Business Rates and the Recession

My hon. Friend makes a valid point. By the time we get to the end of the recession, where will the buildings be to house the new industry that we will need to prosper? The Government amendment refers to the deferral of the small companies rate of corporation tax. That is a big deal, but why did the Government raise it in the first place? They are saying, "We will tax you more, but we will leave it a little bit longer before we do in the hope that you survive long enough to be able to pay." Well, thanks very much indeed, Mr. Chancellor—that is really big of you. Small business rate relief is welcome, but even more welcome for the Chancellor is the fact that the Government still get most of the revenue. It is a great gesture, but it does not have the Heineken factor. It does not reach the companies that other initiatives cannot reach because it is not automatic. If the Government are serious about helping the smallest, most vulnerable businesses, they could make that change at a stroke, and I am delighted to hear from the hon. Member for Bromley and Chislehurst (Robert Neill) that there is a glimmer of hope from the Government on this matter. I hope that there will be an announcement to that effect in the near future. The amendment mentions other matters, such as the backdating of rent increases for businesses based in ports, which has been discussed at some length. I do not believe that the Government understand what the measure has done to business confidence. How can a business consider with enthusiasm investing in the United Kingdom when the playing field on which it thought it was operating is suddenly turned upside down and it is landed with retrospective rates? Indeed, we have heard that companies are actively considering pulling out of ports. Although the eight years to pay is welcome, the principle has been damaged. The message that the Government are conveying is the worst possible to potential investors. Let us consider the latest cause of worry for business and examine two factors that the hon. Gentleman rightly called a double whammy: the abolition of transitional rate relief combined with an average 5 per cent. increase in business rates. Scrapping transitional rate relief will cost business an estimated £100 million. The scheme is due to be implemented on 1 April—April fool's day. Unfortunately, tens of thousands of businesses will not appreciate the joke, but I am delighted to hear from the Minister for Local Government that there will be new transitional arrangements. Will they be in place for businesses from 1 April so that the horror that some businesses in the United Kingdom face will not be realised? The second element of the double whammy is pushing ahead with business rates at a 17-year high increase of 5 per cent. at a cost of £1.15 billion to business. The retail prices index today stands at 0 per cent., but business rates will be increased by more than 5 per cent. If any member of the Government perceives logic in that, I would be grateful for an explanation. I know that the rates are normally calculated from the RPI in the previous September, but the Government have shown themselves able to act swiftly in announcing new initiatives when crisis measures are needed. We must also consider the impact of the revaluation, the implementation of which the Conservative motion asks to be delayed. Some businesses might benefit from the revaluation, and I am glad that the Minister said that some sort of phased transition could be an alternative to delaying it. Of course, we must do something.