I thank my hon. Friend for that intervention, with which I agree entirely. I will come on to that issue later and believe that it is placing a major burden on businesses. We need action not at another time and another place, but now. If we delay until 2017, changes in values will be far greater and create bigger swings in liabilities, which will be far more difficult for businesses to cope with.
This leads me on to the fact that any property tax requires frequent and regular revaluations to ensure its acceptability and fairness. The five-yearly reviews that have been in place for more than 20 years are well understood and provide a degree of certainty. A break in that precedent creates uncertainty. In future, people and businesses will not know for sure when or whether a review will take place. The reason for having regular reviews of the rating list is that property values, in relative terms, change over time. Rents in some sectors
and in some locations will rise, while those in others will fall. It is important that the rating system has an in-built review structure that reflects the dynamic and ever-changing nature of the property marketplace. In this way we can be sure that the tax burden is spread fairly so that those with the broadest shoulders pay the most and those in more challenging locations and properties pay less. Liz Peace, chief executive of the British Property Federation, sums up the position well:
“A revaluation should shift the burden from those who are suffering to those who are prospering.”
There is a worry that the proposed freeze means that those in more lucrative locations will benefit and those in hard-hit areas will suffer.
I am particularly concerned about the possible effect of the postponement on the retail sector and on town centres. The Government have done a lot of good work in highlighting the problems faced by the high street and, working with Mary Portas, they are putting in place measures to tackle these challenges. Lowestoft in my constituency is a Portas pilot town, and the town team are setting about their work with relish and enthusiasm. It is important that those of us in this place provide the framework through which such work in towns across the country can come to fruition. I fear that the proposed postponement might undo this good work. In Lowestoft, prime rents fell by 40% between 2008 and 2012. It is important that rates are realistic and up to date so as to attract investment back into the town centre.
The retail sector pays a significant proportion of all business rates—more than a quarter, at 28%. On average, 14.6% of retail units across the country are vacant. This is due to a variety of reasons, one of which is high rates. Mary Portas has said that high rates are a deterrent to investment in town centres. It needs to be remembered that the retail sector is the UK’s biggest private sector employer, providing crucial jobs to 1 million people in the 16-to-24 age group. There is great concern that another hike in rates will lead to fewer chances of jobs, result in less investment in the fabric of our town centres, and create a more troubled high street.
Finally, I turn to the backlog of rates appeals, which are placing a brake on private sector investment and are a significant strain on the finances of businesses. It is estimated that there are 241,710 appeals outstanding against the 2010 list, and this equates to £1.8 billion owed to business. The number of appeals being carried out at the end of the second year of the 2010 list is 74% higher compared with the same point in the 2005 list. Improved systems and processes must be put in place to clear the backlog and to ensure that the problem does not recur. An uncalled-for and significant burden is being placed on businesses in difficult times, and it must be removed with full haste. Businesses must not shoulder unnecessary burdens as a result of these bureaucratic hold-ups within public bodies.
I support the direction of travel of the Bill and I shall vote for it this evening. However, the proposal to postpone the rates review requires further scrutiny to ensure that it does not have unintended consequences for, and a negative impact on, many businesses across the country. The evidence on which the proposal has been made should be published and scrutinised as soon as possible, and it needs to be very carefully considered in Committee.
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