Over the next few years businesses across the North could be set to benefit from a major revolution in the way that councils are funded.

By 2020 central funding of local government through the revenue support grant will be replaced entirely by business rates income. At the moment councils keep half the business rates collected in their area. The uniform business rate, set in Whitehall, will be scrapped and the Combined Authorities around Manchester and Liverpool will be able to increase the tax, but only if business agrees.

But in the new regime local councils will be able to reduce business rates too, giving the opportunity to encourage new firms into their area, boost growth and increase their rates income. This is certainly the intention of the Chancellor who is behind this change. However there are a couple of snags. Councils will have to carefully balance the impact of new firms moving in and swelling their coffers, attracted by competitive business rates, and the pressures on their spending on services like adult care.

The other problem is that all this may widen the North South divide. While it will be relatively easy to attract businesses to move into council areas in the south, further north it is a different story. Calculations have been done about the impact of the new regime in the North. These show what proportion of the national share of business rates an area would need to retain to replace the current central grant. Scores below 100% mean an area will cover its lost grant. London scores 52% whereas the North West score is 104% Relating these “self sufficiency” scores to specific councils makes even more dramatic reading. While Westminster is quids in because it can cover its lost grant with just 8% of its business rate, Knowsley scores 241% and would experience a massive shortfall of income. Even within the North there are sharp contrasts with Trafford on 38% whilst Wirral is on 187%.

Safety net mechanisms will be put in place to even out some of the disparities. Next month’s Budget is likely to reveal the details of how it will be done along with the outcome of the government’s review of business rates. It’s expected to confirm that rates will still be linked to property values.

The government’s overall intention is that councils should be incentivised to boost their business rates by competing to attract firms in their area.


I see the former Crosby MP Shirley Williams has retired from the House of Lords. Roy Hattersley did the same recently. They were both politicians of the highest quality in the Labour governments of the sixties and seventies. Shirley Williams should have been our first woman Prime Minister.

It says a lot about them that they think it is time to retire with dignity, although I think they both still had a great deal to contribute to the House of Lords.



Next weekend those cocky members of the Coalition, the Lib Dems, are likely to try and crash the Health Bill into the buffers.

They nearly derailed it last year. Their Spring Conference forced the government to “pause” consideration of the legislation. The next few days will see a tussle between activists and Lib Dem party managers trying to keep the issue off the agenda at their Gateshead conference.

It is all too much for some Conservatives who are fed up to the back teeth with their Coalition partners. The Lib Dems have already begun their approach to the 2015 General Election, trying to remain in the Coalition but distancing themselves from unpopular measures. But the more they attempt to curry favour with their grassroots, the more they infuriate those Tories who have little time for this forced marriage with the Lib Dems.

This week I was at a meeting with a Tory councillor present. She was criticising government policy. When I pointed out that it was her government, the forces of hell descended on me. She glared at me and declared “It is not MY government.”

Whether the Health Bill is debated at Gateshead or not, the legislation is already causing casualties in Lib Dem ranks in the North West.

Paul Clein was a leading member of the Lib Dem administration that governed Liverpool for over a decade and a plausible candidate for leader of his group in the city. He has now resigned from the party that he has been a member of all his life.

He believes that although Shirley Williams has wrung some concessions from ministers on the health bill, the legislation should have been opposed by the party from the start because it was not in the Coalition agreement.

But Clein is not rushing off to join the Labour Party. In his resignation message, he says they “nauseate” him for “acting holier than thou”, pointing out how much private provision they introduced into the health service.

This criticism is unlikely to worry Andy Burnham. The Leigh MP is having “a good war” as Shadow Secretary of State for Health. When he stood for the Labour leadership 2 years ago, he was little known outside the North West. Now the fresh faced Everton supporter is growing in stature within the party and I wouldn’t rule out him becoming leader one day.

But let’s get back to the Lib Dems. Party President Tim Farron is set for a very difficult time in Gateshead. Having let slip on Granada’s Party People programme that the legislation should be dropped, the role of the Westmorland MP will be pivotal next weekend.

As will Shirley Williams, who is remembered in these parts for her brief period as MP for Crosby. Having achieved some concessions she might prove a problem for Lib Dem rebels trying to stop the bill. Altogether she has had a long career in British politics, and although she has never held the highest ministerial offices, Williams is widely respected.

The Conservatives remain convinced that the NHS is in need of reform and they are probably right, but not by this complex bill. Vested interests, including some doctors, have always opposed reform. That was true in 1948 when Labour’s Nye Bevan had to “stuff their mouths with gold” to found the NHS in the first place.

It is a right old mess. Following an unwelcome modern trend, there has been a presumption that the bill would become law. Many of the Primary Care Trusts have already wound up. So going back would be very difficult.

Like that other tortured soul, Macbeth, the Health Secretary Andrew Lansley is probably concluding “returning would be as tedious as go o’er”.

Bring on the witches!