Rating (Empty Properties) Bill

Let me begin by reminding the House of the origin of business rates. They were developed in, I believe, the late 1960s as a way of raising revenue to help fund local services. That is, of course, a worthy purpose, but now a Bill is being introduced whose purpose, far from being to help fund local services, is to help plug holes in national debt. It is highly regrettable that a form of local revenue raising should be used simply to raise revenue. We have been led to believe by the way in which this Bill was described—or barely described—by the Chancellor in his Budget speech, and the way in which it was introduced by the Economic Secretary in the Ways and Means debate and again today by the Financial Secretary, that it is somehow of benefit to broader society. Indeed, I believe that it has been described as of environmental, social and economic benefit. It is, however, plainly and simply a money-raising measure, and a significant one at that. As was pointed out earlier, the Red Book states that in the first year alone the Bill will raise £950 million, which makes it the fourth largest revenue-raising measure in this year’s Budget. An enormously significant measure is being introduced behind a smokescreen of social good, and I hope that my speech will help to explode the myth. There is another possible explanation. It may—not for the first time—be a case of the Government’s basic lack of understanding of some of the commercial realities that underpin economic activity in large parts of our economy. I shall say more about that later. The Government claim that the Bill will help to establish a more level playing field between different types of property use. That is true to an extent, but only to an extent, because the Bill maintains the distinction between commercial premises for retail, office and other use and those for industrial and storage use. If the Government were being straightforward, they would have acknowledged that. My hon. Friend the Member for Surrey Heath (Michael Gove) used an expression that may be common Scottish, or perhaps Surrey, parlance. He said that the Government were ““praying in aid”” both Sir Michael Lyons and the Barker review to provide justification for the Bill. Indeed they are, although I would use rather more basic and less colourful language. I would say that the Government were hiding behind the claims in those reviews to provide some sort of ethical justification for a tax grab. There are some difficulties with that approach, not least Sir Michael Lyons’ comment that the Bill would constitute an appropriate reform in the context of other measures that he thought the Government might like to introduce. He was advocating that the Government should wait until the revaluation that he was proposing, which would start in 2010, so the negative effect on business of this increased taxation could be absorbed within the adjustments to rental valuations and the impact that that would have on business rates and rateable values. He wrote in section 8.107 of his report:"““Depending on the size of complexity of the task involved, it might be possible to remove exemptions from the beginning of the 2010 list in April 2010.””" Of course the Government have leapt upon that suggestion and, as we have heard—notably from my hon. Friend the Member for Bromley and Chislehurst (Robert Neill)—taken it up with alacrity because of the significance of the revenue-raising measure. Sir Michael Lyons made some interesting observations about the extent of business rates and their impact on revenue raising for the Government and on businesses in general. Rates are a very significant tax revenue raiser—[Interruption.] I do not know if the Minister for Local Government is intending to intervene—