My Lords, Amendment 29 was tabled just to probe the possibility of reducing the threshold for small business rate relief, particularly in consideration of our high streets. We know that business rates remain one of the largest fixed costs for retailers and that they fundamentally impact business planning and investment decisions; for example, the convenience sector’s business rates liabilities are over £274 million, despite the small business rate relief. We also know that retailers are facing a particularly difficult time at the moment: we have increased commodity prices, skyrocketing energy bills and structural changes to the labour market—there is an awful lot going on and a lot of instability.
We are concerned that the current revaluation of business rates, which was implemented in April this year, will hit smaller high street stores in particular. They struggled during the pandemic and afterwards, and, combining that with a winter ahead with higher energy bills, we have particular concerns. We have called for short-term support through an increase in the threshold for the small business rate relief. We suggested that the current threshold of £15,000 be increased to £20,000 in order to give SMEs a discount on their business rate bill for 2023-24.
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I am aware that, in the letter that the Minister sent to noble Lords after Second Reading, she set out in quite some detail the action around small business rate relief and the additional support. When we look at reducing the amount of rates that businesses pay, we need to look at the impact on local government and
its resources. We need to look at this in the round. So we welcome the action that has been taken. We think that more action needs to be taken, but we must not forget the impact on local authorities.
We also think that the reduction in business relief should be funded by an increase in the digital services tax, which is charged on the global revenues of the global tech giants—basically, the online shopping argument against the high street argument, which we had at some length at Second Reading and which I am sure we will continue to have. In her letter, the Minister said that the Government have increased the total business rates bills for large distribution warehouses to reflect the growth of the online sales sector. Again, we welcome that, but we feel that we need to do more to resolve the imbalance between the amount of taxes paid online and in store.
I will be brief because it would be nice to finish, although a vote is coming. We very much support Amendment 31 in the name of the noble Lord, Lord Shipley. The hospitality sector has clearly laid out its particular concerns about how it may not come off so well from the improvement relief, the material changes to circumstances and the duty to notify. I am sure that the noble Lord, Lord Shipley, will mention them, so I beg to move.