My Lords, Amendments 30, 32 and 35 are in my name in this group. They cover two issues. One is reform and the other is review. The reform amendment is Amendment 30 because, as many of us said at Second Reading, we are tinkering at the edges of business rate reform and change. What is needed is, in fact, what the Conservative manifesto promised in 2019—a fundamental review of the system. Amendment 30 asks for a review and reform of the non-domestic rateable value system between different parts of the retail sector. It focuses particularly on the retail sector.
In Amendment 30, paragraphs (a), (b) and (c) of proposed new subsection (3) identify the different sectors: single-shop businesses in high streets,
“chain stores with multiple premises in city centres and out-of-centre shopping malls”
and “mainly online operations” by global businesses, which do not pay their fair share of taxation in any case and seem to be taxed very lightly in business rates compared to the sectors mentioned in proposed new paragraphs (a) and (b).
I would like the Government to agree to the amendment, as they already recognise that the system is not fair and equitable. For example, the current system acknowledges that small businesses are overtaxed by the existing system of assessment and responds to that by creating a plethora of business rate reliefs, such as small business rate relief, charitable relief and
so on. The Treasury funds those reliefs, but how much better would it be if the system was designed from the outset to be more equitable between different parts of the retail sector? It would encourage more activity on our high streets, which benefits local businesses and the communities that they serve, and would also extract more money from those who have most and who have avoided taxation the best—global online retail businesses.
At this point I shall say, for brevity, that Amendment 36 in the name of the noble Lord, Lord Thurlow, is an excellent expression of what I have just tried to achieve with my Amendment 30, so I obviously totally support that and look forward to the noble Lord describing exactly how it will be achieved.
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Amendments 32 and 35 in my name are asking for reviews of the impact of these changes. On Amendment 32, as I raised at Second Reading, I am concerned that the impact of these changes may be a fall in business rate income, which would impact on local authorities’ funding, because business rates income transfers to local government. At Second Reading, the Minister confirmed that there would be new-burdens funding for the changes described in the Bill; however, it was not confirmed that there would be compensation for loss of income due to reduction in business rate income. Local authorities are on the edge of their financial viability and, if there is a loss of business rate income, it will significantly harm local authorities. I have outlined other impacts in that amendment that I would like to see reviewed, but I will take them as read, in the interests of brevity.
The final review I ask for, in Amendment 35, is simply for an impact assessment. Do these changes actually incentivise improvements to business premises? Will business benefit from more frequent valuations? The amendment asks the question about devolving more powers over business rates to local authorities. These are important changes. Reform and review are at the heart of the amendments, and I look forward to hearing how the Minister will respond, especially to Amendment 36 in the name of the noble Lord, Lord Thurlow.