Asked by Lord Kennedy of Southwark To ask Her
Majesty’s Government what action they propose to take in the light
of the concerns expressed about the increases in business rates
facing some businesses. Lord Kennedy of Southwark (Lab) My
Lords, I beg leave to ask the Question standing in my name on the
Order Paper. In doing so, I refer the House to...Request free trial
Asked by
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To ask Her Majesty’s Government what action they propose to
take in the light of the concerns expressed about the
increases in business rates facing some businesses.
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(Lab)
My Lords, I beg leave to ask the Question standing in my name
on the Order Paper. In doing so, I refer the House to my
interest in the register.
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The Parliamentary Under-Secretary of State, Department for
Communities and Local Government and Wales Office (Lord
Bourne of Aberystwyth) (Con)
My Lords, a significant majority of businesses will end up
paying less as a result of the business rates revaluation and
changes to relief. The generous reliefs we are introducing
mean that 600,000 small businesses are set to pay no business
rates at all. We have also confirmed £3.6 billion of
transitional relief to help those companies facing increased
bills. We are looking at the hardest-hit businesses ahead of
the Budget.
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Mary Portas has described the valuation as madness. The chief
executive of Sainsbury’s, Mike Coupe, has called for the
revaluation to be abandoned. The Federation of Small
Businesses is against it. In Southwark, the borough I grew up
in, one business in the north of the borough is facing a 50%
increase in its business rates—which equates to £66,000 per
annum or, to put it another way, three jobs at risk. Will the
noble Lord agree to speak to his colleagues in the Treasury
to impress upon them the concerns expressed and to make it
clear that real substantive action needs to be taken in the
Budget to deal with this problem and protect the high
streets? Tinkering around the edges will not do.
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Yes, my Lords. I should say, however, that the revaluation
system has been a constant of life since the 1988
legislation, and three revaluations were held under the
Labour Government on exactly the same basis as this one, at
arm’s length. But the noble Lord is right: some businesses,
particularly larger businesses in London, have been hard hit.
My right honourable friend the Secretary of State for
Communities and Local Government is speaking with the
Chancellor and looking at possible options, and we can expect
an announcement in the Budget.
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(Lab)
My Lords, does the Minister agree that sometimes we can
actually learn from our European neighbours? France exempts
500 bookshops from business taxes, recognising them as
cultural assets in their local communities. But our
Government want to clobber our bookshops with rates rises
that are, on average, 100% in London and up to 50% for a
small independent bookshop in Lincolnshire. Meanwhile, large
retailers’ distribution centres get massive cuts. I declare
an interest as a publisher. Can the Minister confirm that he
will look at the impact of this regressive tax on the one in
four of our bookshops now threatened with closure?
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The noble Baroness makes a powerful case. As I have already
indicated, small businesses are set to pay no business rates
at all, and we have increased the number of small businesses
by moving the threshold to a rateable value of £51,000.
Therefore, any business under that will not be paying
business rates at all. However, the point is well made and,
as I say, there will be action in the Budget for businesses
that got steep rises.
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(LD)
My Lords, I do not recognise the Minister’s description of
the high streets. Our high streets are in crisis. How can
they compete with the likes of Amazon, with their
low-rateable land away from the high street? During the
coalition, a Liberal Democrat Minister commissioned a review
of business rates which was scrapped by the Conservative
Government. Can the Minister say whether they now regret
scrapping that review, bearing in mind the mess they are in?
Can he also comment on the fact that business rates are dealt
with by the DCLG—which obviously considers it a good
earner—whereas it should really be dealt with by the Business
Secretary?
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My Lords, there are quite a few questions there. The point
that the noble Lord made about the high street and other
forms of business activity has some merit, but it is quite
separate from the issue of revaluation, which is done at
arm’s length. We are open to looking at options, but
obviously it will take time and we could not expect to do
anything on this before the Budget. As the noble Lord will be
aware, the Treasury did look at this in 2015 and, having
consulted widely, concluded that the present system was best.
However, I appreciate that globalisation, the internet and
the vitality of the high street are factors that have to be
weighed in the balance, so we are happy to look at this. The
noble Lord asked a few other questions. If I may, I will
respond to him in writing on those and put a copy in the
Library.
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The Lord
My Lords, will the Minister inform the House whether Her
Majesty’s Government would look at the feasibility of setting
the threshold of business rate relief at a local level,
thereby protecting small independent businesses, many of
which are now at risk, especially in high-value areas?
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My Lords, the right reverend Prelate makes an important
point. In a sense, of course, localism is already fed in
because the valuation is done locally and should reflect
local conditions. As I have indicated, small businesses, with
up to £51,000 in rateable value, get the small-business rate;
and many small businesses—600,000 in the current rollout from
April this year—will be exempt. But the local factor is taken
account of by the fact that there is a local valuation that
reflects local rental values.
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The (CB)
My Lords, not just businesses but council-run schools, among
others, have expressed concern about these increases, which
will put yet another unacceptable pressure on our education
system. Can his department and the DfE perhaps get together
to address what are very real concerns?
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My Lords, I would be interested in hearing more from the
noble Earl on that particular issue. Clearly, as we have
found out and as has been true of any revaluation, you always
hear from the losers, for understandable reasons, and I am
not objecting to that. But once again I remind the House that
there are significant numbers of people in large parts of the
country, particularly in the north and the Midlands, who
benefit from this revaluation, and understandably, they are
not the people rushing to the press and saying how wonderful
the Government are. It is always going to be those who lose
out. But many people have gained from this process.
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