Business Rates: Small Retail Businesses — House of Commons, 2018-10-09
Topic: Domestic Commerce
Melvyn John Stride (Conservative, Centre-right): Madam Deputy Speaker, may I say what a pleasure it is to see you in the Chair after the recess? It is also a pleasure to realise that I have an hour and 16 minutes in which to address my response to my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), but I may cut it down just a little bit to please the House I thank my hon. Friend for bringing this important debate to the House tonight. It is entirely characteristic of him that such a debate is in his name, because throughout his parliamentary career he has been a strong advocate of business both across the country and, importantly, in his constituency. He was right to highlight in his opening remarks the sheer size and importance of our small business community—there are 5.7 million small businesses, a figure that he cited—and the recent growth that we have had under the coalition Government and this Government. He has worked closely with the British Independent Retailers Association on various thoughts and proposals, some of which he put forward this evening and to which I shall respond in a moment My hon. Friend is right that business rates are an important tax. When we consulted on business rates back in 2015 and considered the various alternatives, several different suggestions were made, such as turnover taxes, taxes on gross value added and so on. Inevitably, with every kind of measure or metric that one focused on, they had their own particular drawbacks and complexities and so on. The conclusion that was reached at the time was that business rates were a stable tax that is difficult to avoid because property is static by definition. Of course, as my hon. Friend also rightly pointed out, business rates raise around £25 billion a year, which is a significant contribution to our public services and funds, in turn, our doctors, nurses, policemen and policewomen and so on. The Government recognise that business rates represent a high pressure on small businesses, particularly for high street retailers. Rates are a fixed cost that cannot be avoided, irrespective of whether a business is profitable or otherwise, which is why we have undertaken a series of important measures. In the 2016 Budget, we made 100% small business rate relief permanent, at that time increasing the threshold for the relief and taking 655,000 of the smallest businesses out of business rates altogether. We also increased the threshold for the standard multiplier, taking 250,000 properties, including most high street shops, out of the higher rate of business rates However, that is not all. Following the most recent property revaluation in 2017, we introduced a £3.6 billion transitional relief scheme to cap and phase in bill increases. Additionally, at spring Budget 2017, we announced an extra £435 million to support those businesses facing the steepest increases in bills, including £110 million to support 16,000 small businesses losing small business rate relief or rural rate relief to limit increases in their bills to the greater of £600 a year or the real-terms transitional relief cap for small businesses in each year. We also provided local authorities with £300 million of funding for discretionary relief to support individual cases in their local area In parallel to all that, we have taken significant steps to ensure the fairness of the business rates system as a whole. That is why, at spring Budget 2017, the Chancellor announced that we would reform the revaluation process to make it fairer. I am pleased to say that we have delivered on that by increasing the frequency of business rates revaluations from every five years to every three years, following the next revaluation. That is an important point in the context of what my hon. Friend said about the difference in the rates being paid by the out-of-town store and by retailers on the high street. If we can have more frequent revaluations, as rateable values on the high street perhaps fall, we can more quickly pass on the benefit of that within the system.