Non-Domestic Rating (Lists) (No. 2) Bill — House of Commons, 2020-09-30
Topic: Domestic Commerce
Kevin Paul Hollinrake (Conservative, Centre-right): I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I have quite significant interests in the business rates system, in terms of my own business, so hon. Members should take that into account To touch on the comments from the hon. Member for Westmorland and Lonsdale (Tim Farron), I absolutely agree with his point about the business rates loophole for holiday cottages, and I hope that the Treasury is listening to that. It is an obvious loophole to close, and it affects North Yorkshire like it affects the Lake District I very much support the Bill. I sat on the joint Treasury Committee and Housing, Communities and Local Government Committee inquiry into business rates. We looked very carefully at the frequency of revaluation. We took evidence from a number of different sources. Some nations do the revaluation annually, not three yearly, and that would be better from a business perspective. It would give a more current perspective on the trading environment, although we should bear in mind that all business rates revaluations are fiscally neutral. Some people would benefit from a reduction in their business rates valuation, but that would have to be made up elsewhere by the multiplier changing to come back to the £30 billion a year that business rates raise I do not know whether hon. Members have a solution to that problem— I have heard a couple of speeches from Opposition Members who say that the business rates system is not fit for purpose, yet only one solution, from the hon. Gentleman. He suggested, potentially, a land value tax, but that has other inherent difficulties because it is, again, a value-based tax. Business rates are a valued-based tax. It has a correlation with the rental value of a property, which is, of course, inherently tied to the capital value of the premises. As Ronald Reagan once said, "There are simple solutions, but there are no easy solutions." We might all want reform, but finding reform that works and is fair is difficult—I will, however, suggest something before I sit down. The other issue with the current system is that reliefs and changes brought in as a transitional phase mean that those who should benefit from the revaluations do not do so for some time, in order to try to help with people who are "going up in value". It is far from a perfect system at the moment My first hustings took place in the village I have lived near all my life. One question from the audience was about a local retailer where many of us had shopped—Craggs electrical, a good local white goods retailer selling TVs and the like. It had just closed down after many years in that community. Mrs Craggs was in the audience and the questioner said, "Mrs Craggs’ business has just had to close down because of the situation. She cannot pay her business rates. It is just unaffordable. What are the Government going to do about it?" The reality is that Mrs Craggs’ business was closing down not because of Government business rates, but because of the different shopping trends of all the people in that room; all those people were applauding and saying we should take some action, but the reality is that fewer and fewer of us are buying that kind of stuff from shops. So it is not about what the Government are or are not doing; it is about shopping trends As my hon. Friend the Member for North Norfolk (Duncan Baker) mentioned, before the crisis, 20% of shopping was done online but that figure has risen rapidly to 35%, which is making the whole system difficult. Most businesses look at the rent and the business rates when they first take on a premises, and then plug that into their cash flow and decide what they can afford to pay. That is what a good businessperson should do. It is not that the business rates system is anachronistic; the pace of change is the problem. At some point in future, when all this has settled down, businesses will say, "We can afford to pay this rent and these rates", but the difficulty is being caused by the pace of change.