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Small Business Rate Relief

Volume 483: debated on Tuesday 18 November 2008

6. What change there has been in the level of uptake of small business rate relief since the start of the current economic downturn. (236268)

The Government do not keep an ongoing account of the take-up rate of small business rate relief, but the latest reliable figures show that on 31 December 2006, some 392,000 businesses in England were claiming small business rate relief. The next figures will be available at the end of December this year.

I am grateful to my right hon. Friend for that answer. So many small businesses are suffering from cash-flow problems, but is the benefit not a source of help that is available now, waiting to be asked for? Does she agree that the Department could carry out a campaign to promote take-up of that relief, that there are good examples of local authorities already doing so, and that all of them should do so? Would she encourage all hon. Members to join in promoting take-up of that relief—even those who voted against setting it up in the first place?

My hon. Friend is absolutely right. There is a relief that helps more than 400,000 businesses, and in the current economic circumstances the smallest businesses are feeling the greatest strain. I wrote to all local authorities on 17 September, encouraging and urging them to start a take-up campaign for small businesses, and Members from all parts of the House will be delighted to join us in that. As my hon. Friend says, we introduced the measure in 2003, but at that time, I am afraid, the Opposition voted against it. In fact, the Leader of the Opposition voted against it on two separate occasions, but now, apparently, they are campaigning for it. They say one thing; they vote for another.

If the Secretary of State really wants to help small businesses, will she explain what possible logic there is in charging 100 per cent. business rates on empty commercial and retail properties at a time when those properties cannot be sold and cannot be let?

The hon. Gentleman raises a serious issue, and I am very aware of the impact on commercial and industrial properties. However, he has never mentioned the context of those empty property rates. There is a three-month full exemption for non-industrial premises, and a six-month full exemption for industrial premises. When we brought in the measure, we reduced the rates for charities and sports clubs to zero, and we have a done great deal to help on empty property rates. If the hon. Gentleman wants further rate reductions, the money will have to be found from somewhere. Obviously, we are aware of the pressures, we are keeping the issue under review and we are engaged with the property sector, but it is right that we establish the context of those empty property rates.

I hear what my right hon. Friend says and I warmly congratulate her. Will she talk to her colleagues in the Department for Business, Enterprise and Regulatory Reform about how post offices are now able to take up the small business rate relief, because now that we have recognised the value of sub-post offices, is it not right that we give all of them the opportunity to stay in business by ensuring that communities invest in them? That idea is one way they can do so.

That is an excellent idea from my hon. Friend, and, again, I am sure that Members, particularly on the Government Benches, will have welcomed the announcement about post offices which my right hon. Friend the Secretary of State for Work and Pensions made last week. I also think that local authorities can do much more to ensure that services are provided through the post office network, and we are already engaged with a number of local authorities that are seeking to maintain as a key anchor in their communities post offices that have played a very important role.

The right hon. Lady was very quick to dismiss the question from my hon. Friend the Member for North Thanet (Mr. Gale). Does she dismiss the concerns of the Government’s own Chief Whip, the Parliamentary Secretary to the Treasury, the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown), who labelled the charges on empty properties “destructive”? Indeed, 60 colleagues have called for them to be scrapped. That £1 billion tax increase on empty buildings at the beginning of a recession will cost jobs now and seriously hamper the recovery. Will the right hon. Lady next week advise the Prime Minister to undo the damage that he inflicted as Chancellor of the Exchequer?

The hon. Gentleman raises the issue of empty property rates, but he will know, as I do, that if we get rid of empty property rates, we will have to look for funding elsewhere. Very interestingly, we have seen a very dramatic development this morning: we have seen from the Leader of the Opposition—

The right hon. Lady should just stop digging. Her right hon. Friend the Chief Whip may have a different view. The Government’s policy on retrospective taxation states that backdating should take place only when it is fair, proportionate, necessary to protect revenue and in the public interest. In what way do the Government’s backdated business rates on ports meet those criteria? How can it be proportionate that the rates bill for one port operator alone has gone up from £50,000 to £1.25 million? How can it be fair that that backdated tax will cost 100,000 jobs throughout the United Kingdom? And how can it be in the public interest for such companies to be transferred to Rotterdam and Zeebrugge?

The hon. Gentleman will know that in the past 11 years the Government have done more to regenerate communities, support businesses and create jobs in this country than his Government ever did. He will also know that when empty property rates were brought in, a whole range of companies were deliberately leaving properties empty in order to find homes, sometimes for offshore funds; it was absolutely right to encourage those empty properties to be let.

The hon. Gentleman will also know that there is an issue about valuation in relation to ports and that we are seeking to take whatever steps we can to ensure that the impact on the port sector is measured and moderated. However, for the Conservative party to talk about building—