Business Rate Supplements Bill

The Bill allows local authorities, in proposing and implementing a business rate supplement, to make provision to exempt, if they choose, business rate payers on empty property. The hon. Gentleman will also be aware that in the pre-Budget report the Chancellor said that, given the current economic circumstances, the rateable value threshold on empty property will be raised from £2,000 to £15,000 for next year, thus removing the liability to pay business rates on approximately seven out of 10 empty properties. However, the essential economic case for saying that there should be a liability for business rates on empty property remains, and it is this. It is likely to increase the incentive to re-let, reuse or sell empty business properties, and is therefore also likely to reduce the rents that other businesses pay for the use of their premises. That remains the central economic case for empty properties not being relieved from business rates in the long term, in the way that they have been in the past. The Opposition, in their motion and their interventions this afternoon, have been saying that they do not like the Bill or aspects of how far it goes. However, we have been urged to go further on business rate supplements than the provisions contained in the Bill. The all-party Select Committee on Communities and Local Government urged us to have no cap on the levy determined by local authorities, to leave ballots to local authorities’ discretion entirely and to allow lower-tier as well as upper-tier authorities to set their own business rate supplement. The all-party Local Government Association has also urged us to raise the limit on the business rate supplement to 4p and to allow local authorities a free hand to decide, in the light of local needs, whatever they should spend the gained revenue on. However, we have concerns about the financial implications for business. That is why we have struck the balance contained in the Bill, in preparing the policy and the provisions, and why a series of safeguards for business is set out in the Bill, involving statutory consultation in all cases. There will be an upper limit on the business rate supplement of 2p, a double lock ballot where the BRS will fund more than a third of the total cost of a project, and a rateable value threshold of £50,000, under which no business will be liable to pay a business rate supplement. We have also carefully considered the extent to which business should be able to influence the projects that are funded by business rate supplements. The involvement of business in decisions about projects will reflect its financial contribution. Businesses will be consulted in all cases; indeed, there is a legal obligation on councils to do so. It is right that business should have a vote when firms are picking up a larger share of the cost. Where businesses are providing more than a third of the money for a project, they will have a vote on the future of that project. However, where businesses contribute less, they will be consulted in the same way as others, including communities affected by that project. That is because it is not right for business to be able to block projects when it is contributing a small minority share of the funding.