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Business Rates Revaluation

Volume 495: debated on Tuesday 7 July 2009

4. What impact assessment his Department has conducted in preparation for the 2010 business rates revaluation. (284340)

As business rates revaluation is a regular exercise every five years, no impact assessment is carried out in preparation. However, an impact assessment of the transitional arrangements for the 2010 business rates revaluation will be published shortly, alongside a consultation document setting out the Government’s proposals for a transitional relief scheme.

I am grateful to the Minister for that answer, and I am sure businesses will be grateful too. In a recent survey that I conducted in Beckenham, 46 per cent. of small businesses said that they needed help already with business rates. Given that the threshold for the supplementary business rate is only £50,000, and the effect that that will have on small businesses, does the Minister agree that a revision of that level should be included, otherwise the Government will be accused of sneakily increasing the burden on small businesses?

In fact, the small business rate relief scheme is extremely effective. Overall, the assistance to businesses has been about £260 million in the past year. That is something that we introduced alongside a range of other measures to assist businesses during these difficult economic times, very often in the teeth of opposition from the Conservative party.

No one in the House can be unaware of the difficulty of imposing additional costs on small businesses, in particular at this time. The other side of that, of course, is that businesses continue to make demands on local services, especially the emergency services—fire and police—and especially where premises may be empty for whatever reason. So whatever else happens in the present exercise, will the Minister ensure that while protecting the interests and the balance sheets of small companies, local authorities are properly compensated for any income forgone as a result of that effort to protect small businesses?

My hon. Friend makes an important point. Some £20 billion in business rates is collected and distributed to local authorities around the country. Given that the business rate increase is based on the retail prices index and that there was a spike from last September, we are introducing the transitional rate relief this year in order to ensure that there is not a big impact on businesses, while maintaining the income to the local authorities.

This year business rate tax rises were so unaffordable that Ministers have had to introduce an emergency rates deferral scheme. Next year’s revaluation could see thousands more struggling businesses hit again, just because of their location. If, in 2005, 700,000 properties saw their rateable values rise by 20 per cent. or more, how many businesses need to lose out in the 2010 revaluation before Ministers decide that their formula does more harm than good? If Ministers are not going to assess that impact, why not?

The hon. Lady made the same point in a recent debate. She still does not seem to understand that the system is based on legislation that was introduced by the previous Administration, and is based on a formula whereby business rates increase by the RPI. There is overall no greater collection of the business rates. It occurs to me that the hon. Lady has never said in any of her contributions what she would do. She knows how the system works, yet she comes up with nothing but empty accusations, and no plans whatever for the future.