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Unified Business Rate

Volume 113: debated on Wednesday 1 April 1987

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asked the Secretary of State for the Environment what recent representations he has received from small businesses on his proposal for a unified business rate as a replacement for the commercial rate.

The Parliamentary Under-Secretary of State for the Environment
(Mr. Christopher Chope)

I continue to receive representations both for and against the uniform non-domestic rate.

Is my hon. Friend aware that the concern of small businesses represented by the National Federation of Self-Employed and Small Businesses, especially those in low-rated areas, is that they may be required to pay more towards the cost of local government services under the unified business rate? Will he confirm that there will be a transitional period for businesses to adjust to the new rate, and state how long that period will be?

I cannot say exactly how long the transitional period will be, although there certainly will be such a period, but the major benefit for small businesses will be the knowledge that after the transitional period it will be impossible for the rates to rise by more than the rate of inflation.

Is the Minister aware of the widespread feeling that if Ministers wish to make the business rating system fairer they should go for improvements in the rate support grant system and for an urgent revaluation? Is he aware that figures further given by the Minister for Local Government show that business rates will rise by 31 per cent. in Westminster and by 28 per cent. in Hammersmith and Fulham, that business rates will be forced up by the Conservative party by 33 per cent. in Ealing, by 25 per cent. in the Prime Minister's area of Barnet and by no less than 57 per cent in the Minister's former borough of Wandsworth? Does he agree that The Economist was right when it said:

"The road to Mrs. Thatcher's proposed poll tax"—
and to the unified business rate—
"is one paved with banana skins and leading nowhere"?

Not at all. It is a bit rich to hear those statistics given by the hon. Gentleman, because they relate to the year 1986–87 and, as I understand it, he is supporting the fact that in Ealing in one year the rates have gone up by 65 per cent., an increase of £260 per employee for one particular firm in Ealing.

Does my hon. Friend agree that one thing that small businesses cannot tolerate is the rate increase which is erratic and unpredictable? Is he aware that in Leicester in local election year the rates go up by 5 per cent. and that the following year the council does not care and the sky's the limit? No local or small business can possibly tolerate such a situation.

I agree with my hon. and learned Friend wholeheartedly. That is the major benefit that will flow from the national non-domestic rate.