Non-Domestic Rating (Lists) Bill — House of Commons, 2019-06-17
Topic: Domestic Commerce
Clive James Charles Betts (Labour, Centre-left): I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I am the vice-president of the Local Government Association I do not want to keep the Minister too long from his exciting bedtime reading, which he was telling us about in questions earlier. In principle, I accept what the Bill tries to do and I think it is a sensible move. The Housing, Communities and Local Government Committee has conducted an inquiry into business rate retention and, more recently, the high street. The view generally has been that business rates should be revalued more often and that three years is a reasonable compromise. Five years is too long, because we get major changes in rating values that we then have to catch up with, and we then have dampening mechanisms, appeals and so on. Any more frequently would be too much change too quickly, so three years is a reasonable compromise on which I think there is general agreement I hope the Government really mean it and that we will have three years. In 2015, when we had five years, the valuation was postponed for two years. Why? It was because we were going to have a general election in 2015. That was the reason and everyone knows it. That meant seven years between revaluations, which created an even bigger problem with even bigger changes and a lot more difficulties, from which we are still suffering Are there any implications for the business rate retention scheme? Presumably, the Government are still going ahead with the 75% figure. Is it going ahead from next year? We are still not quite sure, in these changed circumstances. Will it have any impact particularly on the issue of resets within the system? Presumably not, particularly if a rolling reset is done. I presume that would be covered and would not be affected, but it would be helpful to have reassurance on that I echo the point made by my friend the hon. Member for Harrow East (Bob Blackman). All the evidence we have heard, in our high street inquiry and the business rate retention inquiry—I am currently a guest on the Treasury Committee inquiry into business rates—shows that we just cannot carry on not recognising the change of circumstances, particularly with regard to the high street and 20% of sales now being done online, which is the highest percentage anywhere in the world. At some point, the system will have to change. Amyas Morse, the then Comptroller and Auditor General, made the point to the Committee that simply having a system based on another age and on floor space was taking no account of the changes happening now in modern society. That was not sustainable in the long term and there had to be change There could be a complete comprehensive review, moving to a completely different system of raising money from businesses. That is one way. I still think it is hard to avoid taxation on physical buildings and that they are probably a good basis for a system, but there has be some reform and some addition. The Select Committee’s inquiry into the high street recommended that we look at a number of alternatives, including the potential for an online sales tax. That would take the pressure off those elements of business, particularly high street shops, which are most under pressure. That still needs to be looked at Finally, appeals are still a problem. We hear that local authorities are holding reserves for very obvious reasons. We have changed the system and we now have a check and challenge. We have been told that it is discouraging businesses from appealing, so there is that disadvantage, compared with having lots of appeals that were bogging down the system. Fundamentally, the evidence showed that the valuation office is understaffed and under-resourced to deal with appeals. That came up in the Treasury Committee inquiry. I hope Ministers will look at that Whatever system we have, there has to be a proper appeals system that works expeditiously for the benefit of the appellant and local authorities. A number of issues still need to be considered, but the principle behind this small Bill is a good one that should be supported.