbalances that we have, some very prosperous areas,


some that can catch up, then it is right to be ambitious. When it comes


to research and development of the honourable gentleman mentioned, the


money the Chancellor announced in the Autumn Statement was separate


from whatever might be decided on the European funds. It was


independently granted and is available to universities and


research institutions through that. The consultation on how that money


is spent is part of the consultation on this exercise. It is for research


and development and one of the points we make is that we have often


been excellent at producing brilliant new ideas, but less


successful at commercialising them. So, to push further on how we can


translate good ideas into practice is a very important feature of that.


He mentions renewables, very important in Scotland, of course.


The emissions reduction plan that is in preparation at the moment will


address that particularly, but the commitment that we have in a chapter


of the Green Paper on the green economy has a big commitment to


doing what we can to make sure that we obtain industrial advantage from


the investments we are breaking in green technology. Finally, he


mentions what he regards as the biggest threat to the economy as


being the exit from the European Union. I would say to him, the


United Kingdom economy has been very successful in recent weeks and I


would suggest the biggest threat that would be if that successful


alliance of our There is so much to welcome in this


very thoughtful report and I congratulate my right honourable


friend and his team for delivering this. When it comes to


infrastructure, could he say more about how this unprecedented


investment in infrastructure our Government is making will deliver


export growth? He I'm sure will not be surprised but may be disappointed


to know that our export potential particularly from our rail


independent have -- our rail industry is outstripped. My


honourable friend knows how important making connections are


between places. It is a very important means to provide the


under-Pinocheting of growth. She will be aware that through the fund


that has been established, the national infrastructure fund, this


will rise by 60% from this year to 2022, that is a huge investment and


appropriate one to make sure that the quality of our infrastructure


keeps pace with the investments our competitors are making. May I warmly


welcome and support Government endorsement of an industrial


strategy that is long-term and interventionist. I hope it will play


an active role in ensuring workers are upskilled and receive high wages


and that British firms can scale up and become more enterprising,


competitive and productive. May I ask the Secretary of State what's


different this time from previous it ragss of industrial strategy,


include those of which he was a Cabinet minister. What will be the


short-term, medium and long-term metrics by which this will be


evaluated in terms of success or failure? I'm grateful to the


honourable gentleman for his welcome. He says it's an


interventionist strategy. It's true I think the Government should be


engaged with the economy to make sure that we have the right


conditions for success. But I would also point out the real importance


of making sure that the openness, that the ability for competition to


have its full run in our economy is vital to our success. I know as


chairman of the Business Select Committee he will reflect that. I


look forward to the Select Committee's inquiry on this. He asks


how it's different from its predecessors. I would suggest two


ways in particular. One is he will have observed that the, many of the


themes that I've talked about are not about investing in particular


companies or subsidising particular businesses. But they are


cross-cutting, they're horizontal, if you like. ,. . They're looking at


skills across the economy, looking at infrastructure, look being at


importance of place and differences between places, of science and


research. So they are looking at cross-economy measures. That is a


different approach from that has been taken in the past. The second


thing I would draw to as attention, a lot of efforts in industrial


policy in the past have been correctly about innovation but have


concentrated just op new discoveries -- on new discoveries and new


inventions. That's very important, we need to extent our excellence


into the future. But there is a big opportunity to make differences for


the following companies and the regions that are not competing at


the top level. If you can really increase productivity there, you can


make a big difference to the whole economy. That hasn't been the focus


of previous industrial strategies. May I congrape late my right


honourable friend in a bold and ambitious statement. May I give him


a unique, once in a lifetime chance to get his technical college, his


new training plans off to a really tremendous start. In Haywards Heath


in my constituency, there is a sixth form college bankrupted by Labour's


ferocious education cuts and corporate governments that will have


done credit to Al Capone. It lies empty. It would be a perfect


starting place for one of his excellent new colleges. I'm grateful


for the early pitch from my right honourable friend he highlights that


it's very important that we should have right across the country a


better and more reliable ability to give technical education to those


who can benefit from it. There are pane jobs that are available in West


Sussex, but are not accessible if people don't have the right skills.


This will help solve that. I welcome the Government's acceptance finally


that we have got a skills challenge in this country, particularly with


the long trail of underachievement. How does the Secretary of State


square this with the huge cuts faced to further education and adult


education over the last six-and-a-half years of his


Government? And why isn't there more emphasis on what can be done to


really close that productivity gap if we invest in child care and get


more women back to work, not even mentioned in his report? The first


thing, as I said to her friend on the frontbench, the task that the


Conservative-led Government had in restoring Sanity to the public Fire


Services is -- finances is foundational to a successful


strategy. She will be aware in the field of child care, this Government


has been particularly innovative in extending child care to large parts


of the country, many people who previously were not able to access


child care and that is an important foundation on which we build. Would


my right honourable friend agrow with me that many of the highly


impressive propositions on technical education within this green paper


owe their owe gin to the work undertaken by our honourable friend,


the member for Grantham when he grew up -- drew up the skills plan laid


before the House in July. Would he full agree with me that the success


of specialist maths schools at Kings College London and Exeter university


is an example that other universities should follow if they


hope to hang onto their current high level of tuition fees? What I would


say to my right honourable friend is first of all, to endorse warmly the


acknowledgement that he makes to our honourable friend the member for


Grantham and Stanford. He made a massive contribution. He's


absolutely right, in fact I text him yesterday to flag that many of the


proposals there owe their owe gin to our honourable friend. We wish him


well in his recovery. I commend very warmly the examples of the maths


schools that my right honourable friend friend mentioned. To expand


maths schools across the country so that people with a real flair for


maths can be pushed further and be equipped to go even higher in their


ambitions I think is a fantastic thing, whether it's in Exeter or in


London, they are a good template for others to follow. My right


honourable friend for Manchester Central pointed this out, isn't one


of the things that has held industrial strategies back in this


country for decades has been the skills gap? In the green paper that


the Secretary of State has brought forward, there's mention of an


overhaul of technical and reindicational education. Can I say


to him, I think what this country needs is a cultural change, a shift


to valuing technical and vocational education and skills education as


highly as academic education. Until that changes, the Secretary of State


will not achieve what he wants, however much all of us want him to.


I agree with the right honourable gentleman's analysis. I hope he'll


join with us in making that change. I hope he will approach this with a


spirit of both optimism and determination to make that change


that the country needs. I very much welcome this common


sense statement. Does my right honourable friend agree with me that


the pillars will provide the ideal opportunities to enable regions to


use their assets to the best effect for more balanced UK economy? And


also further grow the Midlands engine for growth? I do agree with


my honourable friend. We are one of the most centralised countries in


the world. But it is patently the case that our levels of prosperity


are not uniformly high. I think we should learn from other countries


and learn from what has worked well when we have devolved powers and


given people who know what is going to make a difference locally, a


better ability to take those decisions. The minister's right to


make upgrading infrastructure a pillar of his industrial strategy. I


welcome the investment in HS2, how can he claim to be providing greater


certainty and a clear long-term direction when the East Midlands top


transport priority, electrification of Midland main line has been


paused, unpaused, delayed by four years and now dropped all together.


Doesn't he understand that it follows up the previous question


that this uncertainty damages our economy, damages the East Midlands


industry and actually harms its potential to grow exports? I would


have thought she would welcome the commitment to upgrading


infrastructure across the country, right across the country. This is a


green paper that is proposing priorities for the years ahead. I


would hope that she would welcome that. As well as welcoming the fact


that there is a 60% increase in the investment in infrastructure that


the Chancellor has provided, which will be of benefit I hope to the


East Midlands and other parts of the country. I strongly welcome this


paper in particular three elements of it, the battery re -- review, and


the considerable efforts to create a hub for autonomous vehicles. Those


three together should give the UK the opportunity to become one of the


world's leading producers of the electric and autonomous vehicles


that we will all be driving 20 or 30 years from now? I agree with my


right honourable friend. What is important, what is the opportunity


of an industrial strategy is to align policies that reinforce each


other. We have some of the world's best researchers in energy storage.


We have one of the world's most effective and efficient and


innovative automotive sectors. We are one of the leaders in renewable


energy through offshore wind. If you bring them together, then one


reinforces the other and gives us this chance to be a world leader in


a set of technologies that seems likely on any reasonable estimate to


be taken up around the world in the future. The last thing we need is


10% tariffs imposed on autonomous vehicles. The Secretary of State is


right to make the point that we've been the leading destination in


Europe for overseas investment, but much of that was from companies


outside Europe wanting to gain access to the single market which


the Prime Minister's now told us we're going to leave. Does he


believe that the UK can remain Europe's leading destination for


inward investment outside the single market? Yes, I do, Mr Speaker. What


I said right at the beginning of my statement was that as a Government


and as a country, I hope, that believes in free trade, we want to


have the best possible access to the single market and we continue to be,


as I said, a very attractive destination but we want to be even


more attractive, which is why to set out the commitments that we're


making on upgrading or science and research, on building better


technical skills for example, on improving our infrastructure, these


are investments. These are policies that will enhance the reputation and


attractiveness of the British economy. Will the Government, under


this new strategy, when reviewing procurement make sure that we find


all those areas where British companies could supply better and


cheaper and give them the contracts. At the moment, we're importing large


quantity of military vehicles, building materials, steel for


submarines, medical equipment, things that we could make


competitively here if we have an intelligence Government customer. My


right honourable friend is right. He will see various proposals on


procurement which I hope will have his support. One I emphasise is


opening up Government procurement to smaller and medium sized enterprises


who too often find that the bureaucracy associated with


procurement regimes in the part has literally kept them off the list.


That is something we can reform. The green paper rightly identifies the


crucial role that better connectivity to regional airports


could play in growing economies and highlights the vital importance of


the route from Newcastle airport increasing imports from the


north-east. Could the Secretary of State confirm what discussions he is


having with his Treasury colleagues about devolving Air Passenger Duty


on airports like Newcastle? I think in the context of a Green


Paper on industrial strategy I will with the representations from the


honourable lady. I am pleased she acknowledges and recognises the


emphasis we have placed on connection is not just through road


and rail airport connections to every region of the country and the


importance of establishing links to other nations with which we have


good trading relationships. Could I ask my right honourable friend how


much priority he gives to the establishment of a digital real way


and will he encourage network in their plans to bring this technology


to the great Eastern Main line and hopefully the West Anglia mainline


as well? The nutrients which are on order can be equipped in advance to


take advantage, rather than be fitted retrospectively at great


expense. -- the nutrients. He is right and it is one of the proposals


in the Green Paper I hope will have his support the concentration. The


Green Paper rightly focuses on productivity, but there is one area


of infrastructure where Britain lacks behind all our competitors and


that is with the cost of childcare. Childcare in Britain costs more than


every other OECD country apart from Switzerland and takes up over 40% of


the average wage is up yet, it is hardly mentioned in his Green Paper.


This is the way to liberate the talent of women. What will he do


about it? It is a Green Paper that invites comments and proposals and I


look forward to the honourable lady's response to the Green Paper.


As I said, this government has taken seriously the importance of


childcare in allowing women and men to return to work. We have made good


progress in it, I would be interested in her response to the


consultation. I welcome the opportunity to join the Secretary of


State on his visit to the Warwick Manufacturing group on Friday. An


institution which represents many important elements of this


industrial strategy. Would my right honourable friend agreed that the


Midlands can play a leading role in the development of such a strategy


being home to world-class research, advanced manufacturing in the


skilled workforce? I agree with my honourable friend. One thing I found


striking in visiting the National automotive innovation Centre, a


fantastic centre that is being built, is the fact that, as well as


having research and development facilities that will be available to


large but also small challenger firms, there is, on the same side,


is good for apprentices that will take in 1000 apprentices every year


to equip them with the skills that the motor industry across the West


Midlands can benefit from. That is a good example of how research and


development can tie up with this agenda of driving improved standards


of technical skills. If the Secretary of State is serious about


building an industrial strategy that works for the whole country and one


which encourages and maximises the opportunity for research and


innovation, debt must be space in that for the development of marine


renewable energy, wave and tidal power. The word leading work in that


is being done in my constituency at the European Union Marine energy


Centre, can he come and see for himself the way in which our island


communities can help them build a strategy that he says he wants to


create? I would be delighted to visit his constituency. He will see


when he reads the Green Paper, I know it is quite a time commitment,


but I am sure it is worth it, there are a number of sources of support


for innovation. The competitive way, the research and development funding


is available for scientists and researchers to bid for. He will also


note there is a chapter on the green economy that is making a suggestion


as to how we can get industrial advantage as well as keeping costs


low from our renewables. Both routes might be applicable to the green and


tidal technologies. I have been calling for ambitious, bold and


visionary redevelopment plans for the power station planned to attract


businesses that will create highly skilled jobs. Can I welcome his


statement on the Green Paper and does he agree with me that the new,


modern industrial strategy will provide the framework and conditions


to help deliver this vision? I am grateful for the question. I


remember visiting the site with and I think it has great potential to be


a home for not just the start up businesses that are very important


in our economy, but also as a place in which technical skills can be


imparted to the next generation of her constituents so they can have


good, well and satisfying jobs. I welcome some of the things in the


Green Paper, looking at the future of industry and our strategy moving


forward, however, in order to do that we have two secure what


industry we have now. In light of the comments from the CEO of Nissan


saying he would revisit the competitiveness of the plant in


Sunderland, could the minister tell us what his view is on that in


securing the jobs in Sunderland that already exist? Well, the decision to


back Sunderland and to build the two new models here was a very


significant moment for her constituents and for the country. It


is true to say that all investors, domestic or international, will


constantly look to make sure that they are competitive and what this


document, every page of this Green Paper, does is show our


determination to make sure that this economy is competitive now and into


the future, to take the actions that will make it so. May I welcome this


wide-ranging discussion of government policies at this time?


Even if the broad survey of good things outlined will unleash a


torrent of insatiable demands, not least from the Davos business


leaders jetting back with their government advisers to barge their


way to the front of the table. Will my right honourable friend assure me


that his agenda will be set by entrepreneurs? Would he be honest


that for every sector that is favoured Adobe sectors of the


economy that we can and will he assure me that he understands that


in his Department there are no magic levers saying raise productivity or


improve skills? The eluded his predecessors, they will likely elude


him. In order to get running can have brevity in questions and


answers? By honourable friend is right. What I would say is the


essence of our strategy has to be to support the ability of people to


compete and enter and make life difficult for the incumbents. There


are no cosy club's for the incumbents. That is the test of our


support in sectors as to whether this helps new businesses emerge.


That is extremely important. The Federation of Small Businesses


reported last year that significant numbers of women are starting small


businesses and enterprises. Is he not therefore surprised, as the


House is, but there is no mention of women in this industrial strategy,


no mention of inclusion and very little mention of diversity? Will he


undertake to review that? To this document we want to close the gaps


that mean we do not achieve powerful performance and that is absolutely


the case when it comes to the position of women at the highest


levels in science and research. As minister in the Department in the


past I have been successful in driving the appointment under my


gift to increase the proportion of women at the top level. She is


absolutely right, when there is an underrepresentation of people of


talent it is the whole economy that suffers from that and that should be


corrected. I strongly welcome the statement and consultation paper


today. When you visit large and innovative manufacturers like Toyota


or Erebus, they all speak about the importance of relationships with


their local further education colleges. Does he agree with me one


of the objectives of the strategy should be to replicate the examples


of excellence and drive up standards within the further education sector


is even more employers share in world class skills education? He is


right and one of the proposals on which we are consulting is to have


better connections between local employers and further education to


nature that the skills that are being provided are those that can be


taken up immediately in those industries. I very much welcome the


statement by the Secretary of State and his indication that he will work


across the country, including the devolved administrations. On the


issue of skills and low-carbon, we both want to see low carbon energy


sector being successful. He mentions nuclear. One of the concerns that


nuclear workers have is that the conditions have been undermined by


this government. Will he agree to work with me and meet with me to


discuss this issue because we need those skill bases to build on for


the future? I am grateful for his welcome and I didn't say to the


honourable gentleman on the front bench for the SNP that part of our


proposals is that we will work closely with the devolved


administrations in all parts of the United Kingdom and I look forward to


doing that. I am always happy to meet with the honourable gentleman.


I certainly take great pleasure in welcoming the character and ambition


of this industrial strategy. It is exactly the right direction of


travel. I also salute the focus on technical skills. Does he agree it


is important to create the correct pathway through our schools systems


to those institutions so we encourage young people from the very


start? That is a combination which will lead to higher wages and high


skills. The honourable gentleman, the chairman of the Education Select


Committee, is right. I hope he and his committee might make a


contribution to the consultation to help us as we establish precisely


that pathway that start in school but actually goes beyond the


commencement of work, because people often need to retrain and take on


new skills during their working life. I welcome the desire to


transform technical education, something of a recurring theme ever


since the days of Prince Albert. Trying to help make it a six as this


time, could he pay greater attention to the 14 to 19-year-olds,


university and technical colleges like at Aston University and could


persuade him to also give the training levy to the newly elected


regional mayors, because then they can make strategic training


decisions which are appropriate for the regions they represent? She


makes two important points. The first is it is vital and others in


the past have recognised the importance of technical education


and improving it. That is certainly our intention. In terms of the


particular proposal she makes, if she would like to discuss it with


me, she might want to feed into the consultation. Where does the crucial


role of free markets said in this strategy? It runs through every page


of this strategy. Newport has suffered grievously from


the neglect of steel. It is now having a mini revival with the


reopening of sight. Stephen does not travel well or cheaply. Does he


agreed that if there is to be a new prosperity for manufacturing


industry to be created, it must be constructed on foundations of


Stephen? What I say to the honourable gentleman is that Stephen


is a very important sector. It needs to compete in the world in which we


find ourselves and the discussions I have been having with the steel


industry is that they are based around a strategy that they are


pulling together to make British steel and competitive in the years


ahead. The new model in the Hereford University has received tremendous


support from its departments. This ?170 million promised in this


statement, will it be too late for Herefordshire as we have only got to


the 20th of January to apply for funding? By honourable friend is


right to point out the Christians of his friends and neighbours in


Herefordshire in making their proposal. It is a good example of


precisely the reform that we need to see. I think the prospects are


pretty bright for it. There was no mention of exclusion and communities


like Ashley which still mourning the loss of those well-paid jobs in the


pits. I understand that this is a Green Paper, but what new jobs or


tangible differences does the energy Secretary


A it is very much a reference to communities such as she mentions.


When I talk about places and parts of the country that have fallen


behind the best performing in terms of productivity, these are the areas


and the towns we have in mind. It is essential it seems to me that one of


the foundations for future prosperity is to ensure the level of


skills is higher than it has been for the industries that are


expanding and this is particularly in areas such as hers that this


transformation can have the greatest effect. I was delighted earlier to


welcome the Prime Minister and Secretary of State to the... To


unveil industrial strategy for the UK. Will he agree with me the other


556 million boost for the Northern powerhouse, along 4.7 billion for


science, technology and innovation will help create high skilled, high


waged jobs hoping to bridge the North-South divide?


My honourable friend mentions two things. One is a devolution through


local growth funds which is making a big difference, putting more funds


in the hands of people with the knowledge of what is needed locally


to make a difference and of course, the big investment in research and


development and impressive facilities will make very good use.


Mobile technology is an important part of modern infrastructure. But I


see Secretary of State to be cautious looking at Ofcom figures? I


suspect many of us here have looked at maps saying yes, universal


coverage, no problems at all. But when you go on the ground, you find


it is phenomenally difficult. According to Ofcom, this building


has perfect access to all four mobile signals. It is not true. The


honourable gentleman makes an important point. When we talk about


digital infrastructure, whether mobile or broadband, it is


important, and for businesses who depend on it, it is the


dependability and the reliability, not any theoretical availability. It


is important and part of the approach. The Secretary of State


pointed out 70s industrial strategy exclusively focused on big industry.


Will he ensure his strategy does not repeat the mistake in exclusively


focusing on large, mature economies at the expense of medium-sized


emerging economies which together represent the future? He's up to


Lula Wright and it is one of the reasons why much of the proposals


about crosscutting are about certain firms are why there's a particular


emphasis on helping small businesses grow and new businesses to be set


up. Steel is a key infrastructure product for all those infrastructure


projects he mentioned in his statement. I very much welcome his


statement that there is likely to be deal for steel. What the said


industry need to do to achieve that sector deal? The steel industry is


already embarking on a consideration of how it can plan its future. I've


encouraged them, that they didn't need the encouragement, they are


keen to doing it and I look for to the fruits of that in the coming


weeks. I welcome the recognition that role broadband is particularly


important for increased growth. Will he make a commitment that no small


rural business will be left behind when it comes to digital


connectivity? An excellent point. If we want to help everywhere achieve


its potential, then we know the prosperity of many rural areas is


held back if they do not have good digital connectivity, so that is an


ambition we set out in his green paper. Given a vital nature of steel


as a foundation industry, it is pretty astonishing that Steele gets


only one passing mention on page 100 or so of this report. Could I


commend this report to the Secretary of State, steel 2020, and could I


ask him to read it and come to a future meeting of the all party


Parliamentary group to explain why steel has not been given a deal in


the report and seems to be airbrushed out of the so far. He


speaks nonsense, because I had cordial and successful meetings with


the steel industry and are excited about the prospects of working


strategically for their future. I've had the pleasure of attending in the


past and look forward to doing so again. Last week, the Chancellor


described the roll-out of new vehicles as disappointing. Will this


Green paper lay a reliable road map to enable us to hit that target as


it is also a key part in improving air quality? He's right that the


opportunities in the roll-out of electric vehicles are significant,


not just in the transport severe, but in terms of our energy systems.


An electric vehicle is amongst other things, a unit for storing


electricity. So combining a making the connections between these


sectors is good for consumers, it is good for industry and for the


resilience of the country. As the Secretary of State knows, automotive


industries are a major contributor to the greatness of the industrial


heartland that we have in the North East. Yet, the indication of a hard


Brexit by the Prime Minister has left many businesses across the


country and the North is nervous, including Nissan in my constituency.


Will he ensure this consultation fully addresses these concerns and


supports a success and hopefully future expansion with regard to


electric vehicles and batteries of this vital industry? Well, the


honourable lady is correct to emphasise the importance of being at


the cottage edge of research and development in the automotive


sector. -- the cutting edge. This is why it many car companies find


Britain an attractive place to base themselves. When it comes to Brexit,


we are clear and the Prime Minister has been clear that we want to have


a free trading relationship with our friends and neighbours in Europe and


that is the way we will approach the negotiations. As you are well aware,


the North West of England is very much the hub of the nuclear sector


of the UK. Can he shed light as to what thinking he's given to ensuring


the people in the North West are the prime beneficiaries of the supply


chain emerging at the nuclear sector? There are huge


opportunities, through the development of new nuclear which


will allow for the training of a new generation of engineers and


technicians. There are also opportunities, not just here, but


around the world, in using our expertise in decommissioning, to


earn income for the UK and creates jobs. There are big opportunities in


the sector, both in skills and in terms of industries expanding. The


Prime Minister's strategy backs concrete proposals for Wales. And


considering our surplus with the EU, Wales is set to suffer most as a


result in the pursuit of a brutal Brexit. Does he accept that do


nothing to counter the loss of EU funding will serve only to


exacerbate the already significant geographical wealth and earnings


inequalities which characterise the British states? I asked the


honourable ladies read the Green paper as you will see a crystal


clear commitment to making sure all parts of the United Kingdom are able


to share in the prosperity, that is good for both those places on the


UK. May I welcome the reference in the


Green paper in recognition in the vital role of creative industries?


It is one sector... Can he reassure me that it extends to the TV and


film industry? The Crown, the recent hit series, which will still be my


constituency, is a wonderful example of jobs, investment and expert that


can be generated by that sector. Does he agree that requires not only


the correct skills, be particularly in the south-east, the requisites


why commercial space? I do agree with my honourable friend and the


creative industries together have some claim to be Britain's most


successful sector in recent years. They've been growing strongly. Sir


Peter Basil get has agreed to work with the industries to work with


building on that success in the future to continue to create the


greatest jobs they've been doing and all afford to it. I warmly welcome


the new Green paper. Though the last six years without a strategy has


been wasted. Having said that, in relation to the bit for metals and


there's no mention of the sea CS, these issues are critical to energy


intensive industries going forward. But of real concern is regarding


virgin steel-making capacity and certain ministers in relation to


importing steel, rather than primarily relying on British made


steel, whether in Scunthorpe or Port Talbot. Will the Minister please


rule that out? I do recognise the issue you mention is, but if he


speaks to me later, I will find out more about it. I'm grateful for his


welcome for the approach we are taking. I'd argue strongly it builds


on the some of the successes we've enjoyed in recent years, not least


devolving powers and funds to local areas, looking to create


institutions that can conduct research and development that now


has a worldwide reputation. But we can't be complacent and must


continue that are built in the future. I congratulate my right


honourable friend on his industrial strategy Wix works hand in glove


with the Government's Brexit plans to strengthen business confidence.


The strategy underpins about commitment to life sciences and will


my friend accepts invitations come to AstraZeneca's site and find out


more about their growth plans? I will indeed. And speaking of life


sciences in the North West is does that one of the themes of the paper,


the interaction between sectors and places and how we can build


institutions that can encourage a small business to be able to benefit


from the presence of a range of other businesses in that sector. We


have further work to do and my honourable friend will be an expert


advisor. The Green paper should set other Government's ambitions, and an


industrial strategy should have a central focus on jobs. I asked the


Secretary of State on the 13th of December by the disability


employment gap in our industrial strategy could support the


Government's ambitions inhabit that gap -- halving that gap. Can he


explain therefore why disability and the disabled and not feature in


paper? It does make mention of the fight we will be setting out further


measures on employment policies in particular and I've agreed with him


in the past that just as in relation to the question from his honourable


friend, when you have people whose contribution is not being adequately


made use of, that is a loss not just for the individuals in question, but


the whole of the UK and the economy. This is a welcome and ambitious


green paper. Inswinger, we have embraced developments, but we need


to be able to reach out for potential and to do that, we must


unlock additional land and infrastructure funding. How can this


process be sped up? I'm keen we should be fleet of foot in that,


because it's important for business is expanding all being founded


located for the first time that they should have the land available. The


Communities Secretary have this in mind in his reforms to the planning


system. Factoring and exports are benefiting greatly from... The much


more needs to be done to build the country's industrial strength. Will


he give serious consideration to re-establish in the national


economic development Council on how British industry may be doing in the


future? I am interested then the honourable


gentleman 's proposal. I had not thought of reviving a body which is


associated with a different type of industrial strategy, when it was the


big empires sitting down. I think the approach we want to take is to


create the conditions in which it is the resurgence of the new


businesses. I am not sure that would be the rate approach. Small and


medium-sized enterprises are the bedrock of local economic life. How


can the secretary of state demonstrate my constituents in


catering that the industrial strategy is relevant to them? My


experience of businesses just like that is that what helps the ability


to fulfil growing order books is often held up by the lack of skilled


staff they can employ. We are wanting to improve standards in


technical education to assist employers and I think it will make a


big difference to those small and medium-size businesses who maybe


cannot finance the larger training institutes themselves. Can I ask the


Minister how he looks at this commitment to innovation with the


wholesale pillaging of the claim of British energy companies through


foreign takeovers. Not least the takeover of MasterCard and the


perspective seal. I regard that I regard it as a matter of pride that


this country is welcome to overseas investment and we have benefited


hugely from that. When I was with my honourable friend in the West


Midlands invaded, we met with the chief executive of Jaguar, which is


known by an Indian company. I would want to be open to overseas


investment. I warmly welcome the raider of that reply. Would he


consider the future of the ear partnerships, with the long term


relationship between the Ministry of Defence and Connecticut, would he


look to grow other areas of expertise? It has been a success. We


are making a commitment not only to that, but learnt lessons from other


sectors that sectors like that go on to create similar institutions. I


welcome the Green paper on that basis. But as they are the


investment and the money they have traditionally supported? I went to


old college to meet the principal and they said the lack of funding


was really handicapping the efforts to help improve the skills level. We


are looking to find as much common ground as possible. We are wanting


to work with the colleges and employers to make sure the forms


that only did for his constituents as well as others. So that they will


be able to get these jobs in the future. Having a life sciences at


the front of the schedule and the strategy, the biggest customer is


the National Health Service. Could he confirm that the procurement, the


inflexible and unimaginative process by the National Health Service will


be under review, not least in relation to drug purchases? There is


evidence that the green paper is a joined up in this and the Health


Secretary is an enthusiastic participant in this. I am sure he


will be pleased to hear about the expertise my honourable friend


brings to the subject. When we had about the industrial growth, we


welcome that. But having seen the ten action points outline, can he


confirm that the sidelines with industrial strategy and will he be


looking to tie up the deal with the colleges so we can sustain that. I


think it showed very good ambition. I wish them every success in that.


Deals will have to be negotiated, but he knows that Scotland has a


very good record in that regard. I welcome the statement. We enjoy an


excellent ecosystem for life sciences. Would he agree with me


that the strategy practically provides the opportunity for


businesses to bring their ideas to the door to drive direct action for


the sector in particular, but all sectors and could I invite him to


come and see Ipswich, with its enterprise zones. It would make an


excellent site for a college of technology. It would be very nice to


be there. Can I see the point she makes are absolutely resonating with


the themes of the Green paper. We want to make sure we have the great


institutions, the rate schools, the late support for businesses. It is


very much business lead. We're not directing business, telling them how


things should be. Employers and consumers will respond to the


strategy. We want to hear what they want from it rather than the


government telling them what how it is going to be. The Secretary of


State talked about migration policy with regard to employment. Will he


take over responsibility for certain parts of migration policy. Better,


given has importance on evolution, will he look devolving immigration


policy to the nations? My responsibilities are broad enough


and keeping me very busy. It gives me the opportunity to emphasise that


this is an approach by the whole of the government. It is important that


the greatest and the best are able to continue to be employed to make a


contribution that they are to the United Kingdom economy. Thank you.


There's much to be welcomed this strategy and they would particular


express my support for science development time developing skills.


Could he sees a moment and make the case for the government to increase


spending on science and technology to 3% of gross domestic product?


Could I also ask to ask skin to look at the Digital strategy as a matter


of urgency? I am grateful to the honourable member for pushing us in


that direction. He will see that we are very clear-sighted about this.


We are very keen to invest in science and research. We want to


create conditions that the private sector, as well as government,


invests. It is very much part of a programme of which this industrial


strategy is leading. Thank you. I welcome the fact that this Green


paper was brought forward. Much of this is looking at jobs in the


future. But what about the healer know? -- here and no. For instance,


the problems in my own constituency with Babcock? I am very aware of the


situation is at Babcock and it is always bad news when we hear of


people losing their jobs. We have had a good record of finding new


employment and begin to park does reflect that businesses will close


from time to time. But it is all part of a strategy that we would


make sure that people will be able to hopefully get jobs in the future.


Kathy gives technical education greater parity of esteem in


universities to make young people find easier to get vacancies? I am


grateful for his words and his contribution. It prominently


features what he asks and I hope he will promote it in the years ahead.


The science, engineering and manufacturing technology has helped


create a shortfall of 50,000 engineers. How does the Secretary of


State plan to close that gap? And can I ask him to ask him to check


that all these steel and will HS2 be will be manufactured in the United


Kingdom? There is a big focus on technical education, going rate


street to identifying the challenge that the rate honourable gentleman


puts forward. We want to make sure all these skills are available. With


regard to procurements, he will know that is a change in the guidelines


to enable contributions to be viewed only fear basis. That is part of the


process. -- fair. I am reassured to hear the Secretary of State saying


this industrial strategy will be a much broader and wide-ranging 1-run


the one after World War II. When we look at what managed to lift but a


note of economic gloom in the 1980s, tax simplification was at the centre


of that. The third challenge we need to address this to keep the United


Kingdom is one of the best places in the world to either start or


continue our business. Both the policies he mentions are crucial to


that. Part of our success in treating business success in recent


years because we have had that very much in mind on the side of the


house. The I congratulate the Secretary of State and the


recognition of the energy system and the crucial storage and management


policies will improve productivity. Would he agree that the United


Kingdom should be the world leader in the sector and with the south


west not be the ideal place for the base of that? He has commendably


vigorous and has promotion of the south west. So will other parts of


the country. The Northwest with the strong nuclear sector and the


south-east with its equal energy directives. All parts of the United


Kingdom can benefit from this strategy.


Kent has strength in the life sciences, but the conspicuous gap in


medical schools. An institution for which life size innovations


frequently emerge. I'm hopeful this strategy may be a vehicle to seek


support for medical schools and how grateful I would be to him for any


encouragement he can offer. I'm grateful to my honourable friend for


her words. She will know that in life sciences, one of the proposals


we make is we review what the sector needs to be able to support the


small and medium-size businesses there and that proposal may be


something they should take up. Mel congratulate my honourable friend on


the statement and green paper. As he develops the strategy, will is a or


Britain's leadership in the fourth industrial revolution and the new


jobs and companies driving forward our growth and encourage them to


come to the green paper consultation? I'm grateful to my


honourable friend for all the work he has done in assuring this country


does not see it to others the energy and initiative in taking advantage


of what is called the fourth industrial revolution, and the


pamphlet he recently wrote is full of good ideas and I hope he will


respond with his colleagues who wrote that to the consultation. I


not only commend the Secretary of State for his statement today, but


also commend to him the all party Parliamentary group published today


and hope it will be useful as part of his ongoing discussions within


Government. One area the Government has strode forward in is the public


sector procurement. Can he ensure that as part of this we transfer


some of those principles into the private sector procurement, too? I


will bear that in mind and read it very closely the report that he


mentions. Any industrial strategy or digital strategy must rely on


transformative investment in broadband infrastructure. Can the


Secretary of State reassure the House that this will not only


address the problems of the last decade, but also the next 20 years


and 30 years, so we can plan for an Internet of things and the fourth


industrial revolution? He makes an excellent point and of course a


strategy must be forward-looking and create conditions in which investors


and firms can make commitments now that will lead to our prosperity in


the future. His frame of reference is correct. I warmly welcome the


green paper on the modern industrial strategy. However, will my right


honourable friend reassure my constituents in Long Eaton that


traditional industries such as lacemaking that contribute so much


to our economy do not be left behind? I'm interested to hear the


observation. It is a consultation and it is important that we


participate in the new industries and that through our research and


development and scientific expertise we take our place there. Of course,


many industries we have make an important contribution to our


economy and a boiler and we want them to prosper as well. I woke on


these proposals and a note that in all ten of the areas of focus, the


Yeovil area and its aerospace cluster present our study are


crucial opportunities to optimise our potential. We leave it in my


constituency and help me promote a local centre of excellence and


technology to build local skills and actively encourage inward investment


from the likes of Boeing so that in partnership with great local


companies like Leonardo, we can deliver the skills and jobs of the


future and maintain our strategic abilities in helicopters? In my tour


of the country from Orkney to Somerset, it seems I will be


delighted like other aerospace cluster that is there. Companies


reinforce each other by their presence there and that we know


across the world is a source of resilience for local economies, when


you have several companies all in the same sector. I know you've been


saving the best for last. There have been many references to mobile


technologies and electric vehicles as growth areas for the future and


both rely on batteries. Will the Secretary of State join me in


welcoming the news that large deposits of lithium have been fouled


in Cornwall? This presents a great opportunity to build on our mining


heritage in Cornwall and develop new industries around the extraction of


lithium. Will he also confirmed this industrial strategy is designed just


to support industries like that? I hadn't picked up that news and am


interested to hear it from my honourable friend. It is certainly


true that the technological developments in energy storage,


including batteries, are a big opportunity. And if Cornwall as an


opportunity to contribute some of the raw materials, I'm sure it's


excellent news for them. The local Government Bill, second reading. We


now call the Minister to move the second reading. Minister. Thank you.


I beg to move that the bill now be read a second time. This Government


has made no secret of its ambition to build a growing international


economy that works for everyone. But in global Britain, we need local


foundations. It is not enough to have a world leading FTSE 100


exporters, with the thriving high streets, strong independent


retailers, local economies that match the exceptional growth UK plc


has experienced in the last seven years. The best place to lead that


drive for growth or local councils. They know their communities better


than anyone, what strengths to build on and what challenges to address.


They hold many of the levers required to deliver change. Yet, in


many meetings with councillors and council leaders, I'm often told all


local authorities like a meaningful incentives to grow at their local


economies. They tell me the system is overcentralised, that residents


see no connection between the level of local taxation and of services


they receive, that the proceeds of local growth disappear into national


coffers, forcing councils to go cap in hand asking for funding from


Whitehall. Mr Deputy Speaker, that is not good enough. Local


authorities and businesses as well as local communities deserve a


better deal. And this bill will provide that. It delivers


far-sighted and long overdue changes about radically reform the way we


fund local Government. It ends the main Central Government grants


altogether and instead, allows local authorities to retain a locally


raised taxes. It encourages local growth and it supports local


businesses. Does it without accounts are like mine actively promotes


growth and incurs huge bills for new roads, schools, surgeries and other


public facilities and that has not been adequately reflected in the


amount of money were allowed to retain from taxes were raised


locally or in the support we get from Central Government? I would say


to my right honourable friend that I absolutely understand local


Government for far too long cause complained that the incentive to


create growth is not there, particularly because of things like


the levy, which was implemented in regard to the 50% business rates


retention scheme and that levy, as my right honourable friend will know


is being scrapped in this bill. Mr Deputy Speaker, this is not a bill


that increases spending and puts a greater strain on local taxpayers.


Rather, it offers a focused package of reform that will encourage and


support local growth whilst continuing to live within our means.


I will start with a commitment made in October 2015, that by the end of


this Parliament, local Government would retain 100% of locally raised


taxes. In implementing these reforms, we will move local


authorities away for dependency on a Central Government grant and on


towards greater self-sufficiency. I would like to take this opportunity


to record my gratitude for the substantial contributions made by


many in local Government and in businesses to the development of


these reforms. The bill is a major milestone in the process and


establishes the legislative framework for the reformed system.


The bill reflects the significant input we have had to date and our


collaborative will continue as we are determined to detail of the


implementation of the new system. A key part of that will be the


strengthening incentives for local authorities to grow their business


rates in coming. This will build on the current system of 50% business


rate retention. Under these reforms, which are aiming to be implemented


in 2019, 2020, local Government will retain around an additional ?12.5


billion in revenue. To ensure the reforms are fiscally neutral, local


authorities will have grants replaced with locally raised taxes


for existing responsibilities, or be given new responsibilities. These


matters will be subject to separate discussions and not dealt with in


this legislation. However, the Secretary of State announced last


week that devolution of attendance allowance funding is no longer being


considered as part of the business rate reforms. And I'm happy to


confirm that to the House today. To the Minister... In the consultation


paper the Government published last year, as well as suggesting


attendance allowance may be passed down to local Government, and I


welcome the fact it is not, they also suggested the ?3 billion


public-health grant and the better care fund so crucial to local


authorities facing gay social care funding crisis, will be axed as part


as a fiscal quid pro quo business rate devolution. Is that still the


minister's intention? I would say that as the honourable gentleman


will know, the bill before us today does not deal with the principle of


what additional matters will be devolved to local Government or not.


What I would say to him though is that with regard to social care


funding, which is an extremely important issue, it is this


Government whose given the opportunity for local Government to


spend up to an additional ?900 million in the next two on social


care, in addition to the additional package of ?3.5 million that we've


given the councils access to and in total, we've given access to an


additional ?7.6 billion across this spending review period that is


dedicated absolutely and solely to adult social care. I am extremely


grateful to the Minister. Woody accents that one of the consequences


of the bill is that we will significantly see rates demand on


hospitals at a time when the health service is so hard pressed, for


example, the Queen Elizabeth in Birmingham will see is rates demand


rise to ?7 million. If he's willing to look at discretion of the relief


on public toilets, will he look again at discretionary relief for


hospitals? I thank the honourable gentleman for his question. I'm sure


having perused the bill, he will know that within this bill, NHS


hospitals do not feature in regard to the increase that he mentions. I


am sure he will know that what I think is referring to is the 2017


business rate revaluation, which is an exercise that has been undertaken


by the valuation office agency, being independent of Government. In


that sense, this Government has put a package of transitional relief in


place, which is up to 3.6 billion pounds. NHS hospitals will be


subject to the same transitional relief as well over rate payers who


will see an increase in their business rates bill as a result of


the re-evaluation. But I'd like to point out that the business rate


revaluation is not as many members in this House will know a process


designed to raise ball is business rate overall, it a fiscally mutual


exercise and therefore within the business rate revaluation, there


will be people whose business rates bill will have increased and


organisations whose business rates bills have decreased.


The bill does not determine individual levels for individual


councils. We will continue to: people across government to deal of


the fear funding review. We remain committed to deliver a new funding


formula in time for implementation in 2019-2020. Does he agree that


while the devaluation of business rates is very welcome, the gap


between urban and rural businesses and the review must make sure the


gap closes as soon as possible and does not further weighed in. I think


you for that intervention. That is indeed my view in the local


government settlement deal last year. That was the insertion of a


rule taking into account absolutely what my honourable friend says. That


said, it is not, as he knows, part of this bill, but we are putting


that under review. It is apparent that there are many places in the


country where local authorities have come forward and expressed concern


that the last proper assessment was around ten years ago and in many


places, the demographic has completely changed in the


intervening period. We are looking closely at the review at the


situation regarding how resources should be distributed across the


system. I will give way. We have shared many a happy hour debating


business rates reduction. Most businesses have welcomed the


settlement. Some are worried about other adjustments which have been


made. What action is my honourable friend taking on adjustments to the


overall settlement to take into account changes that the department


has made which renders some of the settlements rather strange, by


comparison. My honourable friend and I have spent many a happy time on


the business reduction Bill which is coming back for its fourth stage


this coming Friday. In terms of the issue that my honourable friend


brings, my honourable friend is extremely clever in these matters


and a member of the select committee and the issue he is referring to is


not part of today's bill. He will know it is part of the local


government finance settlement under which we have very recently


undertaken a consultation. And on which we will be responding to the


consultation and appoints meet by honourable members in rating and


from local authorities across the country in regard to the new homes


bonus which he has been able to get America this evening. On the record.


So far as the 50% local additional business rates which I raised is


finding urban areas because they are more prone field sites the to


encourage business setups. It will be far harder in the country for us


to raise the money. That is a very valid point. Indeed, like in the


current system, there will be a redistribution of one of the four


principles within the system because we must, in setting up the system,


make sure there are not alias fundamentally losing out just


because they do not start at the same position in terms of the amount


of business rates collected as other areas. I have had a number of


honourable friends ask a question about rural areas. Many of them are


dependent on small businesses. Would they be exempted from business rates


completely by the government package on business rates relief? I can


assure him that the effect of the 2017 re-evaluation will be mitigated


on local authorities on the current system because it will make sure


that rural areas do not lose out. It was also the case that prior to this


new 100% business rates system getting under way. I will give way.


I is the issue of redistribution, is there going to be another needs


assessment? Currently, when the new system comes forward, this house is


that information before us. I understand in future we will not


have the system. The principle of allocation will not come to this


house. By have we been circumnavigated in this process? The


honourable gentleman is a great deal of knowledge and this is the


chairman of the select committee. He also has a great deal of respect


from the members in this house on the subject. We are now in a very


different world in which we were in only a few years ago we local


government collected the whole of the business rates and back to


government. 80% of the of local government was money that was


distributed from central government on the basis of the principles that


he mentioned. No, we are moving to a system and Minix take it we are 100%


of the money from that will be raised locally. It is not a


situation where year-on-year we will be in a position we are we are


redistributing the level funding that has been the case. The other


point I would make and it has been well recognised by local authorities


in the past year. 90% of the local authorities of seeing up to the


four-year deal. The have asked for certainty of funding, which this


certainly provides. Under for the point of


redistribution mechanisms, given EV label owns that councils will be


able to reason through precept. It will raise 700 million over the next


three years. Could he give us any encouragement whether the better


clear fund will be brought forward to address this serious concerns


there are around the problems with social care? I am sure my honourable


friend will know, I think she is referring to the new Cuckoo payment


which will go directly to local authorities, that has been brought


forward as part of the spending review from 2015. In that sense, she


will also know that funding effectively by changing the way the


new homes bonus operates and sharpening the incentive in relation


to the way that system operates. Therefore, that additional money was


not freed up quickly enough to do what she says, although this year it


was ?105 million in the system. Next year it is ?800 million. The year


after it is ?1.5 billion. Alongside that, we will also be an additional


?240 million for the social care system is a dedicated, real ice to


additional savings made through the new homes bonus. I will give way.


There will not be a change every year in the assessment. It will be


fixed for the period of the settlement. What is important is


that when a new needs assessment is done, there is then an allocation


agreed, at that point, at the first allocation statement, it is


important that that comes back to this house so we can take a view on


it? As I said earlier, the honourable gentleman, and a


significant amount of respect and regard to these matters while he


does not always realise it, there are members of the government


benches who do listen to the suggestions and concerns that he


raises. I would reiterate, we are moving to a different world. That is


why we have chosen to implement a system that we have laid out in the


bill. Given that the emphasis of resources are onto local government,


what a central government actually going to save as a result of this?


In response to the honourable gentleman. I would say to him, this


situation is fiscally neutral. We expect the current expenditure of


local government to be realised from the current local taxes that are


raised locally. There will be an additional ?12.5 million of spending


that will also go to local authorities. As I seek, these are


not items of expenditure that are looked at in this goal. It is a


separate principle. But we will certainly be looking to devolve


additional responsibilities to local government. In discussion with local


government and organisations concerned, which we expect to be


fiscally neutral. It is not physically -- fiscally neutral.


Central government are saving money as a result of shifting the


resources onto local government. We have got to reach a point surely we


are local government cannot sustain that. Central government must be


saving money somewhere. As I said to the honourable gentleman, there is


an additional money going to local authorities only fiscally neutral


basis. What they would see as the whole principle of which this system


is built is that it will give local authorities the incentive to wade in


the business base and raise additional funding for providing


local services as a result of that. I will give way. I thank the


Minister. Would he agree that the biggest savings that they will give


an incentive to create jobs and drive jobs for what, which will get


people off benefits and that will be the biggest benefit of all? Is is


quite often the case, my honourable friend has hit the nail on the head.


This is about raising local taxes that can be spent on local services,


but it is also about driving growth. The biggest thing we can get, one of


the most satisfying things, is to see people being employed that were


not previously and employment. It is a bill which will drive that.


I thank the Minister. As he looked at a thing used in economics to


indicate where on the income tax collections spectrum is the optimum


place to collect as much revenue as possible? Because we hear a lot


about what with revenue can do for local Government, but there's a


limit on what businesses can bear. And in my towns, some of my


businesses are struggling with business rates. What help can you


give local authorities to try and incentivise things to optimise


growth and the collection of these taxes and the results for business?


Can I just say that interventions are getting too long. Can we keep


them tighter and it would give us more time for people to take part.


Thank you, Madam Deputy Speaker. Jones is normally a popular name.


Marcus is not normally that popular. But it is good to have another


markers in the House. I'm delighted at the pointy razors and I do recall


that curve in my days of A-level economics. This bill will set out a


framework for local authorities to be able to reduce the multiplier on


the business rates, so reduce the tax rate and by implication of his


point, that may well lead to business as being attracted to a


particular area and additional revenue therefore being raised.


Authorities have been very clear that they do want more stability.


Something they don't get, as I mentioned to the Select Committee,


from the current annual discussions on the local Government funding.


Councils have told us they want longer-term arrangements. 97% of


English councils have signed up to our multi-year deal. This bill


delivers that certainty and amends the current settlement process and


related approach to the setting of council tax referendum and symbols.


We will conceive to be to local authorities from the impact of


reductions and the bill will provide a framework that will help councils


manage risk and ensure they have a better protection from the impact of


successful appeals so they can focus on delivering services their


residents and businesses need. On that point, in terms of local


authorities who are protected from changes, I welcome his commitment to


a fairer funding formula, but nine of the local authorities were the


highest spending power are in London. Nine out of the ten. Yet


nine out of the ten lowest council tax authorities are also in London.


Does he agree a fairer form that must take into account cost drivers


behind need in local areas and not necessarily what has simply gone


before? It wants to be about need and cost of delivering those


services. I thank him for that point. He is correct in that we need


to take a significant look at how funding is provided across the


system of local Government as I've pointed out on a recurring basis,


that doesn't feature the principles for the fair funding as they does


feature this bill. But their importance. And certainly, we are


taking the issues that my honourable friend mentions into account in the


work that we are doing alongside this Bill. Taking soundings from


local governments. Madden back row, the bill also includes cutting rates


are small businesses and allowing local amenities to local communities


can thrive. We'll take power following the commitments of the


Budget last year for the Treasury to set the indexation rates for the


business rates multiplier. This will allow us to change from the current


rate of RPI to the significantly lower CPI measure. We will change


the rural rate relief to ensure small businesses there receive the


same level of business rate relief as those in urban areas. This is not


only fairer, but will make a real difference to many employers across


the country. We'll provide a new relief for five years for new


optical fibre, fulfilling an announcement made last year. To make


Central Government more responsive to changing circumstances, the bill


streamlines the admin process of including premises on the central


rating list. We will also introduce charity relief for promises on the


central list, drinking them into line with those of local lists. --


bringing them into line. Much the amusement of honourable members of


the House where up last week, we are providing a new discretionary relief


for public toilets and councils will be able to maintain these important


facilities without having to spend quite so many pennies, Madam Deputy


Speaker. As I said, this Government is committed to providing the right


conditions for growth. The key function of this bill is to provide


local Government with strengthen incentives for growing the business


rates income and encouraging local businesses to set up and grow. Could


you clarify something? The words on the face of the bill say on the


question of communications infrastructures, say it is wholly or


mainly used for facilitating the transmission of communications by


any means involving the use of electrical or electromagnetic


energy. My reading is that confirms rate relief being for the


infrastructure used in telecommunications and for example,


virgin media, which has a property in my constituency in Kirby would


not be eligible. I hope I'm wrong. Chinaman is to let me know if I am?


I think the honourable gentleman may be conflating the central


list and the business rates relief, which is basically to incentivise


providers to actually lay further networks of fibre-optic cables in


the ground so people can benefit from superfast fibre broadband


across the country. Madam Deputy Speaker, under the current system,


Central Government currently levies local growth. We've listened to


councils who have told us that this tax on success is a huge


disincentive for local authorities and scraps the Central Government


levy for good. This means local authorities will keep the hundred


percent of business growth in business rate income between resets


periods and a real incentive to grow their local economies and a great


way to keep the proceeds of growth in their communities. We will also


allow local authorities that set of pooling arrangements to designate


specific areas where they want to boost growth. Here, they are the


potential to give all growth and not lose it to the periodic reset and


distribution process. To unlock growth through his considerable


incentives provided, we need councillors with business


experience. What more can be done to attract busy business people to be


themselves forward? I'm aware that my honourable friend is an


entrepreneur himself. He is absolutely right. In the sense of


visible and measures brought forward, I think it will attract


people into becoming councillors, because like in the past, where it


was a situation where local business rate was collected locally... Sent


back to Government and distributed across the country, this will give


them an incentive to be entrepreneurial and will also


attract the people he and many of us want to see you in local Government.


Madam Deputy Speaker, going further, the bill will provide real


flexibilities to local authorities. Councils can also provide business


rate relief for parts of area. As a result, for first time since


establishment of the business rate system councils will be able to


provide a reduced national business rates multiplier for the authority.


This will help them attract business and investment into the area. We're


also supporting investment where needed to boost infrastructure


investment and also enable mayoral combine authorities and the GLA to


raise a small supplement on the business rate in full consultation


with businesses to enable them to realise their area's growth


ambitions. These will allow property owner bids


to be established across the country, whether or not a business


rate supplement is in force in that area. This will allow a levy on


those with a property interest. Running a business is more than a


full-time job. The working day does not end when you put up the closed


sign. There are huge demands on anyone running a business and such


entrepreneurs deserve the Government to stand firmly behind them and not


get in their way. We will take about the business rate system or


convenient, ensuring every business can access it billing and provide


guidance to make sure bills at the same across the board, if your


business as premises in Rochdale, for example, you should not have to


wrestle with two difference completely set of paperwork.


Finally, a paving measure. That will help us me to come is offering


joinder up access to tax bills, including business rates by 2022.


The Toulon, local Government has been too dependent on the whims and


largess of Whitehall and Westminster. Now at the time to


change that and help local leaders focus on growth and reduce the


burden on local businesses. This provides the framework to do all


that and more and I'll... It will realise a once in a generation


reform to revolutionise the way local Government is funded. A


delighted to commend this bill to the House. The question is that the


bill will now be read again. The people of England should be able to


shape their own destiny without having to wait for the say-so of


ministers opposite. This bill is one part of a mix of new law funding


reviews and it regulation and other when all publicly available will we


know whether ministers have merely devolved responsibility for more


badly funded local services or if serious opportunities for local


initiative are genuinely been created. The party opposite has all


too often had an hostile attitude in practice to local people being given


the power to govern themselves properly. We on these benches are


well remember the attacks of the late Margaret Thatcher on local


councils. The introduction of the poll tax, abolition of London local


Government and the nationalisation of business rates. Notwithstanding,


recent deals on extended local powers in some areas, services run


by local councils have been one of the hardest hit areas of Government


funding in every Budget since 2010. Whilst we are reminiscing, does you


remember the local Government the Labour Government cut in rural


councils during their time in office, causing many of the problems


we now face in that imbalance of funding? No, I don't.


I do not remember that. They were able to invest in local services.


Far from what we are seeing at the moment. Devolving power to local


area so fatal services can be improved. These ambitions we would


support. But the detailed implementation that this paves the


way for could make the difficult funding problem facing local


government even worse. It could alleviate and add to the social care


problems. Badly introduced and regional inequality could encase the


divisions between those with a growth business industry and those


more opposed to that. This has to be accompanied by every distribution


formula which addresses those councils who already have a large


business rates income and those who do not. It is important that other


areas of England do not get left behind. This could work on some of


those label -- labour council areas. It could work in river does not seem


to be such industrial growth. If the rate honourable gentleman is


successful in getting onto the committee, we can shear more debates


about such questions. This bill does not answer the very questions which


local council and about how business rates retention would work in


practice. There is no mention of what additional responsibilities


they would be allocated with this redistribution. Few people will of


confidence that the government will be capable of addressing these


concerns. Over the last seven years, and axe has been taken to local


government by this government and the previous one. It is costing more


for worse public services. Ministers are forcing councils to put council


tax poll local services have to be cut. It is an interesting comment


that the honourable gentleman makes. Council tax in real terms is named


percent lower than it was when this comment came into power in 2010. The


council tax not double while Labour were in government? The figures we


have is that there will be a 25% increase in council tax over the


course of this Parliament. This is a result of the decisions which have


been taken by the government. I would say to the honourable


gentleman that even with the adult social care precept which many


councils have welcomed, council tax in real terms will still be lower in


2020 and it was when his party were in charge in 2010. I do not know who


came up with the fight. I says suggest he looks at the record of


spending under has department on local council services. ?10 billion


voice spent by councils this year than they spent in 2010-11. Councils


have faced a 5.8 billion gap by 2020 just to fund statutory services are


cut according to the local government Association. Without the


necessary funding, it is hardly surprising that we wonder whether


the government are really interested in devolution simply on the evading


responsibility for cuts. Dorsal shout to libraries, Day centres,


swimming pools, museums. Bus services. Abandoned or shot.


Investment in parks and street cleaning Ltd. All of these services


treasured by local communities and provide vital lifelines for


vulnerable residents. It is interesting to hear that list. Ken


Healy mainly how much extra funding the Shadow Chancellor promised? If


he goes back and looks at our manifesto, he was committed to


devolving ?50 billion of additional spending to local government. He


likes to pretend this is simply a matter of effective management. This


is stopping councils providing a decent services they want to


provide. I will give way and a second. The former Prime Minister


inadvertently exposed this dilution first. He wrote to the leader of


Oxfordshire County Council and I quote, I was looking at a long list


of suggestion to how to mitigate the cops to front line services. This is


in addition to the into productive proposals to cheap close children's


centres across the country. The lack of understanding and the


consequences of his own actions recent bees received the response


are regularly received from the council. It explained that 2800


council employees have lost their jobs. The remainder had experience


peak freezers and below inflation increases for a number of years.


Could he clarify on the issue of Labour Party policy. At the moment


there is a on which local authorities can raise the council


tax by and of the ousted goal for the lay have to go for a local


referendum. Does the honourable member agree with the or agree that


there should be a referendum if authorities wish to raise it further


so that there will be a democratic view from local people. It is an


interesting question. I will come onto it shortly. The decision by


Surrey County Council who announced they were holding a referendum on a


15% increase in council tax. I wonder if my honourable friend for


Carol and they will be voting, the likes of the Chancellor of the


Exchequer, who lives there. This happens because not a single new


penny of extra money was put into local council services. They want to


stabilise the care market and stabilise the amount of recruitment


and ease the pressure on NHS hospitals. One reason why Surrey 's


decision was so striking is that they have been able to increase


spending on adult social care by 34%. Some councils have had to the


police the spending on that prey almost the same percentage. In fact


only two out of 152 local clear authorities have been able to


increase their spending more than sorry. So sorry cannot cope with the


demand and social care, most even Oxfordshire cannot protect front


line services, the impact is disproportionately felt across the


country, this bill offers no guarantee that the situation will


get better. We'll do the people get, the more the relying on local


services. It will have the coolest area the hardest. The Institute for


Fiscal Studies, the ten councils that are most don't really have had


to cut the services by 53% on average. We cannot even call this a


post called Waterloo. Your postcode matters, but it is not lock or


chants which determines the quality or quantity of services, it is the


actions taken by this government. That is the context we must consider


this bill today. Before anyone in the government seeks to advance the


idea that local councils are going to get a significant stream of new


funding, ministers have always been clear that what they give today, on


another day possibly revoke them working, they will take it away.


This is meant to be fiscally neutral. I will give way. As the


perfect example of that is in Birmingham, which has been brutally


treated by this government. ?5.6 million from the front and changes


to the new homes bonus means it loses ?5.6 billion -- million


pounds. That is a very good point. There are many other local


authorities around the country who have seen the housing shortages


similarly disadvantaged by the secretary 's decision. As to what


extra responsibilities tasked to councils and which of these grants


the currently get for these responsibilities will be taken away.


They are not being properly funded no, ministers expect them to take


even more decisions while losing funding. I do welcome the


confirmation that it will not go ahead with his predecessor 's plan.


But as I intimated, that begs the question of what would happen to


other specialist funding? We have the Housing minister refusing to


rule out potentially the end of the ?3 million health grant. The


secretary of state has again promised nonlocal authorities will


lose out. Does that mean they will lose out not in year one because


there could be transition or doesn't mean every council will be better


off and move able to meet in full the statutory responsibilities


throughout the next Parliament? I know ministers intend to pilot their


approach to this policy in certain areas. It is crucial that the system


of top occidentalis is clear. It has been indicated that this will be


similar to the system introduced under the 50% business rates scheme.


That is not very reassuring. If 100% of business rates had been retained,


16 councils would have seen the funding decreased by 20% or more in


comparison to only one who saw an increase. 12 of them lost more than


2% of their funding. It would appear that to have a system of fear


funding under 100% business rates retention, the system of tariffs top


ups will have to be amended. Why pick this forward no without


publishing the responses to the consultation. Without even a date


for the fear funding review being published? It makes more questions


than it answers. I will ministers handle the business rates authority


in the wake of the major government decision, such as the building of


the major London -- really term terminus. London has always


benefited from business rates from Heathrow. Westminster has benefited


because of the proximity to major national assets. This will have


little to do with council policy, and all not be of benefit to those


who do not have the benefit of such major attractions. We will want to


explore what will happen if a major business closes or moves away from


the local authority concerned. There would be huge implications for the


local services of the major employer. What has been proposed


looks less than generous. We do not know for the needs of particular


councils would be assessed. The decision to allow only combined


authorities to introduce infrastructure appears petty and


vindictive. Too many big decisions around how


the business rates regime will work in practice are not sure clear. Too


many big decisions will also remember the Secretary of State once


the new regime is in place. That much is clear. And as the chairman


of the Select Committee made clear, it does seem a little drastic to


abolish the need for ministers to be held accountable annually for their


performance on local Government plans. There will be divisive


players on something or other on the House should be able to hold him to


account. Local Government in England and local services that people rely


been badly treated the party opposite since 2010. This bill could


make things worse. We will give the bill of fare listened to Knighton


seeks to improve it, but it changes forthcoming, will consider afresh


approached the Government's handling of this issue. There are 16 people


wanting to speak in this debate. Please keep to ten minutes or under.


I'm sorry the Shadow minister's glacier is half empty. He says this


Bill has the potential to be able to create a much better situation and I


think it has. But he also seems to emphasise he can't think of anything


worse. I'm glad he's not voting if the second reading of this Bill to


night. The minister referred to it as a once in a generation reform. I


suppose I'm at that stage where I can recall my involvement in the


1988 local Government Finance bill, when I was a minister taking forward


the uniform business rate and I'm delighted my honourable friend has


retained the principles which were set out in the uniform business rate


which was introduced in order to prevent Labour councils, for example


Liverpool, from attacking their own businesses and driving them out of


town and driving jobs away the process. I'm glad we are not going


to be allowing councils and the freedom to destroy jobs in the way


they did prior to the 1980 legislation. I also welcome the


embassy 's uncertainty and predictability. In that context, can


I asked my honourable friend if he will set out a little more clearly


how the reforms which he says are going to be brought into effect in


2019, including the new funding formula, how they are going to


interact with the four-year settlements which, as I understand,


will still be subsisting in 2019 and 2020. For example, adult social care


we've heard that councils can increase that precept by an extra


amount in the next financial year and ever after. But in 2020, they


would not be able to. Others arrange was going to interact with his


laudable objective of an judge using all these reforms in 2019 and 2020?


Madam Deputy Speaker, I wanted to say a little about a clause in this


Bill. Close for Micro is very relevant in relation to local


Government reorganisation. Each of the nine councils in Dorset are


currently debating and meeting to decide if they wish to go down the


road of a local Government reorganisation. One of the councils,


in fact two of the councils, Bournemouth and Poole, seem to


support the idea of creating a new unitary authority with Christchurch


in the belief that when that new unitary authority is set up, if the


Secretary of State was wise enough to -- unwise enough to approve it,


that on day one the residents of Christchurch would be paying ?200


more in council tax than the people living in the unitary authority area


invested in bars is in Bournemouth or pool. My honourable friend


confirmed last week it is not possible for an individual 's


printable authorities are levy a different Council tax in one part of


an area compared with another. I hope my interpretation of clause not


-- clause for is incorrect. Where we'd have a unitary authority


covering pool, Bournemouth and Christchurch, that from day one, the


people of pool and Bournemouth and Christchurch will all be able to


play exactly the same level of council tax. Because the council tax


at excessive levels has often been interpreted about excessive levels


of ingress that as the notes make clear, determination principles for


Wetherwick Council ties is excessive allows the Secretary of State to


make a statement of principles for determining whether or not council


size is excessive and covering a number of years rather than just


one. I corrects in thinking if there were a new unitary authority further


three mentioned towns, that the Secretary of State would be able to


say that there should be one set level of council tax starting from


day one? I raised this point because later this week, in both Bournemouth


and Poole, councillors will be invited to support this proposal for


a unitary authority in the mistaken belief they will continue to be


subsidised by local residents for 20 years. And if they were disabused of


that and told from day one they would be liable for an increase of


up to ?200, I think minds would be concentrated and would be as much


enthusiasm from councillors for what is being proposed. I hope I can get


Clare answers to those points, the essence of this is if councils


impose excessive levels of council tax on their citizens then there


should be the safeguard of a referendum. But what is proposed and


the local Government reform in Christchurch, Bournemouth and Poole


is that Christchurch people should be expected to pay extra Council


tykes but they won't have the chance of a local referendum to decide if


they wish to be abolished and absorbed within a new council. If we


can have referenda for levels of tax, why can't we have that for


whether or not the council is to be abolished? Something seems to be out


of sync. Can I also ask if my honourable friend can be clearer


about the pooling arrangements. Why is the Government taken the power to


introduce mandatory pooling arrangements and how will they work?


All the local authorities be able to be regarded as a pool for the


purposes of business rate income and distribution? If so, you may require


desirable, but why Mylar have to be imposed by the Government, rather


than agreed to locally? And my next point... I'm concerned some


businesses because of the powers given in this Bill, may find that


they are minorities in an area where they are subject to significant


supplements on their business rates. How will we make sure there isn't an


impression of a minority of businesses by the majority? The East


Dorset, there is a business improvement districts and it is


centred on a rundown industrial estate. When that was set up, it was


clear that as there was a lot of concern amongst some businesses,


they may end up paying extra for offering that was when they used to


them. I'd be grateful if my honourable friend because spell out


safeguards in place to ensure that hard-pressed businesses do not find


themselves in pose the pond with significant increases in terms of


supplements or additional business rates. And yet another point...


Clause nine. Christchurch Council has been privileged to whether the


toilet of the year awards on many occasions! And it has a great


selection of public conveniences as would befit the age profile of the


population and it being a very important tourist destination.


Meanwhile, the borough council in a pool has decided to close half its


public toilets, most of the rage of local people. Some councils are now


thinking outside the box and saying why can't we have joint arrangement


so that public buildings can be made available for public conveniences


and it doesn't seem to me on the reading of this clause that any of


these reliefs in terms of business rates will be available for a


building which is partially consisting of the toilet and as


other facilities as well. It difficult to speak about this


without punning. And I got the point across though. But why would we wish


to artificially restrict such a relief and said they can only be


available in a freestanding, dedicated public lavatory. On that


point, which does raise humour, I was attending and Age UK event and


apparently there are 2 million people in this country you can be no


more than ten minutes away from the toilet. If there isn't one


available, they can't go out. This is a serious issue that does need


money to provide it. In conclusion, this is one of the main reasons why


support small district councils which are accountable to the local


town and people. Does local people can then decide if they want more


money spent on public conveniences or whether they wish to have money


spent on public parks. It is better to leave that to the discretion of


local councils and that's why I'm against the imposition of unitary


authorities in Dawson. In passing, I note the honourable


member for Christchurch gave himself credit for the uniform business rate


system, but didn't give himself credit for the other part of that's


when it came in at same time. feeling the the community charge


delivered ready reckoner for local people. I will reappear to the first


report from the select committee. As we were doing our enquiry, the


government announced a consultation and this was a list of things for


them to consider. There are many things which to need looking at. I


will not go into the general issues of local government finance. I think


they have taken the fair share of the austerity measures since 2010.


My only real Sheffield have enjoyed more than their fair share of the


local cops. But I do welcome aspects of the devolutionary they mention


that the government are heading for. I understand that they have more


control, but they have to have more control of raising the money in the


first place. This bill in a small way, a very small way, goes in that


direction, but it we are still the most centralised country in western


Europe. I think the minister was getting slightly carried away when


he called it a revolution. I do not see this as the revolutionary change


in local government finance. Local authorities having to rely on the


council tax. It is the only tax or in local government we are has to be


a referendum to increase it by a certain amount. A little point in


the proposed legislation is that this house in future will no longer


be able to approve those decisions on the threshold at which local


councils have to have a referendum with regard to rises in council tax.


It is something else which has been taken off from this house. I felt we


can debate this. There is also the retention of the growth imperative.


There is no power to determine to reduce the multiplier or in the case


of this supplement, for the very different cases, for combined


authorities to be able to increase the business rates eye of a small


moan for specific projects. I think it is good if councils have the


ability to work out business rates multipliers. That would take us back


to the system before the Honourable member for Christchurch helped bring


in the new legislation. The multiplier limited ability to raise


business rates. It is limited control. It still leaves it in a


very centralised system indeed. Some important details. The appeals


system. There is an enormous amount of evidence that the appeals system


is a major problem for councils. The cost of any appeal falls on


individual councils. I understand local authorities are holding back


?1.5 billion in reserves for appeals. Theoretically percent of


the business rates risers were subject to appeal. That is a very


high number. By far the biggest challenge in this legislation is how


you marry together the need to incentivise against the need to


equalise within the system to recognise those authorities which


cannot grow the base as rapidly as others. How you do that? You cannot


do it with one tax. It is like a golfer trying to play around with


only one club. I be not going to keep some of that back to help the


equalisation which might make the system a lot more simple.


Equalisation could never be simple, but this could make it a lot more


complicated. I hope the ministers from about that. I will the fact


that they are doing the needs assessment with the LGA. But then we


get onto the complications of resetting within the system. If you


do not reset often enough, local councils who struggle just over a


longer period of time. I think there was an interesting idea that you get


to the point at Aycliffe edge, all the new business development you


have had is no going to be reset. What happens if you have the new


development before the reset, the local council does not necessarily


want to encourage the development because of it waited a few months,


it would get the benefit of the reset. And we going to have a new


assessment of the period of the needs assessment? Or is going to


last in perpetuity? How is it going to working with the reset? I think


it would be much easier to do that if you had it kept as a separate


brand within the system. I accept if you had a separate support grant you


would need to devolve even more powers to local government. It may


be easier to do in the spirit of devolution to give them more power.


The attendance allowance was taken off the agenda in the select


committee report. The things in relation to transport, skills and


economic development, there's hope they could have an immediacy and


linking the money together. In principle, the money taken from


business rates was for a business activities. I would also say, we


have to look at the sections of the powers of section 51 to give


guidance. We cannot look at the system without looking at social


Kier. We have to have long-term revised arrangement with regard to


social care. A real concern in our enquiry is that social care demands


are likely to go up faster than business rates. If we are relying on


business rates to fund social killer is going to be a growing disparity.


The system will never succeed in doing its job. Let's have an


independent look at social care with some other form of funding needs to


come in to support it. I will give way. He is making a very good point


on social care. One solution is plucked out of the ear and regarded


as being a golden bullet to tackle a real crisis in funding of social


care. It is going up by 5% a year in most local authorities. We DC have


that could be incorporated into this bill. I just think the government


has to be thinking for the longer term. If they are going to reform


the business rates system to start in 2020. One of the responsibilities


of local councils is that if we do not address social care and the


demand continues to rise we actually are inventing a system which has to


feel. I want this to succeed. I want to see more power devolved to local


councils. But for that to work, we really need to address this problem.


It is a real issue. One other point, the previous Chancellor announced


plans to extend small business rates exemption and to change the really


multiplier was calculated. That would reduce the amount of money


local councils got from the business rate. This either rugby compensation


for these changes. They will be reflected in the amount of money the


councils get. What of the Chancellor was to make some similar changes to


the business rates system, how would local councils be compensated if


there was no appropriate grant? It is a very important point. Nobody


wants to give up the poor to give up the ability to change the business


rates once it is set, but I think the grant claiming powers have been


removed. It is a very important point. But this is a fairly small


step towards devolution, to give council more power to spend more


money and have control over the money that the raise and can spend


on the important services. I cannot go along with seeing it as


revolutionary, but they would see it as a small step. I look forward to


seeing the future consultation on this. It would be remiss not to


recognise and congratulate the Secretary of State who will be


responding to this debate on his birthday. What a way to spend a


plastic. The Guardian suggested he was only 45 years of age. I commend


the government on its more flexible approach to local government


financing. I would also say that it is a pleasure to speak after the


honourable gentleman. I she has concerns about the way in which


local authorities may faint owners alike in the system by holding back


on new developments to make the benefit of the reset. We have to


look at other possible ways that that could be addressed. The City of


London Corporation says the ungrateful for the provisions which


will see councils compensated for losses from valuation changes. This


is particularly helpful after the property downturn in the City of


London. It is a substantial rate in the business rates retention scheme.


Close to addresses that and is very welcome. Efficiency, there should be


discretionary power exercised by the Secretary of State and I hope we


will get confirmation as to how he says that power will be used,


particularly queer full compensation is going to be provided for losses,


it is also correct to say the support the City of London feels for


the waiter devolution proposals put forward by the LGA. The city wants


to retain a greater proportion of the business rates because it has a


very small residential population. I hope all the non-London members will


feel that we started looking at feel that we started looking at


government finance, we look at the position we start from no. There has


been a an accumulation of legislation going back many decades.


Few would want to go through the rigmarole entirely from first


principles. The principles of the is that many of these things may rule


colleagues will feel simply give you get advantages to London.


I wanted to turn to the western part of my constituency, Westminster City


Council, which is seeking Government support for its western partnership


investment programme which may incorporate parts of the London


Borough of Camden. This idea aims to maintain private sector investor


confidence at a time when businesses are anxious in the imminent impact


of the business rates and evaluation and they will be looking for this


programme to work alongside this particular bit of legislation. It


would consist of transformative works to improve the public realm


and the environment in the West End of London, such as Oxford Street,


which will in turn secure finance and trigger additional investment by


landowners and business occupiers. I accept my local authorities than


usual. Westminster contributes 3% of UK tax revenues, making it the


highest single contributor of any borough and has the highest business


rates collection the UK. It is currently at ?1.8 billion a year,


rising it is assumed, to about 2 billion in the next financial year.


Ratepayers in Westminster contribute to more business rate supplement and


all London bus combine, including some billion pounds towards


Crossrail, with businesses in Oxford Street is contributing half of this.


I appreciate capacity of West End businesses to continue contributing


business rates and revenues for other projects such as Crossrail to


is highly dependent upon confidence in the West End operating


environment. Major investment to street furniture and infrastructure


will be required to be End up to the standard expected by the firms


located there and for the millions of people who visit. Existing


authorities are simply unable to address these problems and I


appreciate that when you present two parts of this central, global city,


often, you can't have a mechanism that can be applied, there has to be


a sense of being an exceptional state of affairs. It is resolutely


designed to improve the dwell time of visitors here and their average


expenditure, reversing a recently declining trend compared with other


world cities. This will improve tourism and it's an important point


to make. It includes the Soho media cluster to the south of Oxford


Street, the Harley Street medical cluster north of Oxford Street and


the creative quarter around the Strand area and of course, the


significant financial services sector which is no longer just a


cover-macro city, be very much in the Mayfair and Saint James's area.


As far as London is concerned, supply chains will reach out to the


UK regions. It is often said London gets a good deal. We get all the


infrastructure development, whether infrastructure development, whether


important to make a vital case. A important to make a vital case. A


lot of our money coming into London, if it didn't come to our capital, it


wouldn't come here at all, but another global city. It's also the


case that the money invested creates jobs, contractors, construction jobs


will go beyond the capital. Certainly for those of you, those


members who are walking anywhere nearby here, whether it is Victoria


Station or the West End to see what is happening with Crossrail. Huge


numbers of jobs are going to other parts of the UK. The truth is, that


investment does have great benefits John London and therefore, we need


to not look too harshly toward special pleading from the capital


city for future elements. It's an important point to make. Because of


the iconic opportunities in central London will hinge upon the outcome


of a funding decision of the Western polishers programmes which I have


referred. Many overseas retail brands and concepts new to the UK


will be trialled here in central London of course before being rolled


out nationally. These flows between London and the provinces are often


two way, with London dependent on supply trains in the region and


those regions be very dependent upon London's performance. If the capital


succeeds, then there are benefits for the rest of the UK. It is not a


0-sum game. It would be icing foolish to go to the success of


London because the rest of the London because the rest of the


country also would then suffer. My authority in Westminster believes


the programme it has in mind could create billions of additional output


can generate even more. By producing additional floor space that


increases revenues above projections for business rates. The private


sector is prepared to invest in a joint up and strategic approach to


development in the West End consisting of cash payments from


firms and business occupiers toward the public realm and roadwork


packages. My authority has submitted that to the Treasury last year and


discussions are ongoing. The core of our programme costs ?800 million,


and of this, 400 million will be required from the existing sources


available to Westminster Council such as cash contributions from the


private sector and our own community infrastructure Levy. The preferred


funding option would result in Westminster Council really sink


potential for something. Business rates, which were looming


nightmare for many smaller businesses in my constituency and


applies to much of London, but also be the capital city. I appreciate


the Government has put together a welcome ?3.4 billion relief scheme


nationally and that is designed to benefit the capital city more than


any other region. Nonetheless, most recent consultation did not provide


some London authorities with sufficient time to work out the


extent to which our local businesses be affected. I would make this


appeal to the ministers, certainly Westminster City Council would like


to see something similar to the 2010 relief scheme and very much support


the suggestion that we must bring rateable value into three categories


to recognise the varying abilities of small, medium and large


businesses to pay business rates. Now take this opportunity to which


the Government a great success and I hope it is the first of many moves


towards devolution. It has been pointed out this country


historically has a centralised tax base of any western European


country. I can't be healthy. Not if we are to have a thriving local


democracy. This is an important step forward. Is a pleasure to follow the


previous speaker. I will support the front bench, but I must say, I'm


suspicious, because we've been here before with the Conservative


Government. I've been in local Government although Roberto the


Fatah's years. -- all the way back to the Thatcher's years. One


particular carrot used in local Government bike in the days of


Margaret Thatcher was local authorities being told they could


give the capital receipts. Initially, they were able to keep


going gradually, that was phased out. So let us be careful about the


Conservative front bench enticing us to go down a road we may regret,


because it seems to me the strategy is shifting the burden away from


Central Government for certain services onto local Government and


anyone with any experience of local anyone with any experience of local


Government knows there will come a point with Central Government will


be wanting to couple local Government because they'll be saying


to them, you're spending too much money. We've been down here before.


I will cautiously go along with the debate subject to if were able to


amend. Having said that, he would be remiss of me not to talk about


something or other as we outlined earlier. It suffers from potential


job losses, library closures, youth services being reduced. There's a


whole catalogue. Coventry has had the same problem. It's worth noting


that since 2010, there's been a 40% cut in Government funding to local


councils. It is full to possible choices onto local authorities. His


force them to scale back services as demand increased. The funding gap


for local councils is massive. Currently, these places find it a


cute. Funding has been cut by massive 45% since 2010.


This reduction is expected to rise to 55% by 2020. There's no way to


make it up. Unless you local taxation. That's what I alluded to


earlier on. But looking a social worker, the pressures create a


massive gap by remains between the resources available and funding


across the country. The precept of across the country. The precept of


by the Government can't make up the shortfall. It's a panic measure that


offers too little, too late Morse amend the idea of a postcode


lottery. Quality depends on the affluence of residence. These


pressures been highlighted recently. They plan to increase council tax by


15% and certainly the council do the same thing on local rates increases.


This is a Tory run council in an affluent area. It is an omission or


failure in the policies of this Government and you must ask if


funding is so tight in Surrey, why must everywhere else? More must be


done to integrate health and social done to integrate health and social


care and certainly in the last Labour Government, they did want to


get on board to create an get on board to create an


amalgamation of national care services. That was rejected. Failure


to deliver and a breakdown in delivery, when we look at business


rates, have the retention is welcome. This correct that they can


shape their own services, but not at the expense of regional inequality.


Poorer regions must not suffer at the expense of which are ones.


Finally, once these changes come into effect, I urge the Government


promised no area will be worse off for these changes. I also asked them


to provide clarity on how this revenue will be distributed, so


there's a level playing field. I also think that the minister should


be accountable every year. We need to be able to put our case


in the chamber. I rise to speak in support of the Local Government


Finance Bill. I am glad they are committed to devolution and took a


greater power to local authorities. It is good that councils have the


money to spend really feel it is needed most in the local area. I


know how important it is for local councils to be given the money to


manage their own affairs properly. But the aspect of business rates is


absolutely essential of the councils are to be able to carry out the


It is essentially are able to obtain It is essentially are able to obtain


this money and spend it we are necessary. As at the moment, the


business rates system is very complex. In its current form,


there's little incentive for local authorities stimulate growth. 50% of


this is a very clean. This will be a challenge and we need to acknowledge


that. All parties will have two drastically adapt to a new way of


thinking and undergo a cultural change in order for the change to be


a success. It is my hope that the Bill will push councils to more


self-sufficiency and away from dependency local government. It will


work more in tune with its local work more in tune with its local


authority. They can then talk about business rates and get a better


understanding of how the other works. It gets a better dialogue. I


think it is very important for future employment. Thank you for the


intervention. With the changes, it will be a lot easier to show


businesses and residents really revenue is spent and the direct


impact of the decisions. As a casual reader, I was always very


frustrating to me to explain the complex funding system to frustrated


businesses and residents. I was also pleased to see within the Bill that


the government will raise less than the competing areas do not


necessarily lose out. But this should never be used as an excuse to


never fight for investment. We recently held an enquiry into


business rates and we cannot underestimate the significance of


the reforms but could lead to even more problems with local authority


spending if it is not managed properly. It is my hope that


councils believe the higher income proposals mean they will seek to


reinvest the money. One final point is one of the recommendations


suggested that the small business rates will not get such an incentive


that the focus will be on much that the focus will be on much


larger businesses. We need to make sure that the small businesses have


plans plans put in place so that 100% business rates potential will


be helped used to encourage the potential of all businesses, not


just the larger ones. I think this just the larger ones. I think this


is part of the devil you shouldn't the party has been working towards


since being in government. By allowing councils to focus on their


own priorities and offering facilities within their own business


environment and keeping a more efficient system of government.


It is a pleasure to follow the member for Northampton South, who


like myself has experience of local government. I welcome the bill in


principle. I want the ability of councils to make spending decisions


closer to home. It is something we have argued for a long time. My


worry is that it will do nothing to solve the crisis in local government


funding. It was a missed opportunity to support local government. That is


nowhere else in the public sector which has been hit harder by


austerity than local government. I was executive member for finance in


Manchester City Council. I experienced first-hand the


consequences of that. The result was the government outsourcing the most


difficult decisions to local authorities. It meant the local


councils having the blame put on them rather than the government


centrally taking a sales. I have some suspicions about this type of


intention. I will not forget the role of the Liberal Democrats who


are not represented here at the moment. But without whose


collaboration with the Conservatives, local government


would not be in such a mess as it is right now. Every year, we face


impossible decisions as to what services to close because of huge


funding cuts imposed on us. We have had to take out more than ?300


million year-on-year. There will be a ?600 per house cut in funding.


4000 staff. How are councils continue to deliver services


properly with those sort of reductions? I knew that when making


these difficult decisions the full effect would nicely be seen for some


time. The full effect is no being seen. Since 2010, there has been a


reduction of ?77 million in Manchester on adult social care in


top of the ?11 million reduction in the public health can. Is it any


wonder then that we have this crisis in adult social care around the


country? I can to the remarks need bigger cheer of the select committee


that we need to look look at how we fund adult social care in the


future. The most important thing is that in the short term, this bill


does not represent any additional funding for councils. It is fiscally


neutral. While I welcome the principles of some of the measures,


I support the ability of local councils to protect business rates


revenue, there has to be protection for councils who are less able to do


that. More questions than answers are raised in this bill with regard


to funding. There is no clarity on the most important thing, which is


how the government will handle the need for a redistribution mechanism.


How a fairer funding formula will operate? What is the outcome of new


replacement top and tariffs? We keep getting caught taunt councils will


not lose out. I know there is good to be a review of the needs


assessment, but I hope the house will forgive my scepticism. I have


seen this commitment to funding previously. We have seen councils


losing out over and over again. I am listening very carefully. Will he


not acknowledge that rural counties and rule councils have been


underfunded by central government for many years. This will be


addressed the gap which has been in place for a very long time. I will


give an example. In Manchester, we calculated, if we had a fair share


?1.5 million better off in terms of ?1.5 million better off in terms of


local government spending. In terms of the abolition of the revenue


support grant, I agree with my support grant, I agree with my


honourable friend. I would approach this with some caution. Councils


have a different level of dependency on it. In Westminster, the only need


to retain a percent of the business rates Duke of the level of grant. In


the Wirral, they would require 157%. 259% on Tyneside. That illustrates


what we make them the London problem. How do we address the


ability, the much stronger ability of the city, particularly in the


City of London to raise revenue. That will be all likelihood


exacerbated by the likely host praising index. In real terms,


London will be able to pay ?700 million more than everyone else will


be raising less consequently because of the indexing. Unless the


government makes clear how they are going to redistribute funds, we run


the risk of cooler areas being left behind. Particularly in areas where


business and industry has been in long-term decline. There are


genuinely difficult solutions. In Manchester, we have even very well


run council. There are plenty of areas around the country struggling


to drive growth in the future. Forgive me if I want to see the


detail before I will totally recommend this legislation. That is


simply too much that is unclear, including no clarity for example on


specialist grant funding. In the very complex world of local


government finance, it is very easy for the government to go under the


radar by arranging special discounts. It is not an unusual


mechanism for governments to be able to force difficult decisions on


local councils. I will focus on a couple of up positives. The ability


of the councils to have the business rates multiplier. I am pleased to


see powers being given to local authorities to fund local


infrastructure projects. That has to be good news. I do welcome the


settlements. It is a much more sensible way of allowing councils to


fund in the future. There are some things that they support in


principle, but they cannot support it now without a lot more detail in


some sense that the government knows how it is going to address the


addition -- issue of any quality, how it is going to make sure that


areas like Manchester are not going to lose out. Thank you. It was a


pleasure to follow the honourable gentleman on the opposite bench. Can


I start by saying the timing of this is perhaps unfortunate. In South


Dorset, this garment shake-up is something of a perfect storm.


Everyone's mains seem to be on combined authorities and the worry


about how this money is going to be allocated. The government is heading


that way. Can I also say happy birthday to the secretary of state.


Devolution is one of these things which I do endorse. It is important


we have more power to make local decisions. I think there is an


agreement across the house about that. But government responsibility


to ensure that there is fair play and the difference between urban and


rural and the puller and wealthier parts of the country are equalised.


If you go to one system, business rates relating to this, as I asked


earlier, it does raise the question, will cooler parts of the country or


rural areas get the funding they deserve?


My other concern is that as the pressures on finance grow, the


perception from many of my councillors is that the government


is putting more of the tax-raising powers into their hands, which they


are not so keen on if they don't have the resources to ensure is


distributed properly and fairly but I raise that is one concern. Overall


I welcome the path the government is taking. I asked around as is my duty


to do by several people, councils what they thought of the bill and


being an MP I must act without fear or favour so it's my duty to raise


five break points that have been raised. The New Homes Bonus, adult


social care, the business rates appeal, second homes and the general


point on underfunding. If I could touch briefly on five. New Homes


Bonus, the significant funding change set out in February 16 has


seen a reduction, six years worth of funding down to five years and four


years from 18-19 onwards. Worryingly, the in-built so-called


dead weight of 0.25% set out in the consultation was suddenly changed to


0.4% in December 2016 nine months after the consultation closed. I ask


colleagues forgiveness for the dryness of my words but let's face


it, the subject is fairly dry and can get rather detailed. The scheme


was designed to reward councils for building new homes but this dead


weight, the incentive has been removed or risks been removed. In


Weymouth and Portland that dead weight is 108 homes, so in 2016-17


they built 234 homes but the New Homes Bonus was received for only


126. The incentive was removed. There are no transitional measures


to limit the impact. The calculation is based on band D, which


disadvantages councils like Weymouth and Portland with the village


properly band B. Even if the authorities see substantial growth


in the number of homes, the New Homes Bonus doesn't necessarily


benefit to the extent the government would perhaps like. It's predicted


that Weymouth and Portland will use shy of ?1 million in New Homes Bonus


between now and 2020. The Society of District Council treasurers have


made several points about the government's plans, saying they are


severe and come so late in the budget plan and process that many


authorities have little option at this stage apart from reducing their


reserves. As society touches on this point of 0.4%, is far more drastic


than 0.25% mentioned in the consultation. Emerging local plans


including substantial number of new homes often face fierce opposition


and no more is that true in my seat. These plans often tempted by the


promise of funding by the New Homes Bonus. In cash terms than award has


now been reduced so the resistance to new homes is even greater. Moving


on adult social care, there's no doubt in my view and again this is


across the House that there is a crisis, I don't like to use that


word because a crisis is considerably more serious than the


situation now, but there are very serious concerns that we all have in


this house about this particular subject. Business rates really do


nothing in the view of this I've spoken to address urgent needs. The


?240 million across the country in savings from the New Homes Bonus


reform is going to social care in a one-off grant. This means that while


social care gets resuscitation the council is of course lose out.


Taking funding from district councils like this forces them to


review discretionary services like low-level support to older people


and other vulnerable groups and we've also talked about public


conveniences and the interesting fact, I had no idea until I listened


to this debate by a duty that 2 million people cannot be more than


ten minutes from a public convenience. If they don't there is


a disaster and for many unhealthy people, they don't leave their home,


so in effect we are forcing them to stay in their homes and that can't


be right. In addition, authorities get all of the money and two your


councils like battered south have to split their revenues the District


Council loses and this county council games. Social care is


delivered through a grant which favours the Northern metropolitan


areas and is taken away from councils like ours. South Dorset has


an increasing elderly population which will only get bigger and


therefore the impressions on adult social care is only going to


increase. On the business rate appeals, they are growing and they


are costing. Under the new 50% retention rate rules, local


government must pay 40% of appeals and settlements against business


rates. This year, the company that runs the onshore oil platform on


Micah ?5 million appeal and the Ministry of Defence won 22 5p


appeals for the two army camps, both against the District Council. 40% of


7.5 million is ?3 million payable by the District Council directly. It


try sticky ?1 million a year as a safety net so that's three years of


Safetynet wiped out. On second homes, the viewers that these house


prices are put up and reduces the number of local people living. Again


that's a concern across the House. So long as a second home is


available to rent for 140 days per year, it is registered as a holiday


let, liable for business rates, it avoids council tax. This lowers the


cost of home ownership for those who least needed. They live tax-free in


a second woman said of tax-free on a small business as was intended. --


second home. Business relief on second and makes a variable


difference of district but a huge difference to county council and the


Chancellor. At least 200 newly registered second homes in the last


couple of years will see a loss of half ?1 million per year in revenue.


At the moment, Purbeck district has or has to assess how many homes to


build and then automatically adds 10% similar to counteract the effect


of second homes. The chronic underfunding of district councils in


the view of those I spoke to is not addressed by the Safetynet, it is


not addressed by the transition grant payments which only increase


uncertainty for budgets every calculated every two years. But rest


by paying ?65 million to the upper quartile of super sparsity local


authorities. Services should be separately funded, that's their


view. Finally, it's not addressed by top slicing of the New Homes Bonus.


The New Homes Bonus should be separately funded as well. With


those points I conclude, although as I said at the start as the minister


stated and are very happy birthday to him, I support the direction of


travel but I am concerned with much of the detail.


It's a pleasure to follow the honourable member for South Dorset


and I'm sure his comments will be listened to with great interest by


ministers opposite. The reform of business rates is of course, as many


others have said in principle, welcome. But the minister did make


very big claims in his opening speech about the benefits that would


follow from it. For example, he used the argument that the measure would


be fiscally neutral in response to my honourable friend, the member for


Coventry South, and yet we've had no convincing arguments as to how, what


the mechanics of making it fiscally neutral will actually be. Indeed, my


honourable friend from the front bench from Harrow West made similar


points and yet so far we don't seem to have had any clear answer to


those queries. For me, the two tests will be, first of all, will the bill


itself unable the resources to get to the areas of greatest need, as


others have already referred to. Secondly, will it be fair to counsel


taxpayers, businesses and local authorities? Before tackling


directly some of those issues and how the bill itself will work in


relation, I need to say a few words about the wider context of local


government funding and services. In Knowsley, between 2010 and 2020, the


budget of the local authority was reduced by a staggering 46%. Let me


repeat that, 46%. That equates to come in cash terms, ?94.7 million.


In other words, Knowsley has already experienced the biggest cut in


government support, which is largely where those figures come from, of


any local authority in the United Kingdom. It's quite right that I


make some concerns known about the problem we've got and we'd like to


relate them to what is in this bill. That means that these things don't


happen without consequences. As the National Audit Office made clear in


2014, local authorities at that time, all local authorities in


England, had already experienced a real terms reduction in funding of


37%. That was since 2010. That in itself represented, in terms of the


council's income, 25% cut. You cannot sustain those sorts of cuts


without it having consequences. In 2016, PricewaterhouseCoopers in a


report commissioned by Lancashire County Council, said that there is a


significant risk that the cost of statutory services will exceed the


financial responsibilities available to the council. In other words, what


they're predicting is that there is a real possibility that a local


authority, that particular one but I suspect that applies to many others,


may not be able to function in a legal and proper manner. Such cuts


do have consequences, for example in Knowsley between 2015 and 2020,


schools on average face funding cut per pupil of ?240. Despite the


manifesto commitment of the Conservative Party to protect such


funding, many schools in my constituency will be badly affected


by that. So how does the bill address those problems?


Unfortunately on the basis of what we've already been told, the answer


is we don't know. The Minister talked about focus but too many of


the details are still too fuzzy for us to make a rational assessment of


how it will work. We do need the measures to be stress tested. In a


briefing that I got from the Liverpool city region, they said and


I quote, on the question of the Liverpool city region pilot scheme,


despite submitting its formal proposals regarding the scope of the


pilot scheme to the Department for Communities and Local Government in


October 2016, the city region has till has no indication of what the


pilot scheme will look like or even when the details of the pilot scheme


will be provided. This is now so severely hampering our ability to


plan effectively for the pilot schemeimplementation in 2017. Even


the testing that's taking place, the people expected to do it don't even


know what the terms of the testing is going to be and frankly that is


something, a matter of some great concern. I want to move on to the


question of additional funding for city regions like the Liverpool city


region. Today I was at the launch of my honourable friend, the member for


Liverpool Walton's campaign to be the first-ever elected city region


and he made a very good fist of explaining how he wanted to use it.


But when he does come in, there's so much uncertainty about how the


powers and resources available will be able to be used, particularly in


terms of the infrastructure resources that it's actually almost


impossible to see what measures will be available, what resources are


available to carry out some pretty critical infrastructure changes.


I won't say anything much further but it seems the two tests I set at


the beginning, about whether we will get resources to the community 's


most in need, they still haven't been met because we don't know


enough detail on how it will work in practice. I would appeal to the


Minister, when he does wind up, to give a commitment that he will start


talking to Liverpool's city region Council leaders who are at present


running the combined authority and the mayor of Liverpool. And also the


candidates who will become hopefully the next city region mayor, about


how all this is going to work because, at the moment, the complete


lack of clarity leaves people bewildered. I'm sure he would agree


we don't want the position of local governments to be in. So I hope we


can have more dialogue on this. I'm not opposed to the principle but we


do need more detail, we need more clarity and more dialogue, and I


hope we will get that. It is a great pleasure to follow the


member the Knowsley, and can I also wish the Minister a very happy


birthday. I hope he will get some time to enjoy his birthday and two.


Madam Deputy Speaker... I am very grateful to have the opportunity to


speak in this evening's debate and I'd like to focus my contributions


on part one of the bill which builds on the reforms of business rates


which were undertaken in the last Parliament and extend business rates


retention from 154% to 100%. I welcome these changes as I see it as


a key part of a devolution of powers and budget, and remove from local


authority's reliance on central government grants. These reforms


will give local authorities greater control, responsibility and


accountability. I also believe this is a great way to provide councils


with something they find very important, financial certainty. I


was a local councillor before entering this place. I know how


councils set their budgets, and the challenges they face when doing so.


Councils planned their budgets many years ahead, and this requires a


degree of certainty. Having our way of protecting their financial


position for years ahead is very much in the interests of local


government and allows them to plan projects and services the years to


come. And the whole, local government is very efficient, and,


for many years, has shown all of government how you can do more with


less. There are many local authorities that deserve to be


congratulated on their budget in these difficult times, and have


protected front line services by sharing services with other


councils, investing wisely, developing the local economy, and


many other actions that have seen them rise to the financial


challenges. There are various aspects to the bill which will give


local authorities more control, including the ability to set and


reduce the business rate multiplier, creating incentives for them to grow


their business rate income. Rightly, these reforms are fiscally neutral,


so with the retention of business rates come additional


responsibilities. As a consequence of devolving these powers, there


will inevitably be greater accountability. The power and


decisions local authorities make will directly influence outcomes for


local residents and businesses. I also know that local government


relishes new challenges. There are many services they want to get


involved in, for the betterment of the local communities, and bring


their passion, drive for efficiency, and something they offer above all,


their direct connection with voters. However, business rates don't always


offer councils certainty, and there can be an issue when a council faces


a large ratepayers closing their operations. Whilst I wholly agree


with the government's plans to extend business rate retention


there's one issue I'd like to address this evening, and that is


the protection for local authorities who are faced with significant rates


losses. Madam Deputy Speaker, last year, Risley B power station ceased


operations. This was incredibly disappointing news for the employees


and contractors working at the site, and also the local community, as the


power station had come home to a large number of sports clubs and


recreational groups. It has also hit the local council, Cannock Chase


district Council, very hard. The closures sees them lose ?1 million


in business rates per year. Unfortunately, though, it is my


constituents, my residents, businesses and charities who are


paying the price for the failure of the Labour run local authority to


plan for this. Anyone who's worked in business will be familiar with


swot analysis. With the scale of business rates losses and the impact


this would have on the financial stability of the local council, the


possibility and threat of the power station closing should have been at


the top of the council's priority list, and issues to prepare for. The


council would have been aware there was always a risk that a 40-year-old


coal-fired power station would close and was coming to the end of its


life span. They should have had contingency plans in place. The


consequences, cuts to services which will adversely affect my


constituents. They should have planned soon for this eventuality,


and embarked on further efficiency measures sooner. They would have


been a neighbour to position now, instead of defaulting to an argument


of blaming the Conservatives for their financial woes. Especially


when they are better funded than their neighbouring three district


councils. But all said, the impact of the business rates losses should


hopefully be a short-term issue. With the designer Outlet Village to


be built in Cannock, this gap will, to some extent, be met. This, in


conjunction with the redevelopment of the power station site, should


see business rate growth for the Council in the medium to long term.


In fact, I believe, with ambitious, bold and visionary plans, we could


create an incredibly bright future based on a new industrial landscape


which will serve the local community for decades to come. One which


creates highly skilled jobs for future generations. But we have in


the short term a shock to manage. It is my constituents know who are


having to deal with Labour council 's failure to balance their books in


the short. I'd like to urge the Minister to consider transitional


funding to see the council through the next couple of years. I, for


one, don't want to see any obstacles in place to the redevelopment of the


power station site and the regeneration of Cannock Chase more


broadly. Whilst I believe the council should and could have done


more to mitigate the impact of the closure of the power station, in


terms of business rates, it raises questions as to how we support and


protect local authority from significant shocks of this nature.


Particularly as we move towards 100% business rate retention. To conclude


my remarks, I'd like to ask the Minister three questions. What


measures are being taken to support and protect local authorities from


the impact of power station closures, or for that matter, any


business that is a significant business rate contributor? What


discussions has the Minister had with his counterparts to manage this


transition, and help local authorities as we phase out coal


fired power stations? Finally, what support can the government give to


local authorities to help them regenerate large development sites


which will then attract high-tech businesses which will, in turn,


create highly skilled jobs? Before I called the next honourable member,


the last two speakers have been very disciplined in taking only eight


minutes each. If everybody now restricts themselves to eight


minutes each, I won't have to put on a time limit which will make a much


more pleasant and better flowing debate. It is a pleasure to follow


the honourable member the Cannock Chase. This is an especially timely


debate because it comes just after the prime ministers spoke to my


local paper, the Grimsby Telegraph, about planned funding for my


council. Which was asked how the government's cuts to some of the


least well off areas in the country squared with her promise to help


those people who are just about managing, she suggested that


north-east Lincolnshire was receiving more than enough funding,


and taxpayers in the Yorkshire and Humber region had no reason to


complain about the council tax going up. The fact is that north-east


Lincolnshire has seen its budget cut by some ?79 million since 2010, that


is as good as chopped in half. On the ground, that has meant that


recycling has been cut to a fortnightly collection, charges the


bin collections have been introduced, and they've increased


children's centres, merged into new hubs, and public toilets also are


being closed. On that point, can I ask the Minister to expand on clause


nine, under the convenient heading of release, and just ask if that


relief will come too late if the public toilets have already been


shut? I raise this point because, not only for Great Grimsby


constituency, but the neighbouring constituency, Cleethorpes, a big


tourist area, that is a significant concern to local people at the


moment. If the relief comes too late, I'm sorry to keep using these


phrases! The reality years those facilities won't be there for other


people to use and organisations like Age UK, which has already been


mentioned, and others lobbying hard to make sure public conveniences


aren't lost going forward because this is particularly important for


parents of disabled children and young children and, indeed older


people to make sure these facilities are not lost. On a visit to almost


in South Parade Academy last Friday, I was asked by the schoolchildren if


I could make sure there were more bins near shops because they've


noticed that litter is starting to pile up. It might not make the front


pages but these are the sorts of things that unnoticed, and really


matter. The increase of fly-tipping, a blight on all of our communities.


As the honourable member mentioned earlier, the cuts have taken the


time to impact on local communities but it really is starting to be felt


and starting to be felt across the piece. This isn't a Labour council


versus a Conservative council at all. This is communities across the


country that are affected. Perhaps the worst way in which the cuts to


the council 's budgets have been felt have been in the care sector,


and the knock-on effect this is having on the NHS. Government cuts


to my counsel's budget have caused spending to social care to fall by


20% and I've given examples before in previous debates about how this


is forcing people to live in unacceptable conditions. It has also


become clear this winter the government's downgrading of the


social care system as having catastrophic effects on our NHS. The


so-called bed blocking where patients are fit to return to their


homes or move to a care home but there are no places or in-home


support is available. That is sapping hospitals. The outrageous


circumstance at my local hospital of 95-year-old woman discharged from


AMD at four o'clock in the morning because there were no beds


available. People in north-east Lincolnshire are facing a 10% hike


in their council tax bills over the next couple of years because of this


government's policy. With no prospect that that amount of money


will be enough to fix these endemic problems. The government's Autumn


Statement showed an increase in business rates income to the


Treasury of billion in 2017-18. That still remains unallocated so why


doesn't the Secretary of State and the Minister protect people from a


massive rise in their council tax bills by investing that money and


social care and ending the precept? For those members opposite to might


think I am making a partisan attack on the government, I would point out


that my conservative neighbour, the honourable member for Cleethorpes,


has also gone on record calling for an end to local authority cuts,


saying that many of the things that make our lives a little bit better


are being cut to the bone. The Prime Minister said in the interview that


I mentioned earlier that cuts to the council, like north-east


Lincolnshire, were necessary in order to eliminate the deficit but


that goes no way to explaining why the lowest income areas are facing


the harshest cuts. They are generally unable to raise enough


funds from local business rates because we just don't have the


ability to do that. While the Prime minister's local authority is one of


three councils to suffer the least. I'm very grateful to her forgiving


way. She blames the current government the plight of the finding


in her local authority area. In North Lincolnshire, the spending


power of all the income from North Lincolnshire, ?711 per head. In a


typical local authority area in the top ten local authorities in London,


its ?1171 per head. Isn't it the system at fault, not this


government, it's the way the the money is distributed, not according


to need or what happened previously. I wouldn't agree that it's just


about the system following what has always been. There does need to be a


reassessment of where need cars and it's not just about following the


previous system. I would say that ?79 million worth of cuts is nothing


to do with what's happened before, is to do with decisions that have


been made over the past seven years. As my colleagues on this side of the


House have said, we are broadly supportive of the principles in this


bill but I would say that for me to support this bill, my constituents


in Great Grimsby would want me to ask the government to make sure that


my local authority is absolutely no worse off than it is at the moment


in the future. It's a pleasure for me to follow the


honourable member for Great Grimsby and I'm pleased to be able to


contribute to this debate. May I also was the Minister are very happy


birthday. I'm sure there's nowhere else he would rather be this evening


than responding to this debate. I'm delighted to see the government


continue with its agenda for revolution with the introduction of


this bill. The measures in it will revolutionise the way finances are


raised and bring greater flexibility and accountability to local


government. The retention of business rates is something I know


that local councils have themselves been asking for for many years and


it's a very welcome step. The developments in this bill will


predictably be welcomed in Cornwall, not least because Cornwall will be


one of the pilot areas for the 100% retention of business rates and will


enable us to be an early adapter to this change and also contribute to


fine tuning the roll-out across the country. I believe this is another


sign of the government's recognition of the particular challenges and


identity of Cornwall following on from the devilish and deal for


Cornwall that was agreed in 2015. Members across the House will be


aware that Cornwall is a dramatic geography, we jut out 90 miles into


the Atlantic, our foundations are built on granite, surrounded by fish


bearing sees on three sides and the river Tamer almost gives us island


status. Our geography has contributed to our unique identity.


It presents many challenges. One neighbouring county of Devon and it


has caught an independent approach that our attitude in Cornwall. Our


lenders is rich in natural resources which only this past week have been


taken further with the announcement of large deposits of lithium that


have been confirmed and that extraction of this precious metal is


now eagerly expected. With the growing global demand for lithium


for the production of batteries, this stands to write another chapter


in Cornwall's long history of mining following on from tin, copper and


china clay. We hope to read a whole new generation. This change will


mean that the local authority. Hopefully it will mean that the


local authority will be very supportive of developing the


industry in the near future. Cornwall's cling to its own


independent identity and culture has been long established and its desire


for greater self-rule has been rekindled in recent times. These


days we Cornish do not march in anger on Westminster as we did in


1497 to protest at the imposition of yet another tax, that attempt didn't


end too well for the Cornish. We have learnt and we now preferred to


work more constructively with the Westminster government but the


desire for greater devilish and of powers remains as strong as ever. --


devolution. This is a key move to devolving more powers, an ideal


balance between giving the autonomy required to act and be accountable


locally without progressing into the unnecessary and expensive


bureaucracy of another level of government. I do not believe we need


another layer of government in Cornwall as some would like to see


but I do support and are working for greater powers to be given to the


existing bodies in Cornwall. The measures in this bill will take


another step towards Cornwall Council being more responsible and


more accountable for Cornwall's future. The current review of


business rates was long overdue. The delay had led to rates being out of


sync with the business community and the constantly changing landscape


that they face. It left areas that are struggling for whatever reason


further disadvantaged, putting additional unwelcome pressures on


them. When a high street is blighted with empty shop space the last thing


we need is more businesses pulling out because of higher rates. Leaving


more empty shops which can reduce the footfall and further


disadvantaged those left behind. With the new measures contained in


this bill, councils will be able to take a more flexible approach and


that has to be welcomed. Or being able to adapt the local business


rates to suit the needs of their communities and businesses. They can


work to attract new businesses where they are needed. This freedom for


local authorities that are coming in 2022 set business rates according to


local needs and situations will be a key advantage. It is the local


equivalent of Brexit. Taking back control for the good of the local


community instead of having a one size fits all scenario imposed by a


remote authority, which all too often doesn't actually fit anyone.


Alongside this, there are specific key changes in the bill, one of


which I would like to address enclosing. Over recent years I have


campaigned on the importance of public toilets. They are essential


in a tourist area such as Cornwall. I have to choose my words carefully


but a few years ago when I was the Cabinet member on Cornwall Council


responsible for public toilets, I spent many months to ring the 285


public conveniences of Cornwall. I spent far more hours than I would


like to admit to in some of those toilets. In recent years, Cornwall


Council has been seeking to hand over all of its public toilets to


town and parish councils and other community organisations. But one of


the biggest barriers to this is the cost of running the toilets. A very


large part of the cost is that they are liable for business rates. It


seems crazy to me that public toilets are liable for rates. There


are an essential public service, they do not make a profit, they are


not a business. Thankfully the government has recognised this. From


April 2018, local authorities will be able to use their discretionary


relief powers, release seems to be the appropriate term here, when it


comes to toilets, to remove business rates liabilities. This is something


that I, along with my Cornish colleagues raised with the former


Prime Minister David Cameron in 2015 when he visited Cornwall. We have


been pressing for this change since and I'm delighted to see that the


penny has dropped and the government are now addressing this issue. This


will enable councils across the country to drop them in the sea of a


council charging itself rates to provide something as basic as a


toilet, as well as reducing the cost of running toilets for parish


councils and other community organisations who may wish to take


on running them. Madam Deputy Speaker, I'm pleased to welcome and


support this bill. The measures it contains will be another significant


step in this government's vision and commitment to devolve appropriate


powers and responsibilities to local government.


It's a pleasure to follow the honourable member for Saint Austell


in Newquay, the members might be relieved to know that I'm not going


to speak this evening on the subject of public toilets. The principle of


business rates retention is one which I support, however the test of


this bill must be in the extent to which it delivers fairness across


the country. On that test, I have some concerns. First concern is


about the context of more than six years profound unfairness for local


government into which this bill is being introduced. Local government


has faced swingeing cuts from the coalition government first,


continued and intensified by this current government. The average cut


in spending power per household for deprived council areas will be more


than five times higher than that in more affluent local authority areas


for the period 2012-2020 and by the end of this Parliament the average


cut in more affluent coastal areas will be ?68 per household, while in


deprived areas it will be more than ?340 per household. It is one of the


profound injustices of the past six years that many council areas which


have the most need, the lowest average income, the highest levels


of deprivation have faced the harshest cuts. This government has


been weakening the link between need and funding. It is very


disappointing that we are debating this bill this evening in the


absence of the details of the fairer funding review so that we can apply


a test of fairness to the Bill and debated properly in a fully informed


manner. There is no necessary connection at all between rising


levels of need, for example for social care, and the ability to


raise additional revenue from business rates to economic growth.


In fact in many areas the reverse will be the case and it would be


precisely those areas which have the highest levels of need, which also


face the greatest challenges in terms of economic growth. My second


concern relates to the level of challenge currently faced by local


authorities as a consequence of the cuts they have experienced. The most


acute of the challenges is in social care where a million people across


the country who need care are not currently receiving any. Contracts


are being handed back to councils because providers can't make them


work and our NHS is feeling the pressure of a system which all too


often isn't providing people with the support that they need, so they


end up with an acute health crisis. There are pressures in many other


areas of local authority services too. Libraries and children centres


being closed, park service is being cut back and children services


struggling to keep our most vulnerable children safe. A system


which is already under such pressure needs reform which is guaranteed to


deliver additional resources to the areas that need it most and I'm


concerned about the risk in this bill without the details of a


redistribution mechanism. The final concern which I raised when the


committee discussed this issue is about the loss of a democratic link


between the source of funding and the services are predominately


funds. A very high proportion of Council's funds, 75% in some areas


are spent on services which protect our most vulnerable residents, yet


these are not the concern is typically uppermost in the minds of


most businesses. I am concerned that councils may find themselves in an


uncomfortable tension between footing and taxpaying residents and


businesses who will provide the majority of their revenue. I would


therefore welcome assurances from the Minister this evening that the


government will monitor this issue and ensure that the funding for key


social and community services is not eroded under pressure from a


different tax payers stakeholder group. This government's track


record on fairness for local government funding is appalling. I'm


calling on the government this evening to publish the process for


redistributing business rates to ensure that the new arrangements are


fair, to look in the short term at the crippling crisis facing social


care and other local authority services and redress the balance and


insure overtime that the services our most vulnerable residents rely


on are not placed at further risk. This reform should be introduced as


part of a package of fiscal devolution and reform for local


government funding, designed to embed fairness into the system to


please control firmly in the hands of local government who know their


community 's best. It's a pleasure to follow the member for Dulwich and


West Norwood. The only observation is like many other features we've


heard from the opposition benches. Review a list about local authority


funding and what happened in the last parliament between 2010 and


2015 but again I'm drawn back to the intervention I made on the shadow


minister earlier. The shadow chancellor, now struck


the Come Dancing star, was challenged about how much extra


would be putting in. The plans had been published and the answer was


nothing so I do think it interesting to hear some of what we've heard


again tonight. When I came to this debate, I came with high hopes


because having read clause nine I knew this would not be a


bog-standard second reading debate. Absolutely happy to give way on that


point. I have a copy of our manifesto from 2015, and makes clear


we will transfer ?30 billion of funding to the city and county


region so I hope the honourable gentleman will withdraw his remark.


I thank the Minister for intervention. He talks about


transferring funding. What about responsibilities? What was clear, in


January 2015, there was a direct challenge to the former member for


Morley, how much extra labour would be putting in. Answer? Nothing.


Whilst there was a transfer, there wasn't going to be anything extra


after five years of long complaints. Perhaps one of the reasons why


people didn't have much confidence the Labour Party had a real


programme for government and duly dealt them the electoral blow that


would surely follow. And I suspect will soon follow them again. But


let's go into the details of the bill. Overall, it is a welcome bill


that is coming forward. When I became the cabinet member for city


development in Coventry, at the time, I remember having constructive


dealings with the number the Coventry South. We were briefed on


the Birmingham dilemma. It was the idea that previously councillors in


Birmingham had chosen to spend money on regenerating the city but, of


course, to do that, they had to take money out of the services they were


responsible for. Whilst the regeneration designs created new


jobs, brought new business rates in, they took the blame for the cut in


services. They didn't get the reward won a significant amount of revenue


was generated for the national exchequer. That was the thing we


were briefed on, how can you balance the fact that if you want to restart


regeneration or push forward a project as a local councillor, you


didn't get any of the reward for doing that financially, you only got


the satirical award of being able to point to lower jobs figures...


Unemployment figures, or point out how the town centre was looking


better. The boss and the incentives, in terms of your day-to-day profit,


revenue budget. That's why it's welcome we've seen the change to


give local authorities more ability to retain the business rates growth


they receive. And remove that dilemma from local councils, like


the one I've described. It's particularly good we are moving to


100% of that growth retain. They will need to be mechanism to


scrutinise this bill in detail. If someone by luck has a piece of


National infrastructure dropped off in their district council area, that


might not always be a sign of taking very radical decisions for growth.


There is also a reason that likewise if they are getting that


infrastructure dropped off it's not unreasonable that it gets a direct


reward from the business rates concern. I will give way. It's not


always the case that the infrastructure is dropped in the


laps that the local authorities keep the business rates. Some residents


living around Hinkley Point will be glad to get the business rates from


that power station. It would be a dividend declared rather than a


council tax being set in some circumstances where large


development 's go-ahead in some areas but it is right we have a


system that does have a balance. And if we have something that happens


where it couldn't be affected by the decision of other local authorities,


such as a steel plant closing down, that is the other way around. Those


are the details of something to be got into. The theory of making sure


that local councils can take decisions, and then get a hard cash


reward for doing that, they can use that to benefit the residents who


have been prepared to support them and taking those dishes and is --


those decisions. We're not looking at things suggested in the past,


like tourist taxes, which would be counter-productive in areas like


Torbay. The last thing we want to do is to put additional costs for


people visiting and staying within the UK, and I'm pleased that those


ideas have not been anywhere near this Bill. Finally, there is an


issue with social care and we've had a lot of talk today about urban and


rural and there is a real issue of coastal. A lot of coastal


authorities, both within county areas and stand-alone unit trees,


can find themselves taking a hit at both end of the spectrum, 9% of


people our age Devon 95, presenting its own challenges, and at the other


end, higher average number of children in care and a high rate of


teenagers falling into pregnancy. That can create challenges were


coastal communities, regardless of whether they are unitary authorities


or part of a counter or two tier structure. We need more of a debate


about how we can reflect that in terms of funding opportunities. I


also think it is welcome we see the infrastructure being brought forward


particularly with the combined authorities. There is talk about why


it is instantly given to directly elected mayors. In many cases, the


local urban area that might actually see the direct development or is


this rate growth happen is dependent on infrastructure coming through


nearby rural areas. The biggest boost in terms of Torbay's


infrastructure, the South Devon Link Road, is 99% in Teignbridge district


Council's area but it has a huge benefit, clearly, for Torbay. Wood


development products like that in future be able to be dealt with via


these types of arrangements rather than waiting decades for someone at


a national level to make a decision? I do think this Bill overall is


welcome. We are at second reading states there will be time for more


detailed consideration at committee and when the bill returns to the


house at report stage. From my perspective and from my experience


in local government and seeing what's happened in Torbay, this is a


welcome Bill that sets a framework for debate about how we can deliver


a real incentive to local authorities to clear reward for


those communities that do innovate, do grow, without penalising any


other community. Thank you. It is a pleasure to


follow my honourable friend from Torbay who speaks with much


knowledge on this subject. Business rates retention clearly is a bill of


huge potential for our authorities. They can then focus their attention


on economic growth in their local areas to grow rates... Rates pace


and their incomes. This is an incentive around growth rather than


the whole redistribution of the current system, about how local


authorities are funded. The majority of the revenue into local


authorities will be baked in. We distributed, according to a former


that we don't know the detail of, and I'm heartened to understand and


hear from the Minister that their funding review is being taken


forward. As a technical working group, of course, that is now


charged with that responsibility. The principle has to be that they


should be fair funding formula wherever you live. It can't be based


upon a postcode lottery. The previous Secretary of State and the


current one have been very clear this is a key part these proposals.


On our select committee, which also reported into the business rates


retention policies, and the opportunities, and the select


committee report that is available and looks at the opportunities and


the concerns around that. Overall, we were very supportive the


principal of this Bill. We did recommend they should be an


independent body to look out the funding review, and whether the


Local Government Association should have good people there but if you


had someone truly independent to look back at where government is


today, it's important we take a fresh look at this. The initial


witness sessions with had so far we had about an hour and a half with


some experts in the House of Commons library trying to explain the system


to us and we were none the wiser after an hour and a half. It was a


complex system and I understand their 159 measures currently being


used and the complexity around those measures, how they combine, you'd


think with 159 measures the current system would be fair. Does it make


it currently the? The answer seems to be absolutely no. The current


system is not fair. I am grateful to Leicestershire County Council doing


some detailed work on this, available on their website, I


understand. They looked at the core spending power of authorities, which


is as many of you all know, because spending power is all the revenue


for local authorities, taking into account revenue support grant,


council tax, business rates, New Homes Bonus, everything. I looked at


this in great detail. Members opposite might say this is a


political pitch, the shires against the Mets, but their evidence was not


like that at all. There are many mets that are not getting a fair


deal either and many shire counties are not getting their fair deal. The


fairest deal seemed to be a lot of the London authorities. Nine out of


ten of the top highest spending power authorities are in London. Yet


nine out of the ten of the lowest council tax areas authorities are


also in London. If you look at London authorities, what's happened


over the last five years in terms of how council tax has changed, outside


London, a typical increase of about ?100 on a typical council tax bill.


Inside London over the last five years, a decrease in the average


council tax bill. Something not quite right here in terms of how


overall funding is being allocated in the current system. To put those


figures in context, spending per head of the tuck-mac authority, but


the higher spending power, which is a London authority, ?1170. Yet, in


my area, North Yorkshire, its ?770. York has ?615. Many other examples,


cookies, leaves, Wakefield, all getting a raw deal at the moment. Of


course, you might say that's because of certain other factors, this is


about a correlation in terms of deprivation or low income or in


terms of age demographic, but that isn't the case. You are often seen


areas with very low incomes and high income deprivation, such as Leeds or


Kirklees, getting very low spending amounts per head. In terms of age


profile, authorities that have got a very high proportion of people of a


more elderly population, such as East Riding or Dorset, getting a


very low amount of spending per head. So this just isn't working. In


1988, when the system was centralised and money we


distributed, around the different authorities, it was supposed to make


this system fair. It was supposed to make sure we have equal funding


services to these local authorities, based on need. That hasn't worked.


What we're left with today is a postcode lottery. Another example,


Hammersmith... I'm not trying to pick on London because there are


some local authorities in London, including the Minister of whose


birthday it is, but his local authority is not particularly well


funded either, so it isn't universally around London but the


pattern remains. To put this in context again, Hammersmith and


Fulham, for example, have not increased their council tax this


year, they are not applying the adult social care preset, they are


providing home care for free to their local residents, meals on


wheels, their price has been cut for meals on wheels in that area. Hardly


any of those facilities are available in my area. It is simply


not fair that people with the same not fair that people with the same


need in different parts of the country are getting different levels


of service. This impacts on other areas that we are able to provide in


terms of my local area, such as North Yorkshire. Libraries are


closing or being moved over to community libraries, bus services


are not subsidised, so, therefore, some of those services are no longer


operating. It has effects on Children's Services, and adult


social care, crucially. North Yorkshire, we have a demographic of


a more elderly population. With these situations it is not an


easy situation to resolve. Moving from one system to the other there


is a zero sum game issue if this is going to be made here today then


somebody is going to lose out. We've got to move away from a system that


is clearly unfair. I understand the system is like this because of


regression. Its past inaccuracies, passed on fairness that has been


built one on top of the other and very difficult to reverse those


changes. But we are in a system where there's more money coming into


the system, ?12.5 billion according to the Minister in his opening


remarks. Clearly there will be some extra services required from that


but this is also an opportunity at this time to make system fair, that


the money is allocated in a way. Yes more services, yes greater


responsibilities but areas that are getting a better deal today, we need


to make sure. I'm very grateful to my honourable friend forgiving way.


Would he agree that in order to ensure that the problems he sais


highlighted and not replicated in the new system, we have defied an


agreed insensible with of measuring rule deprivation, often incredibly


hard to do because of the scarcity as Bastia population. I was good to


move on to that point. What Leicestershire have suggested. Nine


simple factors, children services,, area cost, sparsity and density.


Very simple formula that people can understand and penetrate and then


allow for and make sure the extra responsibilities that we are getting


on the back of the system then also mean the allocations cater for those


responsibilities, so nine simple cost drivers instead of this


regression and model based on something that clearly doesn't work.


A progressive move away from that regression, a symbol standard


penetrable formula based on not where we live but a fair system with


their resources. A fair assessment of the cost drivers wherever we


live. Can I join others in wishing the


Minister a very happy birthday. The House has been very patient, I won't


hold it up for a very long because I'm sure she wants to enjoy his


birthday for a couple of hours. The House has been very accommodating as


well as being very patient. I think there's a lot of detail around this


bill that we are yet to hear, as we've heard from members on all


sides, particularly the honourable member for Southeast Sheffield and


my honourable friend from Christchurch and others. There's an


awful lot that we still don't really know but overall I think the bill is


immensely welcome. I'd like to draw a few points out. Firstly, there


will be a collective sigh of relief across Somerset rural areas about


clause seven is extension of rate relief which will go some way


towards putting rural areas or more of an equal footing to urban areas


although there are still so much to do in so many other areas in order


to achieve anything like that but this has been an inequality small


businesses in my constituency certainly have brought up with me


and I'm sure that happens across the country, so it's good that we are


addressing that. Knowing also that business rates appeals cost some


?2.5 billion over the last five years, like the local government


Association, I'm pleased to see the Bill's provision setting out how


government will pay local authorities for the cost of appeals,


is clearly got to make a difference. But there is a proviso to that but


it seems to me this really must be in place before the 100% retention


of business rates. 11 for dealing with Minister says or surely the


local authority will be liable or 100% of costs on appeals. I don't


fully understand that. No doubt we'll hear more and given that local


authorities will retain redistribution mechanism, allowing


to be topped up if they don't raise enough, I do think that on business


rates as a whole, this is extremely good news. Not just for local


authorities but for small business as well. In terms of wider funding


issues, altering the local government finance settlement so


that it becomes multi-year instead of yearly provides local authorities


with the opportunity to plan ahead, which will give them certainty and


clarity so they can look ahead like any other business organisation, as


we transition to this system where they are retaining 100% of local


taxes and again there more that perhaps we could learn about that. I


must talk about telecoms infrastructure. In rural Somerset


it's an enormous issue. Many small businesses, hamlets, isolated areas


are very much left behind by superfast broadband, of course. It


feels like the 10% of businesses that are yet to be connected are all


in my constituency. The tax break incentive for infrastructure


development is enormously welcome that I think existing infrastructure


also needs improvement. We have creaking half copper wires all over


the place so I do look forward to the other elements of the ?1 billion


connectivity investment that was announced by the Chancellor in the


Autumn Statement. I must say I also have some concerns more generally


about financial priority is given to areas planning to have a mere. The


devolution plan in Somerset is widely controversial and to have a


mere with existing plan of Somerset and Devon coming together seems to


me not to be the right way to proceed, so I'm not sure what that


would mean in terms of devolved areas and financial incentives.


There's work to be done there. Overall this bill is extremely


welcomed. Delivers on the commitment, on the government's


commitment to devolved budgets and powers to local government. It moves


local government away from dependency and towards


self-sufficiency. As Voltaire and Spiderman's uncle both said, with


great power comes great responsibility. So it's clear that


with responsibility, the responsibility this bill provides,


it strengthens both positions and indeed the powers of local


government. I'd like to welcomed the devolution


of business rates as proposed in today's bill. In that sense I


supported very enthusiastically. I've no doubt the retention of


business rates will encourage local councils to be entrepreneurial and


rejuvenate economic developments to departments in city and County


halls. In the long-term future I'm sure the new focus on local economic


development and the government's industrial strategy with us focus on


growth of all parts of the UK will deliver a self-sustaining local


authorities delivering high public services in all parts of the UK. But


we're not there yet. In fact, nowhere near. The funding per capita


to predominantly rural local authorities is significantly below


those in predominantly urban authority areas. Why? Because that's


just the way it's always been. There is no rhyme or reason to it, it


simply a legacy of old funding formulas and salt rural areas have


continued to be at a disadvantage. That's iniquitous and it needed to


be corrected. Instead, however, under the settlement announced, the


gap will widen further. Last year rural MPs on both sides of the House


one night a concession for extra money within the mural services


delivery grant that effectively ensured that last year getting cuts


were shared equally between urban rural areas. That was just a


sticking plaster that did not change the settlement for this year or the


two that follow. I remain ever hopeful that like last year, some


extra money could be found to provide some extra RS GD to ensure


the cuts fall freely and rule residents are not left acted as


advantage. But I'm clear that that would just be another sticking


plaster on what local authorities need more than anything is


certainty. Certainty to borrow, certainty to invest and certainty to


budget in the long terms of the local public services are on a more


stable footing. That means that the current review into local government


funding needs to be accelerated and it needs to be accelerated urgently.


And furthermore, we should be bold in our ambition for the skill of


that review. A full review of local government funding is needed that


fully recognises the costs of an ageing population and that all of


the other costs faced by local authorities around the country, not


just in role areas but Herbin, the cost of communities that are


predominantly having English as a second language, the cost to the


pockets of high deprivation in urban and rural areas. All of those costs


need to be understood and a new funding formula for local government


puts into place that is entirely transparent and entirely fair on all


of our constituents whether we represent rule or urban


constituencies. In Somerset, we are already paying extra on our council


tax to protect ourselves from flooding. We will pay extra on our


council tax for adult social care and our cost of living is rising


fast because fuel costs are going up and that impact rural areas far more


than it does urban. In return, Somerset residents are getting their


bins collected less often, the libraries are open lines, youth


clubs have lost their funding and bus routes are being lost. Somerset


County Council have done a great job running into this headwind, not


least because they do so whilst carrying the enormous debts left by


the Lib Dems when they were last in charge of County Hall. That ?20


million per year Lib Dem interest and debt repayment is a very useful


reminder of why Somerset is better off under Conservative control. We


should be clear, Madam Deputy Speaker, that the Alchemy of the


Conservative administration at County Hall in Taunton, just like in


County halls across the country cannot go on for ever. There has to


be a review that not only delivers the devolution of business rates but


in the short and medium term insurance that we continue to


redistribute money from London and the south-east out into the rest of


the UK so that local authorities in rural areas and in the regions of


the United Kingdom can be given a financial settlement that allows


them to continue to deliver high-quality local public services


but crucially with the certainty that is required that they can


borrow, plan and budget for the long-term. I agree with the


principle of this bill and agree absolutely with the devolution of


business rates to local authorities. I think the opportunity for local


authorities to be more entrepreneurial to invest in their


economic development departments and to reap that return by growing


number of businesses in their patches and pay rates that allows


them to do more by way of public services is a great idea. It's


clearly the long-term future but we should make no mistake. That system


will not work immediately on its introduction and saw what is needed


in the interim is a full review of local government funding so that our


county councils, our district councils and councils everywhere


else in the UK can operate with some certainty and we don't have to have


this year by year cut to local public services that annoys our


constituents and gives us such full mailbags.


My apologies for not being here at the start of this debate and I'm


grateful to you for allowing me to say a few words. I want cheaper


frontbenchers very long. This bill provides a framework for a major


change in the funding of local government. It for greater attention


retention of business in revenue by local authorities and that principle


is the right one. Money raised in an area should ideally remain there


rather than being circulated and perhaps last as it goes around the


country. People in businesses in an area are entitled to expect what is


their money to be spent on local services with spending decisions


made by local councillors with whom they can talk on a day-to-day basis.


It is right that we are moving away from a system when the man in


Whitehall thinks he knows best. This is an important move by the


government but as is often the case in such circumstances there are


potential pitfalls along the way. I wish to briefly outlined three of


these this evening and I do this in my capacity as an MP in accounting


and a coastal area and also as chairman of the all-party


Parliamentary group for counties. The first pitfall is what I call an


unintended consequence. As part of the devolution process, in order to


facilitate the new business rate retention process, various


responsibilities are being transferred from central to local


government so as to ensure fiscal neutrality.


There was a danger that in some circumstances there might be


unintended consequences of doing this and an example I've come across


is in the field of supported housing. Traditionally, developers


of supported housing have been able to rely on fact that their bankers


are prepared to fund much-needed new schemes in the relative comfort,


they can be underwritten by central government. It is now proposed this


should in future be a function of local government and there is, I


regret to say, from the feedback I get from many specialists supported


housing providers, they are very uneasy about whether this supported


housing will come forward. And I'd urge the government therefore the


practical steps need to be taken to address this concern and there may


be others if this aspect of the devolution process is to succeed. My


second concern relates to constraints. An underlying premise


behind the move to greater business rate retention is those authorities


who promote growth in their areas should be rewarded for it. This is


right but there is the other side of the coin that there are those


authorities that would like to promote economic growth in their


areas and they shouldn't be penalised if, for reasons outside


their control, they are unable to do so. For example, if much of a local


authority area is a National Park, then it will not be realistic to


promote a science park. Moreover, you can't buck the market. The


success of such business park developments rests on the adage of


location, location location. If you're not in the right location,


there is nothing you can do about it. You can't move your district,


you can't move your borough, you can't move your county. My third


principle concern focuses on the requirement for the needs -based


review of the funding to take place at the same time as they move


towards full business rate retention. I am aware that this is


the government's intention. There is a consultation which I believe is


due to start next month. It is absolutely vital we keep to this. If


we don't, county areas, like the constituency I represent, will be


placed in an even greater disadvantage than they are at


present. The current formula we have doesn't take proper account of the


demand pressures that county and, as my colleague the member for Torbay


said, coastal areas face. There's the adult social care time bomb


we've heard so much about. The obligation to maintain hundreds if


not thousands of local roads. The cost of delivering services in


sparsely published of rural areas. The current formula is opaque and


after years of tinkering is no longer fit for purpose as it is no


longer directly linked to need. This needs -based review must be


synchronised with the move towards greater business rate retention. It


must be joined at the hip. If it isn't, then a large section of the


population will be very unfairly penalised. In conclusion, I commend


the government for being bold, the their ambition, and that their


direction of travel. I thus support this bill. But I urge the government


to both remember the devil is in the detail, and to pursue the needs


-based review in a timely and fairway. Time really is the essence


in this issue. Thank you madam Speaker. Thank you, Madam Deputy


Speaker. Can I join many members on the government side in wishing my


counterpart a very happy birthday. I'm sure this doesn't constitute a


birthday bash, and I think for many it isn't the icing on the cake,


either, but we wait with bated breath for a committee stages to


really get under the skin of what this means and hopefully work


together because I think there is a shared desire here to make sure we


promote devolution, that we see a greater shift from power coming away


from this place down to our communities, and that we empower


local areas to determine for themselves what's right for their


areas. The devil, of course, will be in the detail. We welcome the move


for devolution and, of course, so will many of our counsellors, too.


Genuine devolution actually means power, not just limited decisions


made at local level but in a framework that is timely defined by


very centralising government at its heart, genuine freedoms, genuine


power, working with the community to co-produce what future they want


their areas. Now that is devolution. How and the ability to affect change


is what we all come into politics to do. None of us want to have it


predetermined by government hundreds of miles away, who don't know the


ins and outs of our community and to really don't know local


circumstances in the way we do. It's also important we develop a plan


that works for the whole of the country. I think for many people in


England they look at devolution in disgust in Scotland more Wales and


Ireland, and they say what about us? What about England? Even in England,


we are seeing towns and cities pitted against each other. I think


the challenge for the government is to let go as much as giving a little


away to local areas. And to do that with a meaningful way, the same


powers we are proposing from mayoral combined authorities, which should


give the same power to our counties and metropolitan areas, too. That is


real confidence and that is real letting go and if we can help


through the committee stages to put some amendments board that hopefully


will be received in a positive way, I'd hope we have a fair settlement


for England. Let's be honest. Some of this comes down to cash as well


as power. You can have ambition, a desire to make your area the best it


can be but you need funding to make it happen as well. You need capital


to invest in growth. I don't just mean deals done with government


providing you've got access to the government and if you haven't you


don't get the funding. I'm talking about revenue to make sure the


skills providers, the school system, the health system, the Department


for Work and Pensions all work together to see genuine reform and


growth. People will look at local government and say if you want to


see where real innovation has taken place, if you want to see where


modernisation has taken place and proven itself to be efficient, look


to local government. A lot of people in DWP and HMRC should look at


themselves in shame at the way they've allowed front line services


to be cut to the bone while they fail to reform from inside. I worry


that we still see a very narrow base being discussed when we talk about


fiscal devolution and local autonomy is. Let's be honest, we are still


talking about council services not been based on need and peoples


genuine need for that support and those services. Were still talking


about 1991. We haven't had the courage to bite the bullet and take


forward reevaluations. We haven't allowed local freedoms look at


redemptions and discounts and the devolution deals that have taken


place. And we are coming forward with a very narrow business rate


base. In many areas, the same places that have a low tax base properties


for residential properties have the same issue with their business rate


base. Low values, low demand have that effect. That is a real shame


that when we talk about fiscal devolution and autonomy, we are


taking the easy option, with going to property tax because it is easy.


We know how to collect it and generated, and it creates a pot of


money for local authorities to sink or swim from. That's OK if you're in


an area with a strong taxpayers. If you're not, the alternative to


swimming is to sink and that isn't good enough if we believe in a fair


and decent society. So you be seeing amendments coming forward that hold


to account the idea of funding based on need. It isn't good enough to set


one area against another. If there are particular instances in rural


areas that should be taken into account, a fair model should


accommodate for that. If areas have high levels of children that need


safeguarding support or people that need social care, a fair funding


formula should take that into account. But it shouldn't do is have


a constant imbalance where errors are fighting with each other to get


scarce resources to those public resources. I will give way. He makes


a very good point at looking at this from a blank canvas. Would he accept


the position that if new funding formula meant a local authority was


worse off based on that objective need he'd support that legislation


in that way? I think we've seen from both sides, actually, a real


concern, a deep concern, that any review will mean some areas will be


worse off than others. I've gone back to the point that I started,


which is inevitable when you're looking at narrow tax bases. When


you look at the council tax income and say that's it, and the


additional grants are now in question to local authorities, then


we will always be fighting the scarce resources. We know that


devolution deals have recorded requests for the tourism tax and not


every area wanted but if you believe in devolution, local areas should


have the ability to have some of that. We haven't even discussed fuel


duty retention. Or VAT being retained at local level. If you want


genuine fiscal devolution, we need to be more open to more taxes being


raised at local level and spent at a local level with local people being


held to account, the people making those decisions. The truth is it


isn't local government we need to change. It isn't even the government


DC OG team. It's the Treasury. It's the Treasury that need to let go.


The reason why passenger duty can't be devolved is Treasury has no idea


how much fuel duty is generated at any of our airports. Why? Because it


is paid by the airline at their head office. Treasury have no idea how is


generated by fuel duty because it isn't attributed to any petrol


station. It is paid at the refinery. They don't count how much is spent


at local level. He's making a powerful point that many of us tried


to make earlier in the debate. Would he agree with me that, on top of the


fact there is no redistributive mechanism involved in this, there's


also the problem that there hasn't been sufficient testing on what the


outcomes will be for us to be satisfied that this is a measure


that will actually work to the benefit of all local authorities?


That is an absolute fair point. It is a point not just raised by me,


but raised by your very credible think tank organisations, by the


LGA, and they had a financial review where they said we need to have a


broader review of the taxpayers to make sure local authorities have


that broad range of taxes to make sure they are resilient to future


changes and shocks. I think that is a very fair point. I will come back


to my point. It isn't good enough we said the councils need to reform. Of


course. For many, many years now we've debated local government on


and off. Doesn't he think we should have some kind of independent


inquiry to have a good look at local needs and how they should be


properly funded? I strongly believe, and I think many local governments


would believe this too, that local government finance and, actually,


the powers that are contained in local government, should have


constitutional protection from the interference of central government.


It can't be the whim of the Minister of the day or the Prime Minister to


be able to change the viability and sustainability of public services to


such a degree. We have this in progress with the four-year


settlement and I'm pleased the local authorities have put forward to that


but that was based on the projections of doom, based on local


authorities been told before that the efficiency plan was transmitted


that they had to live within their means but it took no account for


boundary. There was a gap. The gap hasn't been addressed with the


funding settlements that are now being brought through. Because with


the best will of the world, and the central government bites the bullet


and deals with the chronic underfunding of social care in this


funding, council tax payers will continue to bear the brunt. It is


absolutely wrong, in a civilised country, that your ability to


receive social care is based on how much a local authority got in 1991.


I met the chief executive of the University Hospital in Coventry a


couple of years ago. One of the big dilemmas as you have mentally ill


people turning up at the hospital looking for treatment when they


should be going elsewhere. There is a real difficulty in the Midlands of


looking after the carers in that situation. Would he not agree with


me something should be done about that? I do agree with that but the


point goes beyond adult social care and the acute sector. We've been


discussing Parliament the cuts to community pharmacies and the impact


that will have. For Greater Manchester, a lot of their healthier


together programme has been based on the preventative work on pharmacies.


In my own town, 16 community pharmacies face potential closure.


That's been held up as a place where there is health devolution. That's


because it is very tightly defined and government just will not let go.


I had the pleasure of working utterly fantastic not careful... I


shouldn't over state this because he's one of the mayoral candidates


for greater Manchester. He is very clear about what this means. This is


not fiscal devolution, it is a retention of rates that will be set


in Chile. We mean it then we should all lead to let go, trust our local


economy and trust local people to hobos councils to account.


Because of the cuts they're finding it so difficult to operate so they


have to emerge, but that impact on any future operations in local


authorities? My friend makes a very important point about the burning


platform that many local authorities have seen coming down the line and


we know there have been very short-term decisions made by local


authorities that we support Huth got this horrible task of trying to meet


the growing demand particularly for safeguarding of young and vulnerable


adults and children and also the growing demand for social care. The


principle of devolution has got to be having a national framework where


there's answer for devolution. Not picking areas one by one against


each other. Also, devolution with their funding at its heart and the


fundamental difference I think on this side than the government


benches about fair funding. There's one view that says fair funding is


that gets the same regardless of the need in the local community. What we


believe is that fair funding... Mr Speaker, I don't judge the benches


on the heckling, I judge them on the actions and the coalition years and


the financial services to show that councils are having their body


stripped away while demand is going through the roof. I want to make


progress because I'm conscious of the Minister's birthday. The


Minister has caked with candles waiting at home. And he's got a


great deal of unanswered questions to come back to this dispatch box


but it would be rude given my friend's position as chair committee


not to give way to him. I'm sorry some are disappointed on the other


benches opposite. There is a real issue here and it is that positions


in this post are always better and want to give more powers and more


control to local authorities and government are. It's happened over


the years. In looking at the future does he accept that we need to


develop a system for local government for local authorities


have more ability to raise money themselves and make their own


decisions and there has to be the question of equalisation and


recognising needs and we have to have an element of central funding


but it would be helpful if there was a right for a local government as a


whole to have a certain specified amount of income tax given to them.


So that they were in control of that rather than relying on each


government changing that system. Taking money away from them at a


whim. I think my friend really does put on show his experience in these


matters, very detailed assessment of the type of variable taxes that


local government need to be sustainable in the long term. We are


in the process of looking at local government finances longer term and


I put this plea that we look about broader than the traditional council


tax and business rate base, we are open minded to having more varied


range of taxes that local authorities could take and in doing


that that we allow local areas to be held to account, to work together to


make sure the right distribution method is in place to make sure


funding is genuinely based on need. I need to make progress because the


Minister has already given notice that there are a number of very


detailed points that have been made that he does want to address and I


think it's fair that we give him that ability to do that and not all


of us will have the pleasure of sitting on the bill committee going


through this in great detail, I'm sure you're sad to hear. As much as


we know that incentives are important, they are. So too is


certainty. Yes, share the benefits of growth for growth can happen and


for local authorities can demonstrate they have role in that.


But it's really important to make sure that you're not allowed to sink


for whatever reason. We had some examples where that could be


completely outside of the local authority's control. A very large


employer deciding to relocate somewhere else in the world, it


would be wrong or the local taxpayer to feel the brunt of that with the


public services they receive. That safety net is absolutely critical.


So too is the detail that we look forward to seeing on the tariff and


top ups for that. My friend, the member for Dulwich and West Norwood


really raised the issue about how important it was, not just do have


the tariff and top ups in place, but to make sure that the redistribution


method was transparent and fairness was really at the heart of that.


When we talk about certainty and when we talk of the future of local


government, we need to bear in mind that we are not talking about these


institutions. Councils don't exist for council's sake they exist


because they provide public services for need and demand. We really


missed a trick if we don't put at the front of our nine the real


impacts that the cuts have had through austerity local communities


but also allow them to benefit generally from growth and from


devolution. We have seen and my friend the member for Knowsley was


very clear on the true impact of this in terms of the impact on his


local community where nearly ?100 million of cuts to that local


cancel's budget. Let's be honest, there's no way you can take that


amount of money out of the system and expect there will be no impact


on the local area. We had the same from the member from Manchester who


was very clear about Manchester, which is held up as being an


excellent authority, at the forefront of devolution in leading


the greater Manchester deals, has had to make some terrible decisions


just a balance the everyday revenue book and that just can't be right.


Looking down the line we've got a very serious problem coming our way.


A ?2.7 billion black call on adult social care. We know if we don't


deal with that it's not like we have 2.6 billion pounds more to spend or


to save giveaway tax breaks for other people -- black hole. It will


only have an impact on pushing demand elsewhere on the system.


We've seen it with delayed discharge, we've seen it with queues


going to accident and emergency and can be prevented, only prevented if


we provide the money upfront to keep people in their homes longer, to


have far more money in preventative services and to make sure we're not


spending money unnecessarily, not because people don't need that


service but because they get a better service and and being well


longer at home and naturally important. We talk about the people


who already receive social care not getting the support they need but we


also know according to age concern, there are a million people in this


country who would have been entitled to social care in 2010 who are no


longer in receipt of that social care. That somebody had an mum, dad,


grandparent. I would hope that when I get to that stage, having to think


about my own father and mother needing that type of care that we


really get a grip of where the system is but as mindful I am of


that, I'm also mindful that as a parliament we have a responsibility


for the million people who need it. They've worked all their lives, made


that contribution and Wendy really need it it's right that the


government really stand up for them. If it's bad in old man greater


Manchester, let's look at Surrey. The Conservative leader of Surrey, I


know David Hodge, we work together on the LGA, he's not a grandstand or


make petty points, he is raising a very real issue about the lack of


funding in social care. If Surrey has two raised their council tax by


50% to keep their head above water, just look at the authorities that


have their budgets cut even more than Surrey. Terrible situation. I


leave it on this point and allow the Minister to come back. Work with us.


Our front bench absolutely believe in devolution and sending power from


this place down to our communities. There will be positive amendments to


come forward as well as proven amendments but for government it's


not enough simply to let go a little, government really need to


learn to let go. Thank you very much Mr Speaker. As


has been mentioned by several honourable members, today is my 45th


birthday. There's not a cause for celebration on my part, but what


better way Mr Speaker to numb the pain than a debate on local


government finance. For nearly 24 years of my 45 years I've been


interested in housing and local government policy and in all of that


time there has been a very strong call from local government to move


away from dependence upon central government grants. The chair of the


select committee justified saying this was a revolutionary measure. A


big step change in terms of reducing the reliance of local government in


this country on central government. Will absorb solve other problems? No


of course one. There will be arguments of the overall level about


resourcing and distribution between local authorities but I would remind


all members of the host to read the briefing we've had from the local


government Association which says the central the central measure in


this bill is something that has long been called for by local councils.


The honourable member for Harrow where speaking on behalf of the


opposition suffered a bit uneasy about the Labour government's record


in office but it was a very good nonetheless to hear that the


opposition front bench support the measures in this bill in principle


and he was right to say that the legislation before the House is part


of wider package and that wider package is very important in


considering the legislation in terms of what's going to be devolved to


achieve fiscal neutrality, something the government is consulting on at


the moment was that the distribution of the funding in terms of making


sure we have a fair settlement for all local authorities. Then also the


issue of a safety net if any authority faced a sudden decline in


the income that it has and I would just make three points in that


regard. The November four Manchester Withington by Dodig is present at


the moment, he asked us to forgive his scepticism and they're certainly


do forgive him. I think scepticism in these matters from all


governments over the years is probably justified. You can't


legislate for fairer funding. The relative need for different parts of


the country are going to change over time, the select committee chairman


made that point in his bid. It's not something we can legislate for, it's


something the government is determined to get right under the


moment we have two approaches in terms of taking forward the detail


and making sure we address the concerns that members on both sides


of the House express partly to pilot these arrangements. Honourable


members are piloting these reforms. We have an important steering group


with the local government Association working with local


government to get the details right. Whilst the pilots are welcome, I did


make the point when I spoke earlier that the the Liverpool city region


have had no consultation whatsoever with the government about how they


want to proceed with it. Doesn't he think before we get to the committee


stage of the bill he could do with a bit more detail so we judged just


what the likely outcomes are going to be. The Secretary of State said


he disgusted with leaders within the city region and my officials said


there had been detailed discussions, is certainly true that not all of


the points are dealt with but I'll happily write to the honourable


member and try to provide with some reassurance. To deal with some of


the points that colleagues made, my honourable friend for Christchurch


talked about local government reorganisation in Dorset on what the


situation might be full to buy conceded that it would be possible


to set one level of council tax from day one but in previous


reorganisations, a period of time has been allowed for council tax


rates equalise. He also asked about the pooling arrangements. Our


intention would be to consult with local government about those


arrangements but the reason for the change is that the current


arrangements have letters on local authorities being left out of what


would have been logical arrangements and we shouldn't allow that to


continue. Deals on the point that we are looking to implement these


reforms in the last year of the four near settlement, that's true and


something we made clear at the outset when set out the four year


settlement. The chair of the select committee. He said he would like to


see not just authorities be given the freedom to reduce the multiplier


but to increase it. Certainly that would be easy way to raise more


income but on the side of the House we believe we can lose more income


is to grow your local economy and that's what we try to provide.


He made the crucial point that if resetting was done too often the


intent of the growth disappears but if it isn't done regularly enough,


there's a danger of falling behind. I can confirm to him we would also


be looking to adjust the needs baseline each time, that is the


crucial part of these reforms. And we will potentially have to look at


the mix of measures devolved to make the package fiscally neutral because


the demand for services may grow quicker than the income from the


taxpayer so each time there's issues will have to be looked at. My


honourable friend spoke powerfully about the unique constituency he


represents for which he is such a powerful advocate in this house. And


the huge potential for income and the real challenges those


authorities face and he made some powerful points. My honourable


friend for Northampton South made a very good point about making sure


there was still incentives in relation to small business from


which they might not get a business rate income. I would say to him that


of course the hope of this government and his authority is that


small businesses will grow to become medium-sized and large us in the


long-term that incentive is still there. My honourable friend for


South Dorset made a very important point about the appeal system for


business rates. There is a real issue at the moment local government


bears a significant part in risk to appeals and one of the reforms


welcomed by Local Government Association is to deal with that


issue so that the risk doesn't sit with the local authorities. If we


have 100% retention, that's risk will be increased. My honourable


friend for Cannock Chase raise the particular issue of the safety net


and she referred to a local example in her constituency she's raised a


number of times with ministers. I can tell her that at the moment with


the 50% system there is a safety net at 92.5% of the assumed income. As


part of developing these reforms, the government will need to give


thought to what the arrangement should be with 100% retention but


she's right to flag up the importance of protecting authorities


that face a sudden large loss in their income. I will give way. I'm


very grateful. Given it is the intention to phase out coal fired


power stations between now and 2025, what will the government do to work


with those local authorities who will be facing closures between now


and over the coming years? I think there are two issues. Both making


sure the arrangements we have cater for those circumstances where there


is a significant loss from one financial year to the next in terms


of the business rate income. But also advance warning of these


decisions so local authorities have time to prepare appropriately and


perhaps you may wish to have discussions with my honourable


friend about the detail of that as the proposals go forward. I will


give way one more time. I thank the honourable gentleman forgiving way.


A few moments ago we mentioned we want to grow local economies through


these measures. One of these problems is the local economy


expanding and housing. We can't rely on the private sector so why don't


you take the shackles of councils and allow them to borrow to build


council houses to take the pressure off mortgages? Mr Speaker, this is


my pet subject. If his argument is we need to build more homes in this


country, I absolutely agree with him, so does the Secretary of State.


There will be a White Paper coming forward shortly which will have a


whole package of measures to try and encourage all sectors to build more


homes but I would point him to the announcement the Chancellor made in


the Autumn Statement with a further ?1.4 billion to build affordable


housing in this country so I think the Secretary of State will agree we


have considerable commitment of this. Rate relief for public


toilets. There was quite a lot of toilet humour during this debate!


Because I'm not for my birthday, my children are watching and I will


keep it clean but I would simply observe to the honourable lady, she


asked the question that of public toilets have been closed, would this


relief apply, are they liable? They may still be rateable so in that


sense there is the potential for a charge but unoccupied with a


rateable value -- value below ?2000 may fall below that threshold. If


they were above that, the powers in this legislation would be applicable


so I think that's gives her the detail she was looking for. My


honourable friend the Torbay spoke powerfully, I thought, about the


pressures faced in coastal communities, and made a plea that


has we look at the fair funding review, we look at the particular


pressures facing this particular communities, and I know there will


be other honourable members in this house will share his concern and I


think he made his points very forcefully. My honourable friend for


Thirsk and Malton I thought spoke incredibly powerfully and showed a


real understanding of the detail of local government finance. I heard it


said that when Einstein published as general theory of relativity, for a


number of years, there are only two or three people that understood


General relativity and I think the local government finance system is


similar to in that regard. I think my honourable friend is one of them.


He talked about regression, the formula we use is based are not


purely on a sort of attempt to assess need but also takes past


patterns of spending as a proxy for what is needed. The political


decisions of different authorities have some impact on that and I think


he was arguing to move away from that and that is absolutely


something we can look at as part of this review. My honourable friend


for Somerton and Frome spoke very powerfully about the importance of


the measures in relation to rule or rate relief. He's a great champion


of rural communities and we are pleased to include these measures


which ensure that rural small businesses get the same treatment as


small businesses in other parts of the country. My honourable friend,


the member for Wells, spoke powerfully not just for his own


constituents, but also for rural communities across the country in


trying to ensure they get a fair deal out of the fair funding review.


This is an issue the house looked at last year. It is an issue my


honourable friend and the Secretary of State feel very strongly about,


but we need to get the detail right to make sure the former takes


account of the real needs that all communities, whether we are talking


inner-city areas, suburban areas, like the one I represent or rural


communities get a fair deal out of the system. The final backbench


speech in the debate was from my honourable friend for Waverley. He


made a number of points but I think one that bears repeating is the


importance of implementing the fair funding review at the same time as


we extend business rate retention to 100%. Because, clearly, it is


absolutely essential in those circumstances that we get the


distribution of the income local government as a whole is racing


through that tax in an equitable way so I thought it was an important


point he made. The honourable member for Oldham West Witton who wound up


the debate for the opposition made two points I think it is worth


picking up on. He spoke quite rightly about the dangers of making


sure the system prevented certain communities from sinking,


communities that were not able to raise additional funding for growth


for whatever reason, and could find themselves deprived of income. That


could become a self replicating cycle. He was quite right to raise


the issue. I can say to him the government wants to address it in a


number of ways. Firstly, we need to get the system right in terms of


local government funding. It won't have escaped the house that we had


an industrial strategy from the government that is determined all


parts of our country benefit from the economic growth we are


delivering and it is worth looking at the record of the Labour


government that failed to do that. We don't intend to repeat that


mistake. I wanted to end by picking up on one final point he made in


relation to local government finance. Let me make it clear to him


that nobody on this side of the house thinks that every single


community in the country should have the same level of funding per head.


We absolutely recognise funding should be based on need. His own


local authority gets the spending power per dwelling of just under


?1900. The Prime minister's community, that figure is just over


?1300. His constituents are getting a spending power 50% more to reflect


the fact there are extra needs in his community. I wanted to make that


absolutely clear that we are committed to a fair system that


reflects need. Just to conclude my remarks, it's probably worth putting


on the record some of the other things this bill does that haven't


had the same attention in the debate today. The pooling arrangements and


the possibility for groups of local authorities to replicate enterprise


zone policy is a really important measure. There's also been some


mention of the powers that are in the legislation for the Greater


London authority and four mayoral combined authorities to levy a 2%


supplement on business rates if they've consulted business to fund


new infrastructure. This is tempting me into my role as Minister for


Housing and planning but the Secretary of State and I are


convinced that if we want to get economic growth in this country and


if we want to see the housing built getting the infrastructure in place


is critical to that. We will experience the resistance to


building new housing in our communities, driven by a perception


that, over the years, new housing has not been accompanied by the


necessary infrastructure, therefore people have find it harder to get an


appointment with a GP, harder to get their children into the schools, the


trains are more overcrowded, the roads are more congested. It's vital


government tackles this problem, that we make sure we get


infrastructure in place that isn't just going to fuel economic growth


but is also going to help us to deliver the housing we so


desperately need. I am very happy to give way. I appreciate the


explanation the minister has given. When we first heard of


infrastructure, can he confirmed it will be wider than roads and


railways? Will there be a provision of superfast broadband? Absolutely,


we want this definition to look widely at all of the different


things that can help to drive economic growth. If you look at the


industrial strategy paper published today, getting the right digital


infrastructure is a key part of trying to ensure we get a


broad-based economic growth we need in this country. That is an issue we


shouldn't just be aiming to have the best connections just in core urban


areas, we want right across the country so that all communities can


benefit from that technology. I will give way one more time. Clearly, the


challenge in making sure that once business rates have been retained,


we need to grow the tax base locally. Does the Minister agree


with me that growth deals that aggressively target those areas


where the business rate base is smallest might be a good thing to do


for the next few years? I know the Secretary of State is really keen to


work with communities across the country to get these growth deals in


place. We absolutely recognise if we want to drive economic growth in our


country, the role of local communities, councils and businesses


are absolutely critical. And the government giving additional


freedoms to help make that work possible can play a huge role. One


other measure that has not been touched on is the provision in the


bill to change the inflation indicator in relation to business


rates from RPI to CPI and as the association of convenience stores


says this will lower annual rates and businesses. It is a reduction in


business rates that are businesses will experience. In conclusion,


local government is a crucial part of our democracy in this country.


Many members of this house, a number of them including myself have spoken


in the debate today but right up to the Prime Minister have served as


councillors before they came into this house to serve as members of


Parliament. All of us know just how important the work of councillors is


to our local communities that we have the privilege to represent. The


too long, councils have been forced to rely on us in Westminster.


They've lacked the incentives required to drive growth and


investment in communities. Those communities have suffered as a


result. This bill presents a historic opportunity to change that


forever. A global Britain can only be built on a strong, local


foundation. This bill will help provide that I commend it to house.


Order. The question is that the bill be now read a second time? As many


as are of the opinion, say "aye". To the contrary, "no". I think the ayes


have it. Programme motion to be moved formally. Question is as on


the opinion, say "aye". To the the opinion, say "aye". To the


contrary, "no". The ayes have it. The money resolution to be moved


formally. The question is as on the order paper. As many as are of the


opinion, say "aye". To the contrary, "no". I think the ayes have it. The


ways and means resolution to be moved formally. The question is as


on the order paper. As many as are of the opinion, say "aye". To the


contrary, "no". I think the ayes have it. We must


now take the motion relating to different divisions. The motion


relating to different divisions. I think the ayes habit. We now come to


the motion number five on carry-over to be moved formally. I beg to move.


The question as on the order paper. I think the ayes have it. Motion on


police. The question is on the order paper,. I think the ayes have it.


Motion number seven on financial services. The question as is on the


order paper. The decision is deferred until


Wednesday. Motion number eight on business of the House from the 24th


of January. The question as on the order paper. Ayes Have it. Motion


number nine on the Scottish affairs committee. Mr Whitton has begged to


move. The question is as on the order paper. I think the ayes have


it. The woman and qualities committee. The question is as on the


order paper. I think the ayes habit. The adjournment. I beg to move this


has two now adjourned. The question is now that this has do now


adjourned. I've already had four honourable members say they back to


intervene on me in the speech, so if others can bear with me I think that


probably will be as much as we can contain within the time. Children


have their first mobile phones when they are nine. Many have


smartphones, unlimited and sometimes unfettered access to the World Wide


Web and everything it has do offer. We should perhaps not be surprised


that by the time they leave primary school most children have seen


online pornography, one in five had to deal with cyber bullying and by


the time they finish secondary school, six in ten had been asked


for a digital nude or sexually explicit image of themselves usually


by a friend post as a result many would have discovered that private


images of themselves can be passed onto thousands of people at the


touch of a button. Removing these images from the World Wide Web is


all but impossible, reading difficult conversations with family,


future employers and friends. In that women and equalities select


committee report on sexual harassment we took evidence from


children themselves who Seth sexual harassment has become a normal part


of everyday life, calling which women names.


Over the last three years, 5500 sexual offences were recorded in UK


schools, including 600 rapes. Abusive behaviour from the off-line


world seeping into the online world. The facts look pretty stark. Perhaps


honourable members are lesser price to hear the latest Barnard 's


research findings that seven in ten children believe they would be safer


if they had age-appropriate classes on sex and relationship education in


school. More than nine in ten specifically said it was important


for them to understand the dangers of being online, especially sharing


images. I understand and share her concern about there being improved


relationships education in school, particularly for younger children


but I'm extremely concerned and would you not agree that many


parents would be to send it sex education is to be taught as a


compulsory nature to primary school children. I think my honourable


friend is right to say that parents need to have a voice in all of this.


I'm sure any consultation the government would have would take


that into account. To date information on research released by


UK International says eight in ten adults in this country want to have


sex and relationship education for children at school but I think the


honourable lady is right to say that it has to be age-appropriate and


that actually in primary schools, for the most part, what we're


talking about is making sure they understand what a good unhealthy


relationship looks like. I give way to the honourable gentleman. I


congratulate the honourable lady in bringing this matter forward.


Further to the point of the honourable lady, it's critical and I


believe crucial and I said that to the honourable lady that parents


have control and oversight of what happens in relation to their


children. When it comes to any influence that they may have from


outside. With the honourable lady feel that parents first and the


government must consider that when it comes to any changes with sex


education? The honourable gentleman is right, parents have a pivotal


role to play but so do schools and I was just about to come onto that in


my comments on remarks. I'm now going to be breaking my rules by


allowing my honourable friend to intervene me. Many of us didn't get


much from our parents and many others did not as not to children


but the only truth is that celibacy is the only thing you can't inherit


from your parents and many parents are too embarrassed to talk about


these things do their children. They wouldn't be a good idiot parents and


teachers discussed what children ought to know and discuss whether


parents or teachers or both should talk to them about it. Pearls of


wisdom from my honourable friend. -- it wouldn't for parents and teachers


to discuss what children ought to know. The Minister, I'm sure,


because I know her well, we'll remind us that some of the best


schools already teach children about mutual respect, self-respect, about


what makes a truly loving relationship, to go beyond what is


currently compulsory, which is the mechanics of sex, the biology of


reproduction and tackle relationships and the context of a


sexualised online world because we need to help young people make


better and informed choices in those early years. It's clear surely to


both me and how that many schools do not take this approach and why


should we sit by and allow those children to lose out? As I said, new


research today published today shows an ex eight in ten adults think that


compulsory sex and relationship education should be taught in all


schools's status. Many children to make informed choices, Winnie


children to understand that sexting is illegal and could affect their


mental health. They could limit their future careers. Pornography


doesn't reflect reality. Bullying behaviour online is just as


unacceptable as bullying behaviour off-line. I think it might be more


accurate to call it relationship and sex education because what children


need more than ever this to understand what a healthy


relationship really looks like. What they see and experience online is


for the most part not that. My right honourable friend is making


excellent points about sexting and unwanted touching but does my right


honourable friend agree that nowadays, the insidious nature of


early emotional abuse is vital for every child in school to understand


those early signs. My honourable friend who I know has a great deal


of expertise in this area is absolutely right. It's important


that we give children the right information at the right time and I


think that is what I'm calling for in the contribution I making today.


Many reputable operators on the Internet and mobile communications


world understand the downsides of their products, especially for


children and increasingly try to fit parental controls to sort that out


but at the moment there are only as good as we parents are and about 40%


use those controls. Parents are conscious of the problems but when


children use the Internet on average more than 20 hours per week they


cannot be there looking over their children's shoulder at every single


moment. Many simply fuel out of their depth as well. I do think we


have reasons for optimism and in a recent children in social work


debate, ministers have clearly been indicating that thinking is underway


and the government has already acted to show that it can work with the


online industry as well and we really all should applaud the work


of David Cameron and what he did in outlying child abuse images online.


He showed the Internet industry can act when it wants to. We can welcome


also the work that's now being done by the government to put effect age


restrictions in place for online pornography websites. I give way to


the honourable lady from Brighton. I congratulate her for securing the


debate and the excellent work committee has done on this area.


Which agree that it significant there is such cross-party support


for moving this direction, five jurors of select committees said he


think it's an important issue and we should agree that the statutory


nature is essential because it means you get good quality education. We


need that teacher training done well so that it's good quality teaching.


Villa the honourable lady has made an incredibly important point. What


we need to have is consistency and as I pointed out before in the


debate today, we don't have that at the moment and that's what the


statutory nature would give us. The Internet has changed everyone's


lives. For some its normalised sexualised behaviour which children


can find difficult to to. I see the research as a cry for help. Parents


have to take overall responsibility but schools have a pivotal role to


play to help more children understand what a good relationship


is to be able to make better decisions. I'm very grateful and


cheesemaking good points. Can I ask you to clarify, when we talk about


schools, we're talking about both local authority schools and also the


growing sector of academies as well, very important to make sure that


those would be included. I'm sure one of the many challenges the


ministers will have in this area as how to make sure that every child


can have the right sort of support in teaching and I don't


underestimate the challenges that will present. I agree with the


essence of what my honourable friend as saying. We can't pretend that


what we're talking about today doesn't affect children or parents


have all the specialist knowledge children need or that we can do


something different and act. Act to clean up the Internet but also act


to support parents, acted to give children the understanding they need


to make informed choices. Today's to be disappointed by leading


charities, the one sex and relationship education to be


compulsory. At the moment schools are relying on guidance that was


agreed more than a decade ago when the Internet was still out of reach


of most children. They failed to be able to adapt to what children need


and little wonder that Ofsted recently judged 40% of schools


inadequate in their teaching in this area. Who are we to ignore children


calling for change? Children only have one chance of a childhood. We


know the damage done by cyber bullying, sexting and the underage


viewing of extreme pornography. We have an obligation to act. My


question for the Minister, my friend from Hampshire, tonight as she


enters this debate, is how will the government respond to seven in ten


children who want to see change. What are the government actually


doing and when will we see that change happen?


I would let us die by congratulating my right honourable and indeed my


real friend, the Minister, the member of Parliament for Basingstoke


for securing this really important debate. I share her views about the


importance that children and young people should have access to


effective factually accurate age-appropriate sex and relationship


education. This is a subject the government takes very seriously and


we have welcomed the extremely helpful input from many members


across the House, not least for on women and equality select committee


and the ongoing scrutiny of the children and social work well. The


government is very committed to exploring all the options to improve


delivery of sex and relationship education and personal social and


health education. And to ensure we address both the quality of delivery


and the accessibility. To support all children developing positive


healthy relationships and being able to thrive in modern Britain. The


government welcomed the very core brands of report by the woman and


equality select committee on sexual violence and sexual harassment in


schools which was published in September of last year.


There are a number of recommendations. I was honoured to


take part in an evidence session for that inquiry, and I would emphasise


that we are in full agreement that sexual harassment and sexual


violence in schools, no matter what form it takes, is absolutely up


aren't and unacceptable and shouldn't be tolerated. Thank you


very much. I'm grateful to the Minister. Does she agree with me


that this whole debate is intrinsically linked with PHC E, and


equipping children to deal with things because they have the


capacity to understand what they're dealing with? My honourable friend


is absolutely right. We want to equip people to face the challenges


of the modern world in which they find themselves and we have given a


great deal thinking into the recommendations. And we committed to


work with stakeholders to produce a framework setting out the whole


practices. While combating harassment of any kind. Despite the


usefulness of those important evidence sessions, we recognise the


scale and scope of this problem is still not yet fully understood. To


improve both our understanding and that of schools we've made a


commitment to build our evidence -based and a Work Programme which is


currently being developed by the government equalities office. This


sits alongside a commitment to provide the very best practice


examples of effective ways of working with girls and boys to


better promote gender equality and better respond to incidents of


sexual harassment and violence. Additionally, we've put in place


plans to set up an advisory group which will be looking at how these


issues and recommendations from the select committee's report can best


be reflected within the DFE guidance. I know there is more we


need to do. The Secretary of State has made it absolutely clear we need


to be prioritising progress on the quality and availability of SRE and


pH is C, and we must look at the excellent work that many schools


already do as the basis for any new support and requirements. I think


there is general agreement across the house this is the right thing to


do. There is also a recognition across the house that with Brexit


coming down the track, our capacity to pass legislation to make sure


that every school does this is very limited. New clause one of the


children in social work bill will require every school, both


maintained an academy, to provide age-appropriate inclusive


relationship education, the very education we want to see happen.


Given that under time constraints, will the Minister tonight to make a


commitment to back new clause one or come back with something that is


exactly that because we've got no time left to make sure we make good


on those promises to those children? My honourable friend has been very


clear we will set out plans to move forward as part of that bill. So,


the existing legislation requires that sex education be compulsory in


all maintained secondary schools. At free schools are also required by


their funding agreement to teach a broad and balanced curriculum and we


encourage them to teach sexual and relationship education within that.


Many schools choose to cover issues of sexual doctor-mac within a sorry.


I will thank the Minister forgiving way. On the point the Terrence


Higgins trust report found that 75% of young people hadn't learnt about


consent, and that 95% had not been told anything about LGB T1


relationship is and even the UN is calling for a sorry to be statutory


in UK schools, does the Minister agree it is time now the government


response to this request and make it statutory? Yes, Mr Speaker, we have


agreed we are looking at it as we speak and we will set out our next


plans for inclusion in the children in social work bill but this has to


be done right, sensitively, carefully, and with cross-party


support. This hasn't been updated for the last 16 years. And,


actually, my personal opinion is that respect for yourself, and


others, healthy relationships, consent and all the other things we


value as part of SRE and PSHE are things we need to embody in a whole


school ethos, not just something we teach on a Tuesday afternoon. The


existing legislation also shows that Ofsted publishes case studies on its


website which highlight effective practice in schools including


examples of SRE has taught within PSHE. I'm grateful and thank the


Minister forgiving way. I echo the point to make that the time is now.


We've been discussing this since 2010, ever since the it didn't come


forward last time. Can she confirm, the report stage of the bill of the


children in social Care Bill will be with us at the start of February but


will the government bring forward its own legislation or supporting


clause one to make sure we have stacked Richard free SRE in every


single school in our country? -- statutory SRE? We are considering


all the options and are committed in supporting the bill and my


honourable friend the children's minister will bring this forward as


part of this. The key thing to this is getting it right, not rushing it


through just to satisfy a loud voices on either side of the house.


Just to translate what my honourable friend was saying, she was talking


about compulsory, I'd put it is comprehensive. Does the government


have any idea of how many young people growing up miss out on


effective sex and relationship education? Can we be assured the


government will try to make sure this number will be reduced to the


extent where it is virtually zero within a few years? Sex and


relationship education, in the form of the biology of it, isn't


compulsory but what we want to see is a much broader look at healthy


relationships, respect for oneself, issues around consent, and we have


to look at these things carefully as we move forward on theirs. That's


why we're encouraging schools to use the Ofsted case studies as a


resource while they are tailoring very programmes to meet the specific


needs of their pupils and, in addition, the PSHE association and


the sex education Forum in 2014 produced a supplementary guidance


document on sex education for the 21st century which provides valuable


advice on what sadly am all to modern issues, such as online


pornography, sexting and staying safe online. These really useful


guidance is provide teachers with the tools to support pupils with


these challenging matters, developing their resilience and


their ability to manage risk. As we have heard today, social media and


interactive services are hugely popular for children and young


people. They can provide fantastic opportunities for them to express


creativity, for them to learn digital skills and the them to


improve educational attainment but I call forms of communication, they


come with a level of risk. We expect on my industries to ensure they have


online safeguards in place, including restricted access to young


people. We have published a guide for parents and carers of children


using social media, including practical tips about the use of


safety improver see features on apps and platforms as well as


conversation prompts to help families begin talking to their kids


about online safety. We funded the UK's safe Internet Centre to develop


new resources for schools, including cyber bullying guidance which helps


them understand, prevent and respond to this issue. As well as an online


safety toolkit to help schools deliver sessions through PSHE about


cyber bullying, peer pressure and sexting. We're also talking directly


to young people about healthy relationships. The government


equalities office jointly funded ?3.85 million campaign with the Home


Office to launch the second phase of the This Is Abuse campaign. It ran


from February to May. It encourages young people to rethink their


understanding of abuse within relationships including issues like


sexting. It also addresses all forms of relationship abuse including


coercive and controlling behaviour. And situations including same-sex


relationships. Some of the materials contained gender neutral messaging,


others depicted male victims of female perpetrators and this was


targeted at 12-18 -year-old boys and girls and had the aim of preventing


them from becoming the perpetrators and victims of abuse within


relationships. So we are actively considering the clause to update


SRE, issued in 2000. The feedback we've received indicates the


guidance is clear young people should be learning what a healthy


relationship looks like. However, we don't consider it will be static and


we want to make updates to it. We don't want to rush it. We need to


update a responsible approach, listening to a range of views,


including both young people and parents alike. She's quite rightly


setting out the very useful advice, guidance, toolkits and resources and


campaigns that are available but will she agree with me at all of


those things, valuable as they are, are not an alternative to ensuring


that every single school in this country provides high-quality SRE to


all our children and young people? Absolutely. I agree we need to equip


all our young people to face the challenges of the modern world and


everything it throws at them. SRE is an involving and vital area of


education and we need to ensure we have guidance that is fit for


children growing up in modern Britain. Our aim is to secure the


very best teaching and learning in our schools on these issues as a


matter of priority, and also providing clarity the schools in


terms of what should be delivered, which I know members wish to see. We


recognise this is a very important issue and we will continue to


explore all effective means to remove sexual harassment and


violence from young people's lives. My honourable friend the Minister of


State for vulnerable children and families have is committed to update


Parliament further during the passage of this bill and he will do


his utmost to achieve the outcomes that keep young people safe and


supported to gain the skills they need to develop healthy and positive


relationships. Order. The question is this house do now adjourned. As


many as are of the opinion, say "aye". To the contrary, "no". I


think the ayes have it. Order, order.


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