Non-Domestic Rating (Designated Area) Regulations 2021

Lord Hain Excerpts

Wednesday 24th February 2021 Lords Chamber

[Lord Hain (Lab) [V]]

My Lords, I thank the Minister for his clear and cogent explanation. I realise that these are very technical regulations to designate, for the purposes of non-domestic rates, an area in England, including for the admirable objectives that he described, such as in Cleveland. However, I want to press him about the wider plight of our town centres, as I did last month. Their decline has been drastically accelerated by the Covid-19 crisis and the acceleration of online shopping.

It is no good leaving this to market forces. If that is the Conservative Government’s stance, we might as well say goodbye to town centres, which have for generations, if not centuries, been the centres of community and business life. Commercial and online pressures and changing lifestyles have been accelerated by the pandemic. Business rates and rents have a critical role to play here. Of course there are different exemptions, suspensions, and reliefs for business rates, but that is sticking plaster. We need a much more radical and comprehensive solution to this problem, or our town centres will simply die.

To keep town centres viable and vibrant, they must be supported with UK government non-domestic rates subsidies designated for local government and transferred through the Barnett formula to devolved Administrations as well. That support must be long term, if not permanent, to incentivise retail and hospitality outlets to locate in town centres. Currently, town centre businesses are being killed by unfair competition, high costs, high rents, and high business rates. This is not the fault of local authorities across the country. After savage Conservative government cuts during the past 10 years, of about 30% in many respects, local councils do not have the funding or the legal basis to subsidise town centre enterprises in the necessary way.

Crown post offices have closed, some backed into local branches of WHSmith, but how long will those WHSmith branches survive in our town centres? Local bank branches have also been rapidly disappearing. The Government need a completely new agenda. Business rates should be completely scrapped for microbusinesses in town centres, along with rents. Instead of Government Ministers passing the buck to local authorities, the Treasury should step in and take responsibility. Rejuvenating town centres would also reduce our carbon footprint and end the throwaway culture. The Government should promote a regeneration of repair skills and facilities in town centres through skills support packages.

That means ending our society’s obsession with low personal tax. If we want a decent quality of life in town centres, which everyone says they do, we have to be prepared to pay for it. It is not going to happen on its own: market forces and commercial pressures will not resolve this problem. Treasury funding, provided through local councils, is necessary to regenerate and revive our town centres, and I hope that the Minister will seriously take up this option and encourage the Government to act before our town centres die. In that context, I support this order, but I think that a wider, more fundamental strategy is needed.