Business Rates and the Recession

I shall be brief because I know that time is short. I represent an area where, sadly, the unemployment figure is considerably higher than it was when my party left office in 1997, there are many empty premises and, throughout the constituency, only 160 job vacancies are advertised through Jobcentre Plus. The issues that we are discussing are crucial because the one thing I do not want to see is that unemployment total going even higher, and I fear that unless we do something about business rates, among other issues, it will do so. I make no apology for running through some specific concerns about business rates that have been raised with me directly by local businesses. One small business woman came to me not long ago concerned about how the valuation office had come to her shop and done a quick zap with a laser gun; although the people had been there for only a couple of minutes, a few days later she got a bill for an extra £900. She complained to me that no account had been taken of local conditions. A business man whose business is close to that lady's said—I raised this with the Minister earlier—that his business is paying the same amount as is being paid on a much larger building opposite. A firm has offered to challenge that situation, but it will take £800 to do so. The Minister has said that a procedure involving tribunals is available, but it is complicated and it costs money; it is a bit like saying that a judicial review is open to everyone—it is not if it costs money. There are thus some issues to address regarding fairness. Someone from a small engineering business has complained that her business is not eligible for the small business rate relief because it was registered only in June or July, and was not on the register on 1 April. I would like some of the £12.4 billion that the Government have wasted on their VAT cut to be put towards helping businesses that just missed the deadline by a couple of days, because that would have been more helpful. I would also like some of that VAT money to have helped another business, which told me that its rateable value was £15,500. That is £500 over the limit and thus the business is not eligible for any small business rate relief. I would have used some of the £12.4 billion to introduce a taper and help businesses that find themselves just over that limit. The couple involved have worked hard setting up this business, they employ people locally and they fear that the business will not be around much longer. The Government are always telling us about the initiatives that they have introduced for business, but I wish to read out a quote from a local business person in my constituency, who said that she had contacted the valuation office. She stated:""I am not going to hold my breath as we have had so many government leaflets, brochures and advertisements about how to save your livelihood during this credit crunch but to be truthful not a lot of practical help is available and the money spent on all that paper work and people"" could be better used. Those are not my words; they are the verdict of a local business woman on what the Government have done. Something on business rates would be practical, it would help cash flow and it would be much more use. The central point I wish to make to the Minister is that I do not think he or the Government have grasped the fact that many of these small businesses will not be around to pay business rates in future unless we do something now. We all understand the arguments for a sustainable tax take to pay for decent public services in the years to come, but unless we do something now the base of businesses that there will be to pay business rates in the future will be severely diminished. Something needs to be done urgently—even if the relief is only for a year or two—and I would have used some of that £12.4 billion that the Government wasted on that VAT cut. They did that when we already had discounts of 70 per cent. or so in our shops and businesses, as my hon. Friend the Member for St. Albans (Anne Main) pointed out to the Prime Minister and others very eloquently. Of course, I back the automatic small business rate relief and, as an Englishman, I find it preposterous that it is available in Wales but not to businesses in my constituency or throughout the whole of the United Kingdom. Let us have a bit of equity. I would like to know how the Welsh got this without our getting it, as would some of my local small businesses. My party has very practical proposals to ensure that local councils could keep any increase in business rates over and above what they were expecting to receive for a six-year period. That would give local councils an incentive to get more businesses into their area—there has not been enough incentive, and not enough of our local councils are hungry to attract extra businesses to their area. That proposal is a thoroughly good one, as is our proposal to allow councils to provide discounts on business rates, provided they could make up the income foregone or reduce costs in other areas. Those are practical measures; they are local solutions for local areas, and that is entirely sensible. Of course, these go alongside the proposals that we have made for a national loan guarantee scheme, cuts in corporation tax for small businesses, cutting the national insurance contributions for some of the smallest businesses, and deferring VAT bills. I have to express my own reservations, echoed by a business man in my constituency to whom I talked last week, about the loading of taxes on empty premises. What is the point of destroying our stock of business premises? It is the seedcorn for future jobs and that has not been a good move.