Business Rates

Annette Brooke Excerpts

Wednesday 4th December 2013 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I first draw the House’s attention to my declaration in the Register of Members’ Financial Interests: I am a part-owner of a very small business. I apologise in advance if I miss the winding-up speeches, because the debate is not taking place at quite the expected time and I have another engagement that I cannot get out of.

It is important to take on board what a huge burden business rates and rents are when taken together, particularly for smaller firms. That is a problem in my local shopping district, where, following on from a point made by the hon. Member for Wirral South (Alison McGovern), we will have our Christmas parade on Saturday. That event has been happening for decades and is incredibly important to our community. Broadstone chamber of trade organises it entirely, and hundreds and hundreds of people flood into our district shopping precinct, which is obviously good for trade. I am pleased that our district shopping centre qualified for £10,000 of Mary Portas funding, which was helpful. The business sector is also working within the neighbourhood forum, which is in the process of setting up its neighbourhood plan.

It is important to realise that, although there is a difficult economic climate, the Government have introduced many positive measures. The cutting of corporation tax, which has been mentioned, has been significant. Under the previous Government’s plans, there was a potential increase. The increase in small business rate relief has tripled its value, which is highly significant. Like other Members who have spoken, I will listen carefully to what the Chancellor of the Exchequer has to say about that tomorrow.

My hon. Friend the Member for Burnley (Gordon Birtwistle) campaigned to increase capital allowances, and the Chancellor thanked him personally in the 2012 autumn statement as he increased them tenfold. That helped small firms by offering them 100% tax relief on capital spending up to £250,000 for two years. The £2,000 employment allowance has been mentioned, and it has been incredibly important in helping small businesses take on more employees—a plus-plus all round.

There have been an enormous number of initiatives to try to counteract the failure of the banking system, which we inherited, and to try to get finance to small and medium-sized firms. The business bank is one of many. We are doubling the number of small and medium-sized enterprises exporting with help from UK Trade & Investment. I recently visited a local firm that has doubled its turnover in the past three years and has 130 employees, and it commented in particular on the support that it had received from UKTI. We have the regional growth fund, which is really important. Local enterprise partnerships are beginning to come together and work very well in some areas, and there are local enterprise zones, which have been mentioned in the debate. The Government have taken a lot of positive measures, which we should not overlook.

An interesting remark was made to me yesterday by the Wessex Federation of Small Businesses. It commented that many rents are inclusive of rates—a point that I had not thought about before—and that starter units within a larger complex do not benefit from business rate relief. Perhaps that issue could be looked at.

I endorse the comments made by my hon. Friend the Under-Secretary of State for Communities and Local Government (Brandon Lewis), who said that the Localism Act 2011 was important and brought in local choices and flexibility. If we are to have more discretionary business rate relief, it is the local area that knows best where to make those decisions. That is important for the potential of our high streets and district shopping centres.

I appreciate the move towards business rate retention by local authorities—although perhaps not the global sums of money involved—and I think that that is the right move to incentivise local authorities to attract business to the area. In the longer run, I would like a higher proportion of business rates to be retained within the local authority area, as that is the way we should go as a truly localist Government.

I will end with a comment from the Federation of Small Businesses, which said that the second wave of city deals—including for Bournemouth and Poole—will not have the same business rate retention as the first wave. I feel that would be a rather retrospective step, and I hope it can be looked at again.