Business Rates

I could not agree more. We all hoped that the Budget would contain some genuine measures to help businesses immediately, and the fact that it did not, in spite of the indications that the Minister provided on the day, was very disappointing—more so for businesses than for MPs. Ministers were clear about the objective of the business rate deferral scheme. In their press release, they said:""The Government announced today…that it will bring forward regulations to enable businesses to defer payment of 60 per cent. of the increase in their 2009-10 business rate bills until 2010-11 and 2011-12."" However, that scheme is already unravelling, because one thing that we can assess is that the promise to be able to defer 60 per cent. of the rise in business rates—Ministers' key claim—is not likely to be kept. Until the scheme is operational, businesses have to pay the full rise, and those that have already forfeited the right to pay in instalments cannot take part in the scheme at all. Businesses that have already struggled most with paying the higher rates and need most help to improve cash flow will have no access to the scheme. The logic is completely flawed. We do not know how things stand for businesses that are already subject to recovery action; perhaps the Minister can tell us whether those businesses will be eligible to participate in the scheme. As I am sure Members are aware, business rates are paid in 10 instalments, so businesses will have already paid 40 per cent. of their rise by July's payment this year, but Ministers have admitted in answers to my parliamentary questions that their regulations will not even be in place until the end of July. So, how long after that will it take local authorities to issue business rate bills with deferred rises? The local authority representatives to whom I have spoken tell me that it is unlikely that they will be able to go through that process in anything less than five to six weeks, and that is the most optimistic timetable. They need time to write to businesses; businesses need time to decide what to do, to get financial advice, to fill in the relevant form and send it back to the local authority; and local authority and billing agencies need time to change the details on their billing system and then to reissue their bills. By the time all that has taken place, we will almost certainly have passed the August payment date, so businesses will have already paid 50 per cent. of the rise and there will be no 60 per cent. left to defer. All that work, which we expect local authorities to do at the last minute, will take place in August, when most people are on annual leave. Again, the Minister might like to confirm our presumption that, as businesses gradually get around to claiming their deferrals, local authorities will end up with different businesses deferring different proportions, which will in turn lead to real complexity in billing, because the situation will depend on how quickly the business fills in the form and has it processed. Some will be able to claim 50 per cent. deferral, some 40 per cent., some 30 per cent. and so on. Ministers have met local authority representatives, so they must know that. Will Ministers therefore today finally say that they will bring forward their business rate deferral scheme regulations faster, so that they can really deliver on their 60 per cent. deferral promise? Will they promise all businesses that they will be able to defer 60 per cent. of their business rate rise? Even now, more than two months after the scheme was announced, we have very few details of how Ministers expect their scheme to work. For example, rebilling by local authorities for a second time will cost millions of pounds of taxpayers' money, but Ministers say that they do not know how much taxpayers' money will be spent on it. On 1 June, in a parliamentary question, I asked what I thought was a pretty straightforward question of the then Secretary of State for Communities and Local Government. I asked what estimate her Department had made of the cost to central Government and to local authorities in implementing the business rate deferral scheme, but I did not get a straightforward answer. I got a load of gobbledegook, telling me that I would have to wait until the impact statement had been prepared and the regulations laid, and that I would then get to see the impact statement. It did not answer the question at all.