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Business Rates

Volume 613: debated on Tuesday 19 July 2016

As my hon. Friend knows, in Budget 2016 we announced the biggest ever cut in business rates in England, worth £6.7 billion over the next five years. The package cuts business rates for all ratepayers, and 600,000 of the smallest businesses will not have to pay business rates again. The Government are also looking to modernise the administration of the tax to make sure that it is fit for the 21st century.

I congratulate my hon. Friend on her new role. Have the Government decided whether car park business rates will be devolved to local authorities? That would offer a significant reduction in council overheads, which could enable Wiltshire Council in my constituency to reduce parking fees and improve the economies of our local market towns.

I congratulate my hon. Friend on taking such a close interest in what will boost her local economy. The Government have announced that they will devolve 100% of business rate revenues to local government. The details are subject to consultation, and the consultation document was published by the Department for Communities and Local Government earlier this month. She and her local council may well want to contribute to that consultation, and she may want to make the point that she made so well just now.

Some of the richest areas in the country find it easiest to raise money through the business rate system. If we are not to perpetuate poverty and the gap between rich and poor parts of the country, do not the Government, if they are going to proceed with this, have to make sure that there are proper balancing mechanisms? Otherwise, the problems that we have seen in so many parts of the country, which feel completely forgotten and left aside, will be perpetuated for future generations.

I am very well aware of the point that the hon. Gentleman makes. In my previous role, I had responsibility for the public health grant, and those points were made in that context on several occasions. We have an open consultation on business rates retention. We are aware of that issue, and the existing system of redistribution will be continued in some form. Obviously, that is something at which we will look closely.

The business rates system sometimes interacts with the planning system to leave premises empty, but incurring tax. Will the Government work to ensure that councils are appropriately incentivised to ensure that premises are productively occupied so that business owners have a chance of paying the tax they incur?

I hear the point that my hon. Friend makes. That is clearly something to which further consideration will be given.

Any help that small businesses get from business rates reform will be very welcome in my constituency of Huddersfield, but that does not outbalance the fact that my university and my manufacturing businesses have been hard hit by Brexit. I know that the Minister is not one of the guilty Brexiters, but what will the Government do to help manufacturing industry and universities so hard hit?

The Chancellor has already made a number of comments about how we will deal with and address this situation, and more will clearly be said in the autumn. It is important that we recognise that, while we undoubtedly face some risks and have to look to manage them, we must also seize the opportunities we can take from the situation we are in.

To return to the point about business rates, taking 600,000 of the very smallest businesses out of business rates altogether is a good thing. It has not taken effect yet. It is important to make it clear that although that has been announced, it has yet to take effect. We all have a job to do in the spring to make sure that our local businesses get the maximum benefit.