Non-Domestic Rating (Lists) (No. 2) Bill — House of Commons, 2020-09-30
Topic: Macroeconomics
David Timothy Simmonds (Conservative, Centre-right): The reform of business rates and revaluation has been in a holding pattern for many years, and those of us who have spent time in local government will be conscious that the expected impact of that reform on local authority finance has been hotly debated. I think that we are still of the view that business rates in their current form are the worst possible solution to financing local government, with the exception of all other available choices. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) made that point strongly in describing the hard choices we need to make in identifying alternative sources of finance. It seems clear that, in the Treasury, the business rates billions remain a key building block of our national budget. As a consequence, there has been a long-held reluctance to tinker with them, for fear of the wider impact on the bigger fiscal picture Business rates have been in existence for a long time. For many of our citizens, they used to walk in lockstep with residential rates, long abolished. Even today, the variation in business rates income at local authority level is reflected in the grant funding—the traditional revenue support grant that was the basis of most local authority funding—and in things such as school funding. When schools were first set up as a local authority responsibility, local authorities funded them according to their incomes from business rates and domestic rates, and that differential has been carried forward into the funding rates of our schools today. That long-standing impact and the fiscal picture across government of linking day-to-day expenditure on these services to the income we can rely upon coming through business rates remain in place. That goes to the heart of the point that a number of colleagues have made about the need for reform, but we need to address it as part of that complex formula I would like to add my voice to the request from many colleagues for greater flexibility in the way that business rates are deployed. I am fortunate to represent a constituency that has a great diversity of local businesses and very vibrant high streets. Many of those new businesses have grown up to take the place of more traditional activities, some of which have seen their departure mourned by local residents, and others perhaps less so. For example, a sports club has closed and been replaced by a children’s soft play area, because the baby boom means that there is now a much greater market for that kind of activity. The bank that I used to be responsible for is now a bookshop and coffee shop on Pinner High Street, reflecting the fact that our high streets can remain vibrant This is not about saying that the Government or the local authority need to pick the businesses that they think should be winners on the high street. It is about reflecting the fact that the challenge of online versus bricks and mortar retailing, the changing nature of the high street and our ability to keep it vibrant on behalf of our communities means that we need flexibility.