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Business Rates Hardship Fund

Volume 783: debated on Wednesday 19 July 2017


Asked by

To ask Her Majesty’s Government what action they are taking to ensure that those businesses eligible for support from the business rates hardship fund receive that support without delay.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest, as a member of my family works in the retail trade.

My Lords, the Government confirmed local authority allocations for the discretionary relief scheme in April 2017. This enabled councils to press on with implementing their local schemes. We have been clear that we expect authorities to provide this support to hard-pressed businesses without delay. Ministers have written to council leaders clearly setting out this expectation. Some authorities have already issued reduced bills, and we continue to urge other councils to follow suit as quickly as possible.

My Lords, is it not a fact that very few councils have implemented this? Here we are, a third of the way through the year, and that is having a huge effect on cash flow. In certain areas, the bailiffs are going in. Against that background, what further action will Her Majesty’s Government take to make sure that this all happens in the next month? Surely, that is not asking too much. After all, if we believe that the high street is vital to our economy, perhaps we should look further and reflect that it is no good for this country to have the highest business rates in Europe. If we are going to have successful small businesses and a successful high street, surely we have to go down the league table in that regard.

My Lords, my noble friend is absolutely right about the importance of the high street. The Chancellor announced £435 million-worth of relief in the Budget and, as I have indicated, allocations have been made to local councils. We are certainly looking to them to implement this; some have set a good example—such as Leeds and Haringey—and we are looking to others to do the same. We will certainly consider what further action we need to take if they do not comply with our instructions.

My Lords, will the Minister explain why the means of claiming small business rates relief is often hidden away in obscure parts of billing authority websites? Furthermore, given the need for an accessible redress system, when will the check, challenge and appeal process for online rating appeals move beyond the beta test stage?

My Lords, the noble Earl is right about the importance of small business and rural rate relief, and we are very clear about that. As part of the £435 million package we have set out how that is to operate, and we are looking to local councils to implement it—and they are doing do. He is absolutely right also about the importance of the check, challenge and appeal system operated by the Valuation Office Agency, and we are in close contact with it to make sure that that is working effectively.

My Lords, I refer the House to my interests in the register. Does the Minister agree that it is time to fundamentally reform the business rates system to support our high streets? As more and more online shopping develops, we need a fairer system of business taxation that takes this into account.

My Lords, the noble Lord is right about the importance of ensuring that we have a fair system. We will be looking at possible reforms of the business rates systems during the course of this Parliament. But in the meantime, as the noble Lord has correctly pressed us, it is important that relief schemes are operating as effectively as they should be. That is why I once again appeal to noble Lords to, where necessary, contact their own local authorities and put pressure on them to make sure that the relief that has already been allocated is passed on to businesses.

Could my noble friend put a greater emphasis on this? We need this change now and cannot wait for it, because otherwise the high street will die.

My Lords, my noble friend is right, and we are going to look at possible reforms to the rating system during this Parliament. In the meantime, the Government have been very clear—in 2016 through a package of £9 billion-worth of relief, and again in 2017, with £435 million-worth of relief—on how we can ensure that assistance goes to businesses on our hard-pressed high streets. Once again, I encourage local authorities to pass that money on.

Would the Minister confirm that one problem with implementing the business rates relief is with the IT software provided to local councils by private suppliers? Secondly, he will be aware that this grant system is over a four-year funding regime that tapers towards the end of that period. Is he willing for there to be flexibility in the year-on-year funding—in other words, if there is underspend one year to push it over into the next year—so that businesses do not lose out?

My Lords, the noble Baroness raises a variety of issues. The issue about software relates to just the small business rate relief; it would not apply to the discretionary relief so is not an issue there. My honourable friend the Minister, Marcus Jones, contacted software providers yesterday to indicate that we expect them to ensure that bills are reissued by 21 August. In relation to points made earlier about a further month, I think that is fair. On the issue about the system in relation to the other relief package, clearly it is important that that money is passed on. We seek to ensure that that is done. I will write to her about flexibility, but that seems a fair point within the package. At the moment, the important point is that local authorities have the allocations and they should pass on that money.

My Lords, would the Minister comment on the cultural consequences of the 275 towns that will lose their bookshops—sometimes their only bookshop?

My Lords, the discretionary relief scheme is just that: it is discretionary for local authorities to come up with their own criteria. We want them to be innovative. I have great personal sympathy with the point that the noble Baroness made. I am a great user of independent bookshops. One can think of many areas where bookshops are vital to a town, but that is something for the local authority to respond to. They can do that by being creative within their own scheme.

My Lords, as the Clock seems to have stopped, I will ask this. While welcoming the relief on business rates, could my noble friend recognise that companies such as Amazon use the high street as a shop window? They themselves pay no or limited tax. Do we not need to look radically at some sort of tax on internet sales so those on the high street can compete fairly?

As always, my noble friend makes a valid point. I also noticed that the Clock seems to have stopped. That is often the case when I am answering Questions. In relation to his valid point, I restate that we will look during the course of this Parliament at possible reforms to the business rate system.