Business Rates

Baroness Bray of Coln Excerpts

Wednesday 4th December 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

I beg to move an amendment, to leave out from ‘House’ to end and add:

“acknowledges that this Government is taking decisive action to back business and make Britain’s economy work for everyone; notes that the Government has cut business rates, National Insurance and corporation tax for small firms despite the need to tackle the deficit left by the last Administration; observes that the value of small business rate relief has trebled since the general election and small business rate relief will be considered in the Autumn Statement; notes how the overall multiplier has been frozen in real terms; applauds the abolition of the unfair port taxes; welcomes the Localism Act which has made small business rate relief easier to claim and allows councils to introduce local discounts; notes with approval the rate relief in 24 enterprise zones; further welcomes the new empty rate relief for new build in contrast to the last Administration’s increases in empty rates; endorses the way in which local rate retention now gives councils new incentives to support local enterprise; and rejects the policy proposals from Her Majesty’s Opposition on rates which would involve increasing corporation tax on all firms, undermining British jobs and businesses.”

I congratulate the Opposition on securing today’s debate. It is fantastic to see that Labour finally has a policy on local government. Unfortunately, it is its only policy and it is not a very good one. It is all well and good calling for a cut in business rates, but strangely the motion does not mention that it would hike up business taxes to pay for it. As the British Chambers of Commerce has said:

“Labour must realise that you can’t rob Peter to pay Paul.”

The Institute of Directors has warned—the shadow Minister seemed to miss this point—that:

“The main corporation tax rate is paid not only by multinational corporations and FTSE 100 companies but by medium sized companies and smaller firms... It’s a dangerous move for Labour to risk our business-friendly environment in this way.”

The CBI added:

“I just think it’s divisive to take from one part of the business community to give to another... Whether you are small, medium or large you need to invest as a business and grow as a business and higher taxes don’t do that.”

[Angie Bray (Ealing Central and Acton) (Con)]

Like many people here, I want us to help businesses with business rates where we can, but not by cancelling the reduction in corporation tax, which is Labour’s policy. Does my hon. Friend agree that that would be totally counter-productive, because it is so often the larger businesses that provide the work and contracts on which smaller businesses often depend?

[Brandon Lewis]

My hon. Friend makes an excellent point. All businesses can be liable for corporation tax, so it affects all businesses. Unlike the Labour party, we recognise that we have to look at the picture for business as a whole, not just bits in isolation.

With such a lukewarm response from business, the Labour party is still a long way from the heady days of its prawn cocktail offensive.