Business Rates

Lord Fox Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Livermore (Lab)]

I respectfully say to the noble Baroness that she must take what has been announced this week in the round with what was announced in the Budget. We spent £4.3 billion supporting exactly the type of businesses the noble Baroness mentions. We have expanded the supporting small business scheme to provide specific support to those who are currently eligible for the 40% RHL relief. Around one in three businesses continues to benefit from small business rates relief and does not pay anything at all. We have extended the second property grace period to support small businesses as they grow. So, I do not accept that we are not supporting those businesses. But equally, I absolutely understand the challenges that many retail, hospitality and leisure businesses are facing, which is exactly why, later this year, the Government will bring forward a high street strategy and work with businesses and representative bodies, looking at what more the Government can do to support our high streets.

[Lord Fox (LD)]

My Lords, I am sure the Minister will agree that one of the things that will drive growth is consumer confidence. It is very hard for consumers to be confident when they see their high streets putting up shutters and “closed” signs. The Minister also talked about changed behaviour and the driving of online sales. Beneath that is a real inequity, in that the out-of-town warehouses which have been driving those digital sales have a rates square foot rate about a tenth, if not less, of that of the high street stores with which they compete. When the Minister is having this review, can he review not only the high streets but how the out-of-town warehouses are eroding those high streets?

[Lord Livermore (Lab)]

I agree with the noble Lord on the importance of consumer confidence—and six interest rate cuts since the election is very important to bolstering that consumer confidence. It is the fastest pace of interest rate cuts for 17 years, and the action we took in the Budget to further cut inflation and bear down on borrowing will support the Bank of England in the work it is doing to reduce interest rates. I also agree with what the noble Lord says about out-of-town online giants, and that is why we are reforming the business rates system. As I said, we are introducing permanently lower tax rates for over 750,000 retail, hospitality and leisure properties, and we are funding that with higher rates on the most valuable properties, including the warehouses used by online giants. But I absolutely understand what the noble Lord is saying, and I am more than happy to look at that as part of the work to develop the high street strategy.

--- Later in debate ---

[Lord Livermore (Lab)]

I agree with the first thing the noble Baroness said, on the importance of the sector and jobs; I did not agree with anything else she said. She said that we have a lack of understanding: I just wonder what she would have done. We spent £4.3 billion in the Budget supporting these businesses: she did not acknowledge that. She did not acknowledge that the previous Government, whom she presumably supported, would have ended Covid relief overnight and had absolutely no plans to extend it, as we have. She said she would abolish business rates. Well, she had 14usb years to do that, and she did not. I wonder how she would now fund the abolition of business rates, and what other services she would cut to do that.

The noble Baroness mentioned airlines. The Government have redesigned the 2023 transitional relief scheme to provide generous support for large properties such as airports and those in other industrial strategy sectors. That is extremely important. She mentioned hotels, and I have answered that question already. As I say, I fundamentally disagree with her. The Government she supported would have ended this relief overnight; we have extended it.

[Lord Fox (LD)]

My Lords, following the moderately good reception to my last question, I am going to push my luck. Following on from the from the noble Lord, Lord Forbes, when this review is under way, can the Treasury review a commercial landowner levy rather than a straight business rate? That does not penalise investment, and it puts the onus on the people who actually own the land. If the Minister is not 100% au fait with the Liberal Democrat policy on this, I would be very happy to arrange a briefing for him and colleagues.

[Lord Livermore (Lab)]

I may not have read all the Liberal Democrat policy documents as thoroughly as perhaps I should have. I cannot commit the review to considering specific things right now, but I am more than happy to take those thoughts back to the Treasury.