NORTH Durham MP Kevan Jones has accused Local Government Secretary Eric Pickles of rewarding his “friends” in Tory heartlands while not caring about the North East.
The Labour MP repeatedly attacked Mr Pickles’s plans for a shake-up of local government finance as it was debated in the House of Commons, warning it would hit the region hard and create a “two-stage Britain”.
Under the Local Government Finance Bill, councils will be allowed to keep some of the business rates paid by local firms – which ministers hope will be an incentive for English town halls to boost growth.
Setting out the changes during the Bill’s second reading debate in the Commons, Mr Pickles said it would make England’s local government finance system more effective at supporting “local jobs, local firms and local enterprises”.
Currently councils collect rates from local businesses but “no sooner is the cash in than Whitehall whisks it away” to a central pot, with local authorities given a grant in accordance with a complex formula, Mr Pickles said.
But Mr Jones said: “The point about the proposals on business rates is that, yes, local government can have an impact on regeneration.
“But it is a damn sight harder in County Durham, even with the tremendous efforts of local business and the county council to secure inward investment, than it is in Canary Wharf or other prosperous parts of South East England.”
Warning of a “two-stage” Britain, he also said: “Let us look at what this Government and this Secretary of State have done on local government. I take my hat off to him, because he is rewarding his friends and his councils in the Tory heartlands.
“The idea is that we can somehow just write off great cities such as Liverpool and Newcastle, or other North East cities, as if it does not matter. Do the Government actually care? No, I do not think they do.”
Helen Goodman, Labour MP for Bishop Auckland, also warned Durham County Council fears it will lose £100m while the City of London will see its business rate take increase 140%.
Local Government and Communities Secretary Eric Pickles said places like Durham and north and south Tyneside would have benefited if the changes had been in place over the past five years because their growth in business rates outstripped the national average.
He added: “Let us just deal with some of these grumbles. Some are worried that the reforms might lead to polarisation and that deprived areas might fall behind.
“I can entirely understand – we have seen examples of this today – that people are reluctant to see change.
“It is always hard to let go of a security blanket, but we have been clear that we will ensure the hardwiring of safeguards for the most vulnerable in these reforms.”
A system of tariffs and top-ups would ensure councils starting from a low business rate could still meet people’s needs, said the Conservative Cabinet minister.
“We will have a levy on authorities that see a disproportionate benefit, with a safety net for authorities that see their business rates fall significantly.”
