UK Parliament / Open data

Business Rate Supplements Bill

Absolutely right. We face a massive additional tax—or potential for it—in the business supplementary rate, which is the subject of the Bill, but it must be judged against the background of the business climate. You are right, Madam Deputy Speaker, that I have argued that enough, but it is important to make the point. Where did the idea for a supplementary business rate come from? It will not surprise you, Madam Deputy Speaker, to learn that it came from the bowels of Government. I believe that it was first raised in a White Paper in 1998. The idea did not therefore originate from the business sector, the general public, or even local government. It came from the heart of national politics—this place. After its publication in the 1998 White Paper, it resurfaced in a Government-sponsored balance of funding review in 2004. We face a Bill that is thoroughly new Labour, Government sponsored and—business feels—thoroughly anti-business. Business says that. I want to quote from businesses that have expressed deep concern about the Bill. It is right that the House understands the breadth of feeling in the business community about the measure. On 23 December, the CBI, which represents a third of the private sector work force—240,000 businesses—stated:"““The CBI is concerned that BRS could add significantly to the business tax burden.””" That is the heart of the matter. The CBI does not trust BRS not to widen, and become the thin end of the wedge and a greater tax than it is innocently portrayed to be. It does not trust the Government on the matter. The quotes are all from recent statements. On 6 January, the Institute of Directors said:"““The IOD strongly opposes BRS in principle. They would be an additional burden on business which bears no relation to profile and could jeopardise their commercial viability.””" If the Government do not take that statement into account, I do not know what they will do about placing further charges on business. On 9 January, the British Chambers of Commerce, representing more than 100,000 businesses, which employ 5 million people, stated:"““With the UK economy facing a recession the BCC is opposed to the introduction of BRS proposals across the country which could cost business up to £597 million per year.””" I emphasise £597 million a year, to be doled out in a way that—in many business men’s eyes—will not help businesses. They are most concerned that the money will leak out and be smoothed into other areas of activity. That is one of the Bill’s dangers—it does not tie up the way in which money is spent anywhere near strongly enough to meet with businesses’ approval. The British Retail Consortium, which represents a massive part of the British retail industry, is especially concerned. On 9 January, it stated:"““The BRC does not support the introduction of BRS… it has the potential to add significantly—and disappointingly—to retailers’ costs.""It saddles retailers with new costs when they can least afford it—it could add an extra £160 million a year to tax bills. Retailers face a massive £16.6 billion cumulative increase in rate bills from 2010.””" I do not need to point out to hon. Members how many retail businesses are going to the wall. They have read about high profile companies, but every Member will point to his own high street, shopping areas and retail businesses, and say, ““He’s gone””, ““She’s gone””, ““That’s up for sale”” and ““That shop is now vacant.”” That will increase dramatically in the coming year or two years—perhaps even three years. Let us consider construction, which is vital for this country. The Government say that they want to encourage it and look to it to build more houses, provided that they can get credit moving. On 6 January, the Federation of Master Builders stated:"““At a time when 60 per cent. of FMB house builders are reporting falling workloads the last thing builders need is another tax.””" Just at the time when we may begin to see green shoots—my prediction is April 2010; we might tell the Chancellor that—we provide the opportunity to levy a new tax on business. The Federation of Master Builders is aghast. The Institute of Chartered Accountants in England and Wales stated:"““BRS could prove a tax too far—it could add up to 10 per cent. to a company’s council tax bill.””" Moreover, the Forum of Private Business stated:"““The FPB is disappointed that despite vocal opposition the Government intends to press ahead with this legislation. It is deeply unpopular. It would be a considerable barrier to growth.””" The Federation of Small Businesses stated:"““The FSB opposes the Bill. Small business rate bills are on average proportionally three times greater than larger businesses. The FSB will continue to oppose the BRS.””" There could not be a more solid array of business organisations lined up against a proposal from a so-called business-friendly Government. We are for ever inundated with messages from the Prime Minister, the Chancellor and Labour Members about how they understand, support and want to help the business sector. One would therefore have thought that they might listen to business and help it in the way it wishes to be helped. However, the Bill is an example of how all the Government’s words come to very little when action is required. As my grandmother said, and as I repeat again and again, fine words butter no parsnips. It is no accident that the business sector’s trust in the Government and the Prime Minister has dropped dramatically, and this Bill is one of the reasons. The attitude of business is perhaps best summed up by a statement that I received from Mr. Richard Gayler of Scanfit Ltd and which is supported by many business leaders in Northampton, South:"““This is another stealth tax. My local Council””—" he is not a Northampton man, nor is Scanfit a Northampton business; he wrote to me through a small business contact—"““treats me as a cash cow in exchange for what I see as no increase in services provided.""Many companies are thinking of making redundancies because of the current economic environment and an increase in business rates will mean they will have to consider making even more.””" No wonder business is horrified at the prospect of another tax. Businesses are horrified for a number of reasons. They have written to me in their hundreds and said that the Bill is inadequate, ill prepared, badly written and deficient in many respects. That is the message that I have received from business about the Bill. The Government tell us that the Bill is intended to enhance business partnerships and recreate a better understanding between local government and business, yet business is totally opposed and concerned about the quality of the Bill. Let me voice some of those concerns, some of which have already been mentioned. There is a universal wish for a ballot on all projects. That is a must where proposals are made by local authorities. I have worked in local authorities as an elected councillor for nearly 12 years and I have been a party officer working at the constituency level for 50 years next year. That is a long time to be in politics, and one might feel that the effort that I have made to arrive in this place so late in the day has hardly been worth it. The truth is that local business is very wary indeed of estimates produced by local councils. Local business wants much more involvement in the business rate supplement process, if it comes to fruition, and therefore wants a ballot for all projects, because it knows that local government estimates can be so way out. We have seen even the Government’s estimates being pretty off the mark. Dare I talk about the Olympics, Madam Deputy Speaker? Would that be unfair to the Government? What was it—£2.9 billion?
Type
Proceeding contribution
Reference
486 c74-7 
Session
2008-09
Chamber / Committee
House of Commons chamber
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