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Business Rate Revaluation

Volume 504: debated on Tuesday 26 January 2010

1. Which types of business he expects to experience the highest increase in rateable values as a result of the April 2010 business rate revaluation. (312948)

Business rates revaluation is carried out by the Valuation Office Agency, which is independent of Ministers. It will not raise a single extra penny for Government. Oil and gas producing properties, power generators and major sports clubs that have improved their trading position or invested significantly in their grounds are expected to see the largest increases in average rateable values. When the occupier of a property is a charity—for example, in the case of lifeboat stations—and might also see large increases, that occupier is protected by a mandatory 80 per cent. relief from business rates on any property that is occupied for charitable purposes. Local authorities may increase that relief to 100 per cent.

Local business know best how to create local growth, yet pubs and independent petrol stations in my constituency feel that RV rules are rigid, out of date and wrong. Does the Secretary of State not agree with the Labour Local Government Association group that business rates should be localised?

The hon. Lady raises questions about how valuations are carried out. I would be very interested to learn from her or from the Opposition whether they agree with me that having a valuation office that takes decisions on rateable values independent of Ministers or local councillors is the better way to do it. I would certainly resist any proposals that the rateable values of businesses in her constituency or mine be set at the whim of local councillors.

Independent petrol station retailers in my constituency are also facing huge increases in their business rates from 1 April. Although I agree with the need for an independent valuer, there appears to be no right of appeal against these revaluations until they are put in place from 1 April. Will my right hon. Friend look at that again and provide some form of redress for these retailers?

There is a right of appeal. What is more, I draw my hon. Friend’s attention to the £2 billion transitional scheme that has been put in place. It is always the case, every five years, that the independent revaluation of business rates produces winners and losers. That is why we have a transitional relief scheme that means that the impact on rates bills can be no more than 11 per cent. next year and just 3.5 per cent. for small businesses. There is protection alongside the ability to appeal that my hon. Friend seeks.

The Secretary of State faces a very clear choice over the 2010 revaluation: he can either ditch it and allow all business properties to enjoy a small inflation-based decrease in property rates or push ahead with it, which will mean that four out of 10 business properties will see a rates rise. Many of those properties will belong to companies that struggled to survive the recession. What is more important and what is fairer—sticking with the revaluation or supporting these companies?

I am surprised if that is the position of those on the Opposition Front Bench—the hon. Lady is proposing to impose a rates increase on the 60 per cent. of businesses in this country that are set to have a rates reduction. I think that that policy should be much more widely known. Those businesses that expect to see their rates bills fall and to be helped in a recession will be amazed to find that the Opposition are proposing a rates increase.

Will the Secretary of State consider the position of the composting industry? Higher environmental standards have meant more indoor composting and therefore more buildings. Is there not a case for switching the valuation to one that is similar to the system for landfill sites, whereby valuation is based on tonnage rather than property?

I hear what my hon. Friend is saying, but I repeat to the House the point that I made earlier. There is a real choice for the House as a whole: either the Valuation Office Agency acts independently of Ministers—there is considerable case law over 100 years for how rateable values are to be established—or we move to a system whereby, with respect, the relatively micro-level choices that my hon. Friend sets out become decisions for Ministers. I think we would be worse off if the system of determining rateable values were handed to political ministerial control. With all the ups and downs of it and all the problems that arise with every revaluation, we are better off with an independent system than we would be if we brought the system under ministerial control.