Non-Domestic Rating (Lists) (No. 2) Bill

Lord Truscott Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Monday 18th January 2021 Lords Chamber

[Lord Truscott (Ind Lab) [V]]

My Lords, I refer to the Non-Domestic Rating (Lists) (No. 2) Bill, and agree with much of what the noble Lord, Lord Naseby, just said. Although I welcome that the Bill postpones the revaluation of business rates until April 2023 to help firms affected by the pandemic, I cannot but think, as a number of noble Lords have expressed, that this is a missed opportunity for root-and-branch overhaul of the rating system, despite the Minister having pledged that there will be a review of the current system.

The economy is facing a double-dip recession and many businesses are under extreme financial pressure, as several noble Lords have said. Spending patterns are changing as more goods are bought online. High business rates are killing off our high street and, in these circumstances, a further hike in rates, even two years down the road, will sound the final death knell for many struggling businesses. The noble Lord, Lord Hain, described his experience with his local high street and the independent traders there that are under threat.

As the CBI pointed out in a recent report, the uniform business rate has risen by 44% over the last 30 years. The UBR would be lower if it had risen only in line with inflation. If the switch in indexation from RPI to CPI had happened earlier, it would have saved businesses £13 billion over a nine-year period. The UBR makes up a significant proportion of fixed costs for businesses—another reason any further increase should be delayed beyond 2023. The Government should look at rebasing the UBR, which would boost business investment and fuel economic growth at a crucial time for the UK’s economic recovery from Covid-19.

The CBI has made a number of recommendations and I hope the Minister will take them on board, particularly when the review gets fully under way. For example, for the remainder of the 2017 revaluation period, the Government should freeze the UBR. As a number of noble Lords have said, relief should continue to be targeted to support the most vulnerable businesses, so badly hit by the pandemic.

The Minister should ask himself, “Do we want to save our high streets and many smaller businesses, or not?” Currently, any business that can operate remotely will continue to do so, with implications for the economic health of our city and town centres. The incentives to cut staff and operate from smaller or with no office space will continue. Remote working can bring many benefits, especially if linked to more flexible working, but it should not lead to the shrinkage of our vibrant business sector and have the effect of turning our urban centres into ghost towns.