Business Rates

As the hon. Lady will know, there are different methods of calculating what the increases will be in pensions and other areas. As she knows, under existing legislation business rates are adjusted every April in line with the retail prices index for the previous September, but I should point out that in the Budget the Chancellor forecast that RPI inflation would fall to minus 3 per cent. by September 2009. The impact of uprating if RPI is negative will obviously be to reduce total business rates in cash terms in 2010-11. We must understand all the implications of linking to RPI. However, that is the point at which we can consider action that Government could take—as we did—in recognition of the spike in inflation that occurred in September. That is exactly why we introduced the deferral scheme, which will allow business rate payers in England to defer around £600 million for 1.6 million properties and around 3 per cent. of the 5 per cent. increase in 2010-11 and 2011-12. The Opposition also referred to the plans for the 2010 business rates revaluation. As I said earlier, regular revaluations are an important part of the ratings system because they maintain fairness between all taxpayers. Rental values provide the basis of rateable value, so revaluation ensures that each business contributes, based on up-to-date information. The current rating list dates from 1 April 2005, based on the property market at 1 April 2003. The next revaluation will take place from April 2010, based on rental values at 1 April 2008. However, although the property market has changed since 1 April 2008, the important protection for business is that the revaluation is not intended to raise extra revenue because the overall national multiplier is set to ensure that the average business rate stays the same, allowing change only for inflation. I think that the hon. Member for North Cornwall (Dan Rogerson), whose attention I am trying to get—he is ignoring me; okay, fine—asked about that. Some rate bills rise and some fall after revaluation, but the average national bill changes only with the rate of inflation. That is how the revaluation would work.