MP demands debate on rates change that could cost poor towns millions

Hull North MP Diana Johnson says the city and other deprived areas will be the losers – Hull Council by as much as £45.5m – if boroughs like Westminster are allowed to keep the business rates they raise.

Labour says Westminster – home to the some of the world’s biggest businesses, shopping streets and tourist attractions – could get to keep the £1bn it currently contributes to the national Business Rates pool, which is redistributed to other councils around the country.

As reported in the Yorkshire Post yesterday, Ministers have denied the rug will be pulled from under poorer town halls. Deputy Prime Minister Nick Clegg said the system will “start on a level playing field – where you progress from there is up to you”.

But Ms Johnson called for a debate during Business Questions yesterday, and added: “Until we see what they are proposing assurances from Nick Clegg don’t count for that much, especially given his previous record. The only reason that many of the wealthier councils have lobbied for this is that they will gain – meaning someone else will lose out.

“We’ve already seen the Tory-led Government target Hull and other deprived area for the deepest cuts in council funding – nine per cent this year alone.

“This move on Business Rates, launched by Nick Clegg, could be another kick in the teeth for Hull people and local services, as we see money taken away from Hull and given to wealthier areas such as Westminster.”