Business Rate Supplements Bill

It is perhaps appropriate to repeat and to put on the record my interests as a director of three businesses in the north-east of England, all of which pay far too much in business rates, which will be a recurring theme that I shall come on to. The first amendment, we hope, sets the tone for our argument in relation to the Bill. The amendment allows the levying authority power to impose business rate discount where the levying authority has "sufficient local income". We have made a flying start, because that is not on the Marshalled List, which actually states "low income". The intended wording is, ""local income or avoided costs in order to fund it in full"." As well as having the power to increase and to impose a business rate supplement of up to 2 per cent on local businesses, there should in certain circumstances be an opportunity to have a mirroring capability to reduce business rates in a given district. The arguments for this are clear, in that reducing business rates would make that location more attractive to potential investors, retailers and businesses. Bringing those businesses into the area would help. In her Second Reading speech, the Minister welcomed this Bill, saying that it was another power for the local authority toolkit to build strong foundations for the future— we understand that perspective—and that, even in this time of very difficult economic circumstances, it was right to do so, because the Bill was about releasing investment for mutual benefit across the community. If the intentions behind the Bill are really to help local businesses and to invest in local communities at this time, why not include an enabling power to levy a business rate discount? I am not sure whether "levy a business rate discount" is the right term, but for want of a better one, we shall leave it as it stands. Under the Local Government Act 2003, local authorities already have a discretionary power to levy council tax discounts, which they fund. We advocate the introduction of a similar discretion to offer reduced business rates in whatever form local authorities choose, as long as those reductions can be funded from local income or avoided costs. This would allow councils to apply local solutions to local problems, and would give them greater flexibility. Authorities would be able to work together to fund it, whereby the billing authority would not have to bear all the cost. This is important, because we want to reward businesses and thereby encourage and stimulate business growth and prosperity, particularly as we go through very difficult economic times. This would be part of the new financial framework to give local authorities a share in local growth, as was mentioned in the Green Paper. There is concern, because economic crises and the lack of incentives to encourage business mean that landlords are being deterred from converting buildings to business use. In rural areas, farmers are not choosing to convert redundant agricultural buildings because they are likely to face significant empty property rates for the period when they take over as tenants. We will come back to the issue of empty property rates later at the appropriate point in our amendments, and to the general revaluations taking place, particularly in ports, but also generally among businesses at a very difficult time. We ask the Minister to consider this proposal to help local communities and businesses in need, and we do so recognising that we are asking not for exceptional treatment but for something very much in line with other aspects of local government finance.