Business Rates: Small Retail Businesses
Rachael Maskell Excerpts(6 years, 1 month ago)
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Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am privileged to follow the emotional and sensitive debate secured by my hon. Friend the Member for Eddisbury (Antoinette Sandbach). I sometimes wish the public could see more of such debates, where sensitive subjects are discussed so constructively on a completely apolitical, non-partisan basis. I congratulate my hon. Friend.
Madam Deputy Speaker, I am grateful to you and Mr Speaker for scheduling this important Adjournment debate on reforming the business rates system for small retail businesses. I am particularly grateful to the Paymaster General and Financial Secretary to the Treasury, my right hon. Friend the Member for Central Devon (Mel Stride) for being here to answer this debate at such a late hour, when I am sure he would much rather be at home with his family.
I am quite sure that right hon. and hon. Members from both sides of the House will agree with me when I say that protecting our country’s small businesses is of paramount importance. There are more than 5.7 million small and medium-sized enterprises in the UK, and we must recognise their importance to the local economies of all our constituencies in providing much-needed jobs for our constituents.
I have been working closely with the British Independent Retailers Association and with many businesses in my constituency to promote their business rates reform proposals. It is an eminently sensible idea for the so-called small business rate relief, which has a £12,000 threshold and has to be claimed, to be replaced by an allowance which would be automatic. That would benefit the huge majority of the small businesses that currently qualify for the small business rate relief. Retailers pay nearly a quarter of the collective rates bill, amounting to a staggering £7 billion a year. They pay far more than those in any other industry. The present system does not value business rates on the basis of business profitability. That unfortunately results in a system that fails to place the burden of taxation on the businesses that are most able to pay.
The national decline of the British high street is a worrying trend. More than 8,000 shops have closed over the last 18 months, and one in eight high-street shop units in England and Wales now stands empty. Large shopping centres away from town centres qualify for much lower rates than smaller retailers on our high streets, owing to their peripheral locations. That, of course, does not take into account the significantly higher turnover of retailers such as the “big four” supermarkets.
Rachael Maskell
I am grateful to the hon. Gentleman, who is making an excellent speech. In York, there are 47 empty units in the centre of our city, partly because of high valuation rates. Offshore landlords are more concerned with their investments than the revenue from the rentals, so they keep pushing up the rents. Does the hon. Gentleman agree that the whole system needs to change if order is to be restored?
Sir Geoffrey Clifton-Brown
Yes. The whole thrust of my speech is that we shall ultimately need to reform the rates system, but it will take time. The Government have to be very careful to guard the huge amount of revenue that they gain from the rates in any change that they make. I am sure that my right hon. Friend the Financial Secretary will have something to say about my proposals in that respect.
I have a problem in the Cotswolds. The rents are very high, which influences the rateable value. It takes time to deal with that when there are a number of empty units, such as the ones in York that the hon. Lady mentioned. When the rents are lowered the rateable values follow, but the district valuers are, of course, reluctant to lower the rateable values, because they do not want to lose revenue. That problem is increasing, as I shall explain shortly. Offline businesses, IT businesses and so on, do not need premises as large as those required by some of the businesses in the hon. Lady’s constituency. For example, furniture shops, bed shops and cycle shops need large premises, which inevitably means large rateable values, but they do not necessarily have the turnover to match those rateable values. The ability to pay is not necessarily reflected in the rates that must be paid. However, I sympathise with the hon. Lady.
The Financial Secretary to the Treasury (Mel Stride)
Madam Deputy Speaker, may I say what a pleasure it is to see you in the Chair after the recess? It is also a pleasure to realise that I have an hour and 16 minutes in which to address my response to my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), but I may cut it down just a little bit to please the House.
I thank my hon. Friend for bringing this important debate to the House tonight. It is entirely characteristic of him that such a debate is in his name, because throughout his parliamentary career he has been a strong advocate of business both across the country and, importantly, in his constituency. He was right to highlight in his opening remarks the sheer size and importance of our small business community—there are 5.7 million small businesses, a figure that he cited—and the recent growth that we have had under the coalition Government and this Government. He has worked closely with the British Independent Retailers Association on various thoughts and proposals, some of which he put forward this evening and to which I shall respond in a moment.
My hon. Friend is right that business rates are an important tax. When we consulted on business rates back in 2015 and considered the various alternatives, several different suggestions were made, such as turnover taxes, taxes on gross value added and so on. Inevitably, with every kind of measure or metric that one focused on, they had their own particular drawbacks and complexities and so on. The conclusion that was reached at the time was that business rates were a stable tax that is difficult to avoid because property is static by definition. Of course, as my hon. Friend also rightly pointed out, business rates raise around £25 billion a year, which is a significant contribution to our public services and funds, in turn, our doctors, nurses, policemen and policewomen and so on.
The Government recognise that business rates represent a high pressure on small businesses, particularly for high street retailers. Rates are a fixed cost that cannot be avoided, irrespective of whether a business is profitable or otherwise, which is why we have undertaken a series of important measures. In the 2016 Budget, we made 100% small business rate relief permanent, at that time increasing the threshold for the relief and taking 655,000 of the smallest businesses out of business rates altogether. We also increased the threshold for the standard multiplier, taking 250,000 properties, including most high street shops, out of the higher rate of business rates.
However, that is not all. Following the most recent property revaluation in 2017, we introduced a £3.6 billion transitional relief scheme to cap and phase in bill increases. Additionally, at spring Budget 2017, we announced an extra £435 million to support those businesses facing the steepest increases in bills, including £110 million to support 16,000 small businesses losing small business rate relief or rural rate relief to limit increases in their bills to the greater of £600 a year or the real-terms transitional relief cap for small businesses in each year. We also provided local authorities with £300 million of funding for discretionary relief to support individual cases in their local area.
In parallel to all that, we have taken significant steps to ensure the fairness of the business rates system as a whole. That is why, at spring Budget 2017, the Chancellor announced that we would reform the revaluation process to make it fairer. I am pleased to say that we have delivered on that by increasing the frequency of business rates revaluations from every five years to every three years, following the next revaluation. That is an important point in the context of what my hon. Friend said about the difference in the rates being paid by the out-of-town store and by retailers on the high street. If we can have more frequent revaluations, as rateable values on the high street perhaps fall, we can more quickly pass on the benefit of that within the system.
Rachael Maskell
Does the Minister recognise that inequality exists between property size and turnover and that online businesses do not have the same huge valuations as retailers on the high street? Therefore, there is a complete dissociation between the success of a business and its ability to pay under a rateable system, whether that system is based on turnover or profitability, as opposed to a system that is dependent on an external landlord and the rents that they are charging for their property.
Mel Stride
The hon. Lady will probably be aware of the Chancellor’s speech at our recent party conference, in which he spoke quite strongly about the importance of a level playing field for online businesses that derive value in the United Kingdom and end up paying very little tax and about the international tax approach that we may look at taking unilaterally as a consequence. The most important thing overall is that the Government recognise that when it comes to high streets and the smaller retailers to which the hon. Lady refers, we should take measures to reduce the burden of rates, particularly among smaller businesses, in the way that I have described this evening. That makes bills fairer for everyone, as they more closely reflect the current rental values and relative changes in rents. To ensure that ratepayers benefit from this change at the earliest point, the spring statement 2018 included an announcement that the next revaluation would be brought forward by one year to 2021.
Before I address some of the specific points raised by my hon. Friend, it is worth highlighting that, at autumn budget 2017, we brought forward the planned switch in the indexation of business rates from RPI to CPI by two years. This switch is worth £2.3 billion over five years, and the move to CPI is worth £4.1 billion in total by 2023. So once more, the Government are making a significant investment to recognise the pressures that rates introduce.
My hon. Friend raised the specific issue—
High Speed 2
Rachael Maskell Excerpts(6 years, 2 months ago)
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Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the hon. Member for Stone (Sir William Cash) for bringing forward the debate and all other hon. Members for their pertinent questions. Let us first remind ourselves why investment in growing our railways is imperative. We need investment in capacity growth and connectivity, which is being called for particularly in the north but also across the rest of the country. We also need to see environmental improvements, particularly in air quality. Rail provides a real opportunity for modal shift, whether from car to train or, indeed, from plane to train in the case of high-speed trains. We also need to invest in economic opportunity, so much so in the north, which for generations has missed out on the investment we have seen in London and the south-east.
However, we must be mindful of communities, the environment and construction costs. For such major infrastructure projects, we must also be mindful of skills, the opportunity for employment and how we develop engineering across the country. We must also be aware of the cost of getting it wrong. It is therefore right for hon. Members to call for reviews, investigations and transparency, because this is a publicly supported project about which the public demand answers, and they must receive them. As the project moves into a new phase of governance and leadership, it is important that a new approach is brought to high-speed rail to put in place the scrutiny that the public demand.
We must also get answers from the Minister. We have heard speculation and read reports, so today I ask her to clarify the actual costs of each part of phase 2—phase 2a, phase 2b east and phase 2b west—so that we can all understand the figures, how they have been derived and where costs fall. We must also understand the timeline, which we hear has been set back.
HS1 was hailed as a success, coming in on time and on budget, but clearly the rumours are that HS2 will not have such success. We need to understand why the learning of HS1 has not been translated into this project. HS1 is successful in bringing people from mainland Europe to the UK and in taking people to the south-east. We are proud of that project, but we must understand where the needs sit now.
I understand the public’s frustration. The complete chaos across our rail network over the last three months has set it in the minds of so many that rail can no longer be relied on. We have seen people stranded at stations, people losing jobs because a train has not turned up, and people not getting home to see their family in the evening. When the Government cannot even get the basics right, people are asking, “Why aren’t we getting things shored up before we move on to HS2?” We will read the Glaister report—I understand the interim report will be out later this month—which will address those issues, with interest.
We must have a fully integrated rail system, not one with segregated high-speed rail. I want assurances from the Minister that we will see that integration rather than have high-speed rail just for people who can afford premium rates, because that will not bring economic opportunity to the north. That is why Labour is clear that we would have one fully integrated rail network owned by the public and run by the public as we move forward.
We know that we must build more capacity on the rail network, that we must invest in the economies of the north and that people must be able to travel. The point about freight is important: we need more paths for freight. We must enable that serious modal shift and move freight off roads and on to rail. Investment is therefore imperative, as we know that the road haulage industry cannot recruit the drivers required to run the freight network on the roads. We must make those changes, and we therefore need available paths to do that. Building that capacity is essential, and the west coast main line will lend itself to that.
We also need leading-off capacity to the south-west, Wales and elsewhere across the north, including north of Manchester and York. Labour has closely considered how to develop a long-term plan for rail investment because, as many hon. Members have indicated, it is important to invest in the right places. We have been clear that creating a Crossrail for the north, bringing that connectivity to the north of the country, is our priority.
The Secretary of State’s decision not to electrify the trans-Pennine line has brought real damage to the north, but Labour will introduce reparation for that decision as soon as we come into government. We will ensure that someone can travel from Manchester, Liverpool, Leeds, Bradford, York or Hull, and down into Sheffield and up to Teesside and Newcastle. These are important decisions, and Crossrail for the north will be our priority, ensuring that we catch up on the timeline on which we have been so let down by this Government. Building connectivity to Sheffield will start to address the issues about what route HS2 should take in a faster way, because we wish to ensure that people can get to where they need to go. We must also invest in digital rail so that we get maximum capacity and opportunity from our railways. We must address the dreadful overcrowding that commuters experience day by day, because often people are not even able to get on the trains.
On speed, we believe that it is important to improve the east coast main line. Since we do not know when—or indeed whether—HS2 will be achieved, it is important that control period 6 provides extra capacity for speed and upgrades to the east coast main line. Travelling from York to London will take only 1 hour 31 minutes, and the additional time saving that HS2 will bring to cities such as mine will not be the reason why we need the additional spend required by high-speed rail. This is about capacity, not speed; it is about whether someone has a seat and can work or carry out their activities. That is why we need to invest in rail.
We must also ensure that we are responsible for the environment. I have met the Woodland Trust, and I am concerned about some of the environmental impacts of the project, particularly on sites of special scientific interest. We must be mindful that once things have gone, we cannot bring them back, and I believe that we must maximise our support for the environment as this project moves forward.
Today we have all identified wasted opportunities. Where, for example, is the cycle route alongside this network? That would make sense, but it has not yet been planned, despite its minimal cost. The hon. Member for Stafford (Jeremy Lefroy) mentioned a depot that suddenly appeared on land, and we must scrutinise every decision and decide whether it is imperative for each little piece of infrastructure to go ahead, or whether there are alternatives. It is certainly distressing to hear that so much construction will be delivered by road rather than rail, and it is important to consider that.
Finally, on economic opportunity, I agree with my hon. Friend the Member for Blackley and Broughton (Graham Stringer) that we need better connectivity to the north. Manchester is such an exciting city, but we cannot stymie its growth by denying it that much-needed connectivity. Liverpool is also moving forward and follows closely behind. We must ensure the right connectivity and invest in the right places. We need transparency on spend as we move forward. People are concerned; they are paying so much more for their rail fares, which have gone up by 35% under this Government, and they need to understand what the future will hold.
Mr George Howarth (in the Chair)
Order. The hon. Lady has exceeded her time.
Public Sector Pay
Rachael Maskell Excerpts(6 years, 4 months ago)
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Elizabeth Truss
As usual, the money for this pay will be allocated through the Barnett formula, but the money is coming from the central DFE budget.
Rachael Maskell (York Central) (Lab/Co-op)
How exactly will further education colleges be able to give their staff an uplift?
Elizabeth Truss
The hon. Lady will understand that we are conducting a review of further and higher education, and that is among the issues that we will be looking at.
Summer Adjournment
Rachael Maskell Excerpts(6 years, 4 months ago)
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Rachael Maskell (York Central) (Lab/Co-op)
We have heard some excellent speeches this afternoon, not least the two maiden speeches.
In 1772, Robert Hay Drummond, Archbishop of York, commissioned what is now known as Bootham Park Hospital. John Carr was drafted in as the architect, and in 1777 the hospital opened. It was a stunning building based in parkland and 17.85 acres of land, or 21.2 acres including adjacent public land. In 2015, following successive failed Care Quality Commission inspections, the site closed to clinical services, and the site closed to the trust last autumn. Now, a new mental health hospital is being built in Haxby Road, due to be opened in 2019. This leaves in question what will happen to the site. How will public land be disposed of in our city? NHS Property Services Ltd has been required to dispose of the site, and of course an attractive offer will be incredibly tempting.
Similarly, at Duncombe barracks in York, the Ministry of Defence is looking to dispose of that site, favouring 14 executive market-priced homes as opposed to 36 units urgently needed by the local community. Time and again, we are seeing public land being sold off to the highest bidder at the expense of the real needs of our city. No co-ordination or conversation is brought to our local community, which desperately needs homes. Surely, local government should have a say over these disposals. We are seeing more and more luxury apartments and executive homes. We have heard so powerfully today the reality of what happens then.
Of course, this is not what our city wants. The residents of York have been absolutely clear that they want to maintain the hospital site for vital health services for our city. I will explain the geography. Bootham Park Hospital is adjacent to York Teaching Hospital—our acute hospital—which is crammed on to a site that desperately needs additional land to transform health services and bring health into the modern age in our city. Without access to that land and the ability to repurpose Bootham Park Hospital and its site for health service use, health in our city will suffer.
We need transitional care and rehabilitation beds in a newly built specialised unit. We need a primary care-led urgent care centre so that our A&E is not crammed over yet another winter and our hospital is not exploding at its seams. We need to ensure that we house our health sector workers in York. The hospital spends about £30 million a year on agency staff, because people cannot afford to work and live in our city. As a result, our services are poorer. We therefore need that land to create key worker houses for NHS staff. We need additional mental health services, particularly so that our young people have decent facilities. We need extra care facilities for an ageing population.
We do not want to see the magnificent parkland that I mentioned being utilised as the grand entrance to some luxury apartments, or even a hotel, or perhaps a golf course. No, we need a new public park for our city where children can play and sports activities can take place. We also need to ensure that third sector organisations have access to the land that they need. One Public Estate is on board and the acute trust is on board, but we need the Secretary of State to be on board, too.
Our city is crying out for this NHS facility. We need to expand and build for the modern age and transform healthcare from a medical to a social model and from a sickness service to a health service. We should not look at the short-term goals, which so often happens in politics, and miss the opportunity to build a health and wellbeing village for the future of my community that will touch every life and, of course, save money for the public purse in the long term.
Today, the clock is ticking, the gavel is raised and the highest bidder is making its move. The solution to Bootham Park Hospital is to save the site and ensure that it is there for healthcare in the future. Let us create a new life for Bootham Park Hospital and use our imagination to do so.
A120 Dualling
Rachael Maskell Excerpts(6 years, 5 months ago)
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Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under you as Chair, Mr Hollobone. I thank all hon. Members for their considered contributions to this important debate, and not least the hon. Member for Braintree (James Cleverly) for initiating it. I think we can agree that the case made by all hon. Members was very compelling. The link between the port and airport serving Essex is at the heart of the economic strategy presented today. The economic opportunity that such an enterprise corridor could deliver, in terms of real growth in the region, has been cited by some to be worth as much as £1.3 billion, I have read, and all for a cost of £555 million in its creation. It is clear that domiciliary development is occurring, and that brings an opportunity to see industrial investment to provide jobs for those communities as well as the wider economy. Clearly, where such development takes place, there has to be well developed transport infrastructure, but that certainly is not currently the case, especially at some of the pinch points on the A120 route where there is significant congestion.
Giles Watling
Does the hon. Lady agree that it is not only industrial development—manufacturing and so on—that would benefit from this scheme and that there is a massive tourism offer? I am thinking of the wonderful beaches of the east coast. At Parkeston Quay, we have so many cruise ships that come in every year. It is a pity that the people who arrive there have to struggle with our dreadful infrastructure to get to other parts of the country such as London and across to the central midlands.
Rachael Maskell
I agree that tourism is a really important consideration when we are looking at infrastructure investment. It should be at the heart of the wider discussions and seen as an economic piece all by itself.
The debate on how the A120 can be improved to alleviate much of the congestion has been a long time coming. Five options were originally presented. I appreciate that those have been whittled down to four, and option D has been favoured by Essex County Council as the preferred route for the new A120. I also note that option C, interestingly, would see approximately one third of the route bifurcating Bradwell quarry and therefore would relieve some of the environmental impact should that scheme go ahead. We must also note the importance of farmland and agribusiness. In the Government’s planning of development, whether rail or road, they should take on board the need to ensure fertile land is maintained for the purposes of growing our food. I know there is much debate on that point.
The second compelling case made by the right hon. Member for Witham (Priti Patel) was about road safety. With 53 fatalities and 325 serious injuries on this stretch, it is clear that not intervening would allow those risks to continue. That is a serious consideration.
It is worth saying, however, that we cannot look at road improvement without looking at intermodal and alternative modes of transport, and seeing the improvements that can be brought in from other schemes—particularly our rail, but also other forms of transport—in serving communities. While I understand that all hon. Members are trying to promote their local scheme for RIS2, I say to the Minister that we need to look at intermodal options before we look at road. It appears we have shifted to a road-first policy, as opposed to looking at public transport as the preferred option. Evidence from Newbury, Blackburn, Lincoln and other similar cases has shown how induced capacity is having a serious impact on their local economies, so we have to be careful as we make these decisions and look at them in an integrated-transport way.
James Cartlidge
Looking at alternative modes is a fair point, which I hear about all the time. The issue we have is lorries. In our modern economy, all our goods have to go through lorries, from Felixstowe or whatever port. It is coming down on HGVs. It is very hard to get that on to rail when it is at capacity, even though we have a good freight service. Does the hon. Lady agree that that is where there is a shortcoming in alternative forms of transport?
Rachael Maskell
I agree, there is a challenge with the use of freight. It creates an opportunity, however, to put the focus back on putting freight on to rail. We are already 45,000 lorry drivers short in our economy. How we expand rail freight, therefore, is a serious consideration, in order to see that fast through-put of freight. That is something to which we have given much thought and attention.
Where there have been road-widening schemes, after 20 years we have seen induced capacity building congestion again, with an increase as high as 45%. Out of 25 projects only five have delivered the economic benefits that were promised. We need to ensure that everything is thoroughly tested before investment is made.
Will Quince
I apologise for the slight delay in jumping to my feet, but I was a little surprised by what I think the hon. Lady might have said. Did she say that under a future Labour Government, the A120 development would not go ahead?
Rachael Maskell
I most definitely did not say that. The hon. Gentleman must have misheard me. I emphasised the focus we need to put on intermodal transport in particular, looking at issues such as increasing capacity on our rail networks, because we know other serious challenges are afoot across our freight industry. It is important we take those considerations on board.
Vicky Ford
I have campaigned for rail freight for many years. Is the hon. Lady aware that Chelmsford is the busiest two-platform train station in the country and there simply is not additional space to take additional freight down the great eastern main line in the timeframe involved? Digital networks may add a bit more, but we need to resolve the freight by mending this road and our road networks, not just by saying, “Let’s get it on the trains.”
Rachael Maskell
There are choices to be made. I am saying that we invest either in road or in rail. Looking at investment is part of what is called for by the freight industry.
Several hon. Members rose—
Rachael Maskell
If I may, I will finish my point. The Rail Freight Group, which I meet with regularly, has identified how those east-west connections need serious investment. If we want to develop Harwich as a port and see Felixstowe thrive as well, in order to take freight from the east into the west, it is important that we do not dismiss those opportunities and see that proper investment.
Will Quince
The hon. Lady is being gracious in giving way. It is not a binary choice between rail and road. We can and must have investment in both. She said that intermodal schemes should be a priority over roads. This is not an intermodal scheme. Therefore, is she saying that the Labour party would not prioritise the dualling of the A120?
Rachael Maskell
I have already answered the hon. Gentleman. I said that we would have an intermodal approach to all transport systems. It is crucial that we look at the opportunity that public transport can provide.
Rachael Maskell
If I may move on a little, we will see what time there is left. It is important that our approach to strategically developing economic growth, transport planning and housing development brings all development and planning together. We have seen a piecemeal approach to planning, which has not looked at how to serve economic or residential communities and ensure that there are sufficient transport mechanisms to provide that support. We believe that truly sustainable economic and residential hubs need to work together with the integrated transport system in order to best serve communities. We know that in the developments that have taken place, 81% of people living in those areas drive to work, as opposed to having wider options and intermodal choices. That is what I am arguing today.
Vicky Ford
The hon. Lady said the Labour party would invest in either rail or road. This Government are committed to investing in both. Which is she planning to cut?
Rachael Maskell
The hon. Lady is again taking my words and not using them in the way they were said. We will look at intermodal first and at the wider options of ensuring properly integrated transport. Any Government should do that, to ensure that we have the most sustainable and usable rail, bus, active travel and road system that there is. Intermodal integration will give us the best transportation system. Talk to anyone across the transport sector: they would agree with that approach, as do many Government Ministers, who say that they want to see an intermodal shift, too. I have heard such words many times from the Government. I am sure they would agree that is also important, if they are looking at proper economic and residential investment, such as is being suggested by the scheme presented today. That is the approach Labour would take.
We need to ensure that improvements made today do not call for further improvements and widening just a few years down the road, as has happened in many of these schemes. We need long-term solutions and investment put in place, to ensure there is not chaos in the future.
Giles Watling
The hon. Lady is being gracious in giving way. Is she suggesting that people would give up taking their cars to their holiday destination? That is an essential part, in many cases, of a holiday in the UK, so that people can explore the countryside.
Rachael Maskell
I am not suggesting that at all. I am talking about intermodal choice, which is important. Going forward, people need to have real options in how they travel, whether for work or leisure. We want to see those choices expanded. Many people at the moment, as I highlighted, have such limited choices that they have no option but to use the car. If we truly are to make the intermodal shift, we need to see more options being made available for commuters and people travelling for leisure.
James Cleverly
Unfortunately, the hon. Lady has missed quite a fundamental point and I will reinforce it, if not for her benefit then for the ears of the Minister. This proposal is not about taking existing transport patterns and just making them happen on an improved road. What this proposal is about is unlocking residential and employment opportunities within the region, so that people are not forced to drive or take the train to London, for example, to get good-quality work. So the idea behind this proposal is to develop sustainable communities and sustainable economic activities in and around the region itself, reducing the need for long and polluting journeys, and increasing the opportunities for people to work close to where they live, where their children go to school and where they have amenities around them.
Rachael Maskell
I fully understand the scheme; I have read it in much detail. That is why I am making the case that it is so important that we give people real choice.
In my closing remarks—
Sir Bernard Jenkin
I am extremely grateful to the hon. Lady. Will she just give an assurance that the Labour party supports the dualling of the A120 all the way from Colchester to Parkeston, which is a stretch of road that is long overdue for dualling?
Rachael Maskell
I think I have made myself perfectly clear in today’s debate, with all due respect. What I have said is that we believe that we should have a fully integrated, intermodal approach to transportation, which, as I have—
Rachael Maskell
I will not take the hon. Gentleman’s intervention. [Interruption.] No, it is not a no.
As I have said—
Rachael Maskell
As I have said in this debate, we need to look at that intermodal option and that has not been presented in the case that I have read. Clearly, we need to see investment across all our modes of transport, so that hon. Members’ constituents have real choice over how they travel and so they do not have to take the car if it is their preference to take a bus or train. That is what I am saying. We have got to see integrated—
Rachael Maskell
May I finish my sentence? So that we can see an integrated approach to how we assess transport projects in the future, rather than looking at the silos of rail over here, and road over there, which is the approach taken at the moment, as we know, because the RIS process is completely segregated from the control period, and we want to see a real integrated approach. That is the point that I have made throughout the debate.
Rachael Maskell
I see two hon. Members. If it is going to be a completely different point that will be made—[Interruption.] If it is not a completely different point, I will not give way. I will not keep repeating what I have said, so I will just bring my remarks to a close.
It is really important that we consider how we can build sustainability into the long-term future. That is why we want to put the resources and support behind a truly intermodal approach to transportation, but not just transportation in isolation. We want to integrate that across all planning, including economic and residential planning, so that all of our constituents have real choice as to how they travel to work and for leisure.
Business Rates
Rachael Maskell Excerpts(6 years, 5 months ago)
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Rachael Maskell (York Central) (Lab/Co-op)
I beg to move,
That this House has considered a review of the business rates system.
Thank you, Mr Gray, for being in the Chair for this important and timely debate.
Almost every day, we learn of a chain of retail stores or local businesses closing its doors, resulting in job losses, people’s lives being thrown into turmoil and empty premises along our high streets. The Centre for Retail Research has said that 10,000 stores will close this year alone, amounting to 384,000 jobs that are forecast to be lost over the next four years—unless, of course, the Government take urgent action now.
Businesses face many challenges at this time, not least the cost of property rental, and that leads into the issue of business rates. I would like those issues be addressed in today’s debate and I look forward to hearing the Minister’s response, because it is time for action to rescue businesses from the current crisis.
Front Street in Acomb once bustled with an array of independent stores serving the west of York. Those premises are now being exploited by foreign investors who are charging extortionate rents, which in turn is driving up the rentable property value, and thus business rates. Today, empty units line the street. York’s city centre is following suit, as are towns and cities up and down the country. This cannot continue to drag on.
The ever-inflation-busting rental levels have over-inflated the local property market. That is exacerbated by the empty property tax loopholes, resulting in units being left dormant, further blighting our beleaguered high streets and letting the owners of those properties off the hook.
The Valuation Office Agency has made its calculations based on this overheated market and set excruciatingly high business rates, as determined by the Government. When I hold business meetings across York, everyone feels that they have been failed by the business rates system, and as the situation gets worse, they want to know why the Government are forever providing sticking plasters when major surgery is required.
In York, where the retail sector accounts for 13% of employment, the toll is being felt. However, it is not only the retail sector that is affected. The hospitality sector employs 2.9 million people across the UK and although it pays 10% of all business rates, the sector’s share of turnover is just 3%—as the sector puts it, it has made an overpayment of £1.8 billion.
Other businesses are also being impacted. In the last couple of years, I have witnessed major employers—employers employing hundreds of people—leaving the city of York, citing excessive business rates as the root of their decision, and moving to areas with lower business rates. The 2015 valuation took a particular toll on businesses in York. We have had increases as high as 600% for pubs and retail outlets, including a bicycle shop in the city. Our city centre is changing dramatically, with the loss of national chains. High rental rates and business rates are to blame.
Ruth George (High Peak) (Lab)
My hon. Friend is making an excellent speech setting out the key concerns for retailers and other businesses. Does she agree that the average £3,600 increase in rates for small shops over the next five years is contributing to the demise of high streets up and down the country?
Rachael Maskell
My hon. Friend makes an excellent point, because it is the small retailers that are really struggling to survive, and it is an issue of survival in the current age. Of course, business rates are at the heart of the decision by businesses as to whether to remain open or close.
Other organisations have been brought to my attention that are even worse affected than those with the 600% increases I have cited. For instance, there are organisations that have had rooftop solar panels installed and then seen their business rates rise by as much as 800%, and all for doing the right thing. The Valuation Office Agency is discussing similar measures for battery storage, all at a time when green energy and microgeneration should be promoted; instead, people are being deterred from doing their bit for the environment.
Let us remind ourselves that business rates are set by multiplying the valuation rate—that valuation rate is based on the market rental value, as if the property was being placed on the open market—by a multiplier set by Government. In England, that is 49.3p, or 48p for small businesses. It cannot be raised by more than the rate of the retail prices index, or the consumer prices index from this year.
There are certain relief schemes in place, three tiers of arrangements to reduce the burden on small businesses, and an array of different arrangements for charities, rural businesses and community sports clubs. Last April, temporary relief was also introduced, with an additional relief fund of £300 million, which was to be shared between local authorities around the country over four years. Pubs with a rateable value above £100,000 were given relief at a flat rate of £1,000, which is subject to current state aid rules. I would like the Minister to examine that specific issue. There are also relief schemes for fibre infrastructure, local newspapers and empty properties.
York received £788,000, but the local council’s governance of the money provided by that fund has been extremely poor. It started with an application process in May to provide grants to businesses that were struggling and that could guarantee—that is, guarantee—they would be sustainable. However, because businesses were unable to give such an assurance, they were unable to apply. In December, the council therefore changed its mind. All businesses with premises that have a rateable value under £200,000 and that had experienced a business rates increase of over 12.5%—except for national chains and local government premises—automatically received a discount, meaning that the council did not even consider hardship issues; the discount was an automatic entitlement. The Government should have provided far better guidance for councils that were handing out taxpayers’ money; the councils really did not have the understanding of what was required of them to support businesses.
This year, York will receive £383,000; next year, it will receive £158,000 and the following year just £23,000. That tapering leaves businesses in an incredibly vulnerable position, without any long-term solutions being provided by the Government. Businesses are crying out for such solutions.
York is not unique, but it does provide the Government with an excellent case study as to why the business rates system is failing. I will provide some examples of the systematic problems that my city is facing.
Retailers in high-value rental areas pay the highest rates, whereas companies selling goods on the internet from warehouses in low-value rental areas pay the lowest. For example, Amazon is the largest retail business in the UK, with a warehouse of 65,000 square feet outside York. In York, Amazon pays £1.4 million in rates. Marks & Spencer in York city centre is seven times smaller in size, but it still pays £500,000 in business rates, or about a third of the amount that Amazon pays.
The smallest stores pay the most. For example, in York city centre small shops pay up to £950 per square metre, whereas larger companies benefit from a special larger store rate of £110 per square metre. If all companies in York paid the same as small businesses in York, Marks & Spencer would have a rateable value of £9 million and Amazon would have a rateable value of £61 million. Across the sector, the perception has grown that the Valuation Office Agency gives large companies favourable treatment to avoid lengthy and costly disputes, and clearly small businesses are suffering.
Bill Esterson (Sefton Central) (Lab)
The comparison between what is paid by large out-of-town and online retailers and what is paid on high streets is extremely well drawn. Does my hon. Friend agree that the problem is that unless something is done—and it can only be done by the Government—to create a fairer business taxation system to even up the situation between online and out-of-town retailers on the one hand and the high street on the other, high streets and their communities will continue to suffer, and anybody who works in those areas, and their families, will be put under pressure? This issue has to be dealt with urgently, and the Government must intervene to address the problems of unfair business taxation.
Rachael Maskell
The point my hon. Friend raises is the point of this debate. The reality is that we are talking often about independent business in which families have invested, maybe for generations, building it up and building a reputation, only to find that the competition from online sales and out-of-town stores is challenging. In addition, such businesses then have the weight and burden of business rates to pay on top of high rental values for their properties. The sums simply do not add up, and it is driving them out of town.
That situation is why we are seeing so many closure notices on shops. Some shops have been part of communities for decades and are sadly no longer there. That is certainly true of York. Our communities are losing their identity as a result and that is changing what happens in our town and city centres. I could relate so many stories from York of how independent shops have disappeared to be replaced by vertical drinking establishments and other such premises. That changes the whole context of our city. It is vital that we get on top of the business rates issue.
We have to recognise that businesses are penalised when they try to do the right thing, as equipment adds to the rateable value of business premises. Companies are penalised for making improvements to their businesses. Labour’s manifesto promised to exclude all new investment in plant and machinery from future business rates to encourage investment. We want to see employers investing in the future of their business, but they are deterred. If that investment would put up their rateable value, why take those steps when they are already struggling?
Ruth George
Businesses often have to invest in CCTV because of rising crime rates. In doing so, they can help the police by providing footage to help catch offenders, but they are then penalised for doing the right thing and helping tackle crime when their business rates increase due to that investment. Does my hon. Friend agree that that is an anomaly that must be looked at?
Rachael Maskell
My hon. Friend makes an excellent point. When people try to improve their community, and not just the business itself, that increases the rateable value. Business rates are built on that premise. In York, a company installed air conditioning. That might seem an obvious thing for a business to do, but doing so increased the rateable value by £275. That business now sees air conditioning as a negative, rather than a positive for itself, its staff and the public.
We have to be honest: business rates are an extremely antiquated system that is not fit for purpose in our globalised digital age. The UK now has the highest level of online shopping in the world, and it is essential that the duty that is paid catches up with that reality. We know that online shopping is increasing because when we go to our high streets, the stores that shoppers want to engage with are no longer there. There are also the wider trends we see across the world.
We need to ensure that we invest back into our city centres to revitalise them and ensure that they keep their identity. That is especially important for a city such as York, which has such a great heritage and attracts 7 million people a year. We want to ensure that people continue to come to our city not only for all the wonderful attractions, but to utilise the vibrant shopping area it once was.
Last April, following the revaluation, the average small shop was hit with an extra £3,663 in rates over the next five years, while many large online retailers saw their rates fall. Large supermarket chains saw a 5.9% reduction in their rateable value. There is huge inequality within the retail sector. Pubs are also being put at risk. They pay 2.8% of the total rates bill, yet contribute only 0.5% of the rate-paying business turnover—an overpayment relative to turnover of £500 million. That figure will increase by 17% by 2021-22.
It has been cited that the transitional relief scheme has been of detriment to some businesses. For instance, House of Fraser saw a 10% rise in business rates last year. As has just been announced, it is looking to close 31 stores, of which 28 have been negatively impacted by the relief scheme. It is clear that huge inequality has grown with the advent of large out-of-town retail centres and the online industry. The business rates system simply does not work in the modern age.
Reform has been called for, not least by the Business, Innovation and Skills Committee, as was, which in 2014 recommended changes to the business rates system. The Committee called that system
“a significant barrier to innovation.”
It recommended a Government review of the system to examine the questions
“whether retail taxes should be based on sales, rather than property; whether the retail sector should have its own form of taxation, calculated in a different way from other businesses; and how frequently the revaluation of Business Rates should take place.”
Since those recommendations were made, York Retail Forum has not been idle. It has carried out a thorough piece of work to look into the alternatives, and it has concluded that the best way forward for its businesses is to have a turnover tax. The Centre for Retail Research has come to the same conclusion. Clearly, if that formula were to be adopted, there would need to be tapering to address businesses with a high turnover but low profits, such as small convenience stores.
Local entrepreneur Phil Pinder, who chairs York Retail Forum, has looked at the figures. When just a 1% levy is placed on all online and high street businesses, the resultant revenue exceeds the current total raised by business rates. Governments gain, small businesses gain, local economies gain, high streets are revitalised, and tax-dodging multinationals such as Amazon have to pay up. While the benefits for Government would be the same, introducing a turnover tax would be like handing thousands of pounds to small businesses and would help them to invest in developing their businesses and employing more staff.
Equally, a profit-based levy would provide for a fair system: the more profit, the more a business would pay proportionately. That is favoured by many businesses, as they believe that nothing could be more equitable, and certain exemptions would not be required. With either model, there could be some tapering, so that those with the greatest returns paid more and those with the least paid less. Social interventions could be made—for instance, some relief for those who invest in microgeneration of energy. There is scope to use the system to drive forward our future economies. Either way, we need to find a new way to bring in revenue from businesses to replace the business rates system—perhaps through another non-domiciliary, property-dependent levy. Whichever system is used, it would clearly be a lot easier to operate, to collect revenue and to reinvest in communities and business growth.
One other point that I must raise in today’s debate is that the Valuation Office Agency is not fit for purpose. It has lost staff; its IT systems are creaking; its programme capability is questionable, having failed businesses; its “check, challenge, appeal” system is not thorough in responding to the grievances of businesses; and its time delays are causing more difficulty for businesses that are already struggling.
That brings me to my key point: the Government have prevaricated for far too long over business rates, and we have on our hands a serious crisis on our high streets. Last year, in the light of the business rates crisis, many of us in Parliament gathered momentum to call for change. On 8 March 2017, a business rates review was announced by the Chancellor. Since then, I have continually asked questions about when that review will begin, and have been passed from pillar to post—from the Ministry of Housing, Communities and Local Government to the Department for Business, Energy and Industrial Strategy, and from there to the Treasury. That resulted in my having to raise a point of order with the Speaker to identify who was responsible for what, and even then, discussion ensued on the Government Benches.
Businesses are saying that they cannot wait any longer, and the daily announcements of closures testify that that is the case. The Government have to get on and start their major review of a new business levy. In introducing today’s debate, I am calling time on this broken system on behalf of businesses in my city and up and down the country, and asking the Minister to carry out the following with immediate effect.
First, I ask the Minister to open a complete review of a new business levy system to report in the autumn, with recommendations being made in time to be implemented in this year’s Budget. Secondly, I ask him to open the consultation to all businesses across the economy and to commence the review before the summer. Thirdly, I ask him to identify some case studies to gain an in-depth understanding of why the current system is failing. I suggest York would be a good case study for the Minister to look at, and I am sure other colleagues would be helpful in advising why their communities would provide good examples too.
Fourthly, I ask the Minister to look at the offshore rental market and its impact on our high streets and businesses, and at the extortionate rents that people have to pay. There is often no connection between the local community and the offshore business entrepreneurs who seek to reap as much revenue as they possibly can, at the expense of the high street. We need reparation there, too, because that feeds into the business rates crisis that we see today.
There is an existential crisis on our high streets as they are drained of the vital enterprises that give life and character to our communities. There is no scope for further delay. I urge the Government to bring a laser focus to this issue, and I call on the Minister to act. I trust that he will be willing to meet me and other hon. Members to help move the issue forward for the sake of our communities. There needs to be a radical reform of the system. The Chancellor said it was his desire to move away from a bricks and mortar-based system. The review was promised in the Conservative manifesto, as well as in ours, so progress should not be delayed. Time is running out.
I trust that the Minister will respond clearly to the matters I have raised and tell us what actions he will take to secure a new business levy system that is in place in time for an announcement in the autumn Budget.
Rachael Maskell
My constituents will be very disappointed by the Minister’s response, because he did not respond to the specific questions I raised. We have a broken business rates system. The fact that the system takes only £30 billion but requires £9 billion of relief is in itself evidence that it is broken and in need of urgent repair. In the light of the many cases that hon. Members have raised, the Treasury needs to pay greater attention to this issue.
Motion lapsed (Standing Order No. 10(6)).
Laser Misuse (Vehicles) Bill [Lords]
Rachael Maskell ExcerptsMonday 30th April 2018
(6 years, 7 months ago)
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Rachael Maskell (York Central) (Lab/Co-op)
The Bill has been much improved by the persistence of our Labour colleagues in the other place.
I am sure that the whole House would want to join me in sending condolences to my hon. Friend the Member for Kingston upon Hull East (Karl Turner). He had been leading for the Opposition on the Bill, but he has just lost his father, the distinguished Hull city councillor Ken Turner. Our thoughts and prayers are with him and his family today.
As no amendments were tabled, I shall highlight a few points in the Bill itself. It is a short Bill, consisting of two substantive and two procedural clauses. Clause 1 makes it an offence to direct or shine a laser beam towards a vehicle or a person in charge of a vehicle in such a way as to dazzle or distract the person driving, piloting, navigating or otherwise in control of the vehicle when it is moving or is ready to move. It results from an amendment tabled by Labour colleagues in the other place. There may be mitigating circumstances if it can be proved that the use of the laser was necessary in, for example, a rescue mission to attract attention of a pilot, or that the offence was committed by accident if the laser was being used professionally and all precautions had initially been taken to prevent an incident from occurring. The penalty will be imprisonment, an unlimited fine, or both. Advancing the deterrent sends a clear message that laser misuse will not be tolerated. It has also been clarified that a laser beam could be a pulsed or continuous light, and it is defined in clause 3. The definition of the modes of transport to which the Bill will apply has been extended, thanks to the work of my Labour colleagues in the other place.
The Bill is an important piece of health and safety legislation to safeguard those who operate modes of transport from the effect of laser misuse. Lasers are being used to shine lights into the eyes of drivers, causing, according to the British Airline Pilots Association, four progressive stages of seriousness—distraction, disruption, disorientation and even incapacitation—which may have a sustained impact and could result in fatal consequences for the driver, passengers, the public, or a combination of those people.
The issue of laser misuse was first drawn to the attention of authorities by the aviation industry, but the Bill also covers drivers or navigators in charge of helicopters. A number of incidents have been cited, not least by police helicopter pilots. There have also been incidents involving planes, trains, ships, hovercrafts, submarines and road vehicles. The Bill’s provisions extend to bicycles, motor scooters and horse-drawn carriages, as well as air traffic control.
Labour recognised the need for legislation that would build on the Air Navigation Order 2016, and along with the aviation industry and other transport operators, our Front Benchers have welcomed the Bill. It was our suggestion that such legislation could be introduced in the Vehicle Technology and Aviation Bill. We recognised the insufficient penalties resulting from the 2016 order and the very small number of prosecutions. The Bill will act as a far greater deterrent to laser misuse throughout the transport system. At this point I should mention the collaborative and cross-party work that has been done in both Houses—not least by the right hon. Member for South Holland and The Deepings (Mr Hayes), who is not present this evening.
The other place amended the Bill to ensure that it was comprehensive in addressing the misuse of lasers, and in particular I thank Lord Tunnicliffe of Bracknell for his contribution. We are also indebted to the UK Laser Working Group, whose expertise has informed this Bill at all stages.
The Bill, while recognising the legitimate use of lasers, will ensure that those in charge of a vehicle are not put at risk, thus putting other transport users at risk, too. In the last year, there have been more than 1,000 cases, a sharp rise over a very short period of time. While that has not led to any accidents to date, in safety-critical industries we will not allow such risks to propagate, which is why we are supporting the Bill on Third Reading today.
The BALPA membership survey stated that half its pilots reported having experienced a laser attack in the last 12 months—55% of pilots, I believe—and that 15% had experienced three or more laser attacks. It is therefore heartening that external stakeholders also support the Bill, and I thank BALPA for its work in this area and all those working in transport who have advocated such legislation.
I can testify to the intensity of light from lasers, as some young people in my constituency shone a laser at me when I was out on an estate last summer. Momentarily blinded, I sought to look away, but that brief experience brought home the dangers of such laser devices, and permanent eye damage can occur if there is exposure to such light.
May I take this opportunity to thank the Clerks for their assistance through the passage of the Bill, my hon. Friends in this place and colleagues in the other place for their participation in the various stages of the Bill, and external stakeholders who have worked with us to ensure that it receives a smooth passage through its final stages?
Clearly, we are disappointed that the Prime Minister called a general election before we had the opportunity to enact the Vehicle Technology and Aviation Bill, but, a year later, I am glad that we have been able to complete the Bill’s passage in this place today. It just goes to show what can be achieved when all parties remain laser-focused on acting in the best interests of the public.
I trust that the public will recognise the importance of the Bill and that this risk across the transport sector will be deterred. There is clearly still a debate to be had about the ownership and use of laser beams, as Public Health England advises, but that will be for another Bill on another day.
I close by thanking all those who work across the transport sector for the application of their skills in keeping the public safe and ensuring that the UK has the highest of standards in transport safety.
Customs and Borders
Rachael Maskell Excerpts(6 years, 7 months ago)
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Yvette Cooper
They are, and it is perhaps unsurprising that they should do so, because businesses will make investments, they will take a precautionary approach, and they will look for the best way to protect their trade at a time of such huge uncertainty about what might happen to trade that we want to pass through the UK. We will see more and more of those consequences, therefore, particularly if we do not get answers and decisions soon.
Rachael Maskell (York Central) (Lab/Co-op)
Does my right hon. Friend agree that the biggest threat of all is the threat to jobs, as businesses are making their investments elsewhere in mainland Europe as opposed to the UK now, let alone in the future?
Yvette Cooper
I do, and I think this is also particularly about our manufacturing communities, and many of our towns across the country, where those jobs are so important.
Oral Answers to Questions
Rachael Maskell Excerpts(6 years, 7 months ago)
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Mel Stride
As I have just identified, the Government have done a huge amount to reduce the burden of business rates. We recognise the important fact that these taxes need to be paid, irrespective of whether businesses are profitable or otherwise. That is why we have gone to such lengths, providing £9 billion of relief in 2016, including transitional relief for those facing the largest potential increases in business rates, and a further £2.3 billion by way of bringing forward by two years the change in the indexation of business rates from retail prices index to consumer prices index, saving businesses £2.3 billion over the next few years.
Rachael Maskell (York Central) (Lab/Co-op)
Business rates are really hitting businesses in York, particularly in the retail sector. This is having a huge impact on our city. On 8 March 2017, the Chancellor promised this House a complete review of business rates, yet we have only seen sticking plasters from the Government. When will that review begin?
Mel Stride
The business rates review is being undertaken by the Ministry of Housing, Communities and Local Government.
Spring Statement
Rachael Maskell Excerpts(6 years, 8 months ago)
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Mr Hammond
I think that that would involve widening the scope of the intended consultation rather dramatically. I remind the House that, when I referred to this issue in the autumn Budget, I said that I was not minded to lower the VAT threshold because I recognise that, at its current level, it keeps a lot of small businesses out of the administrative burden of VAT. However, we are keen to ensure that the cliff-edge effect, which has a damaging impact on businesses that are trying to grow, should be addressed if it is possible to do so. The consultation will pursue those ideas.
Rachael Maskell (York Central) (Lab/Co-op)
There is a reason why we need to invest in our public services. In York, our schools have gone from being the seventh worst funded to the very worst funded authority, our NHS is in a capped expenditure process, and no social housing has been built. Should not the Chancellor invest in our children and in the sick, and provide homes for the homeless?
Mr Hammond
I am afraid that it is characteristic of the Opposition that they are able to see the world only through the lens of inputs—
Mr Hammond
The reality is that since 2010 we have increased the number of schools that are good or outstanding. That means that 90% of schools are now either good or outstanding, and that 1.9 million more children are being taught in good or outstanding schools. That is the metric that matters to parents and to children themselves in terms of their life chances. It is not always just about the money; it is also about the outcomes.