Caroline Spelman speaking at NLGN Annual Conference 2010 – Part One

January 29, 2010

Caroline Spelman spoke to the NLGN conference on social housing and supporting business:

SPEECH IN FULL

Ladies and Gentlemen

Thanks you for inviting me to speak here today.

Last time I had the pleasure of speaking at an NLGN function we looked in detail at the localism agenda set out in our Green Paper “Control Shift”.

Today I would like to spend a bit of time focussing on the critical role local government could be playing in helping businesses, and the important challenge that lies ahead in terms of safeguarding and enhancing the rights of those in social housing.

Where these two critical functions are linked is that they will both be very important in determining our capacity to deliver meaningful regeneration.

And in turn that will inform the extent to which we, as a country, are able to catch up with our competitors who came out of recession long ago.

I’m sure we would agree that it is a relief to have confirmation that the UK has finally nudged out of recession, but our economic recovery is fragile and, if I may say, weak.

That means the challenge facing business is going to be that much tougher – all businesses – large, medium, small – local, national, global.

It rests with politicians to make sure they are given every advantage and every opportunity to succeed, generate revenue and generate employment.

Some will be better placed than others, which is why we would enable local councils to give business rate discounts where they see a local firm that needs a lifeline.

This will be an important stepping stone in binding together the success of the councils with the business communities they serve.

Where businesses thrive councils and local communities should share in the success, on the other hand where businesses need a helping hand more support from councils and communities should be able to offer it.

So as well as giving councils the power to apply discounts we will give councils the right to keep the proceeds of business rates where they have new business activity in their area that outperforms the average.

This will deliver at a stroke a powerful and urgent incentive to out-perform rivals in attracting new businesses to their area and deriving the income.

For too long councils have, in essence, only administered the business rate before pass-porting it up to Whitehall.

What a missed opportunity.

The stimulus of business rates as a six year income stream will really focus Town Hall minds on getting shops filled and offices let.

If businesses are going to be the engine room for pulling us out of the recession the least they can expect is a tax regime that’s on their side.

But as I have said before, I fear there is a gathering storm for business which is going to hit just at the time we need to be giving them maximum support.

In less than ten weeks businesses will be issued with new business rate bills which are based on the revaluation that took place a year before.

The problem lies in the revaluation being based on a crude snapshot of rateable values – taken at the height of the property boom.

But since then the property crash and its impact on rental values has depressed the market to such an extent that the rateable values of April last year are completely irrelevant.

I fear this will send many businesses to the wall – needlessly.

This is a £21bn tax regime, being radically changed as we are teetering outside recession and there has not even been an impact assessment carried out?

As such there is no assessment of the convergence of the payment deferral scheme coming to an end in 2010, the impact of the business rates revaluation on bills and the closure of transitional relief for businesses.

But the viability of those businesses is not confined to their role as operating units in the country’s economy.

Those businesses are the lynchpins of communities and neighbourhoods and they are the jobs on which families depend.

I have a West Midlands constituency.

The constituency itself is part-urban, part –rural.

The West Midlands generally, because of its longstanding dependence on manufacturing, has been acutely hit by the recession, and I have seen the impact at first hand.

I’ve seen the impact at job clubs, in benefits claimants and on housing lists.

I’ve got a council estate of 60,000 people in my constituency.

It’s an estate where I spend a lot of time, and where I would add we have a very gifted and dedicated Conservative councillor.

There’s a strong sense of community, and (add additional recommendation here), but it bears the marks of an estate that was built in the 1960s beyond immediate access to alternative sources of employment.

So I see the scale of the challenge that lies ahead of us when it comes to social housing.

It is one that my colleagues and I are unflinchingly committed to.

And I want to take this opportunity to make something very clear.

People living in social housing should not be bullied by the scare tactics of irresponsible politicians.

Not only will we protect the rights of social tenants we will strengthen them.

We will go into this election with policies that are as exciting and appealing to social tenants as anyone else.

Instead of taking social housing and social tenants for granted we are proposing thoughtful and quality of life changing policies which will help narrow the gaps between rights between those in private housing and those that are not.

Let me give you five very clear examples:

We are proposing to pilot a Right to Move for social tenants whereby they can insist that they are aided by their landlord in relocating elsewhere within social housing.

If you rent privately it’s simply a case of relinquishing the lease and going to another letting agent elsewhere in the country, why should social tenants have the same degree of flexibility?

They should and we will help them by setting up a national database through which social tenants can swap homes.

We want to help social tenants realise their potential, and that’s why we have pledged to lift the restrictions which prevent social tenants setting up their own business from their home.

People in social housing should be given the opportunity to build up an equity stake in the home they have looked after and cared for, so we are offering them the right to build up to a 10% equity stake which they can cash in should they wish to leave social housing. That 10% could be the deposit or nest egg to give them a real start on the housing ladder.

And the final two points are to do with supply.

We all know about the chronic under-supply of social housing. Despite the property boom the construction of social housing has been at its lowest level since World War II.

We need more social housing and we want more social housing. Which is why we are offering to match councils with 125% of council tax proceeds on new social housing for six years.

This will be a powerful incentive for delivering the social housing we need, but we are also proposing Local Housing Trusts whereby communities can grant themselves planning permission for small scale, incremental growth in affordable housing.

These measures will not only expand the supply of social housing significantly, they will transform the rights and opportunities available to those people living in social housing.

Society as a whole benefits from a strong, welcoming and flexible social housing arrangement and I hope you take from this how determined we are to make that the case.

So to conclude,

I believe the shift of power from central to local government can help kick start our weak economy with a bottom-up approach to help businesses, communities and individuals achieve their full potential in the place they choose to live and work.

Freed up from the grip of Whitehall’s culture of performance targets, inspections and ratings councils can turn to face the communities they serve with improved services and a positive incentive to attract business in and provide an attractive environment for people to live and work.


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