Business Rates

Debate between Bill Esterson and Simon Danczuk

Wednesday 4th December 2013 Commons Chamber

[Simon Danczuk (Rochdale) (Lab)]

It is a delight to follow the hon. Member for St Albans (Mrs Main). Let me start by declaring an interest: I have recently initiated a business rates appeal in regard to Danczuk’s Deli, which opens this Saturday in Rochdale. I thought it right and proper that I should put that fact—it is not an advertisement—on record.

I have been banging on about business rates for some time now. I was doing it even when it was unfashionable. It is funny how things change. A Labour leader has been cheered to the rafters at the Labour party conference, not for proposing to nationalise the FTSE 100 companies or anything like that, but for proposing to freeze and cut business rates. Labour is the friend of small business, the Conservatives are perceived as the friends of big business, and the Liberals do not have any friends at all.

Labour is the friend of small business, but it does not stop there. Everyone is concerned about business rates, including the Confederation of British Industry, the Federation of Small Businesses, the British Independent Retailers Association, the British Retail Consortium, the British Chambers of Commerce and the Forum of Private Business—the list goes on and on. In fact, I want to ask the Minister to name a significant business person who thinks that business rates are fit for purpose. I invite him to intervene on me if he can do so. Let us be clear: there is dismay and concern about the business rates regime, not only in the business community but on the Minister’s Back Benches. I have done a little bit of research, and found out that the following Conservative MPs have all raised concerns about business rates: the hon. Members for Witham (Priti Patel), for South Suffolk (Mr Yeo), for Altrincham and Sale West (Mr Brady), for Watford (Richard Harrington), for Nuneaton (Mr Jones), for Brentford and Isleworth (Mary Macleod), for Selby and Ainsty (Nigel Adams), for Enfield North (Nick de Bois), for Newton Abbot (Anne Marie Morris), for Worcester (Mr Walker), for Rossendale and Darwen (Jake Berry), for North Swindon (Justin Tomlinson) and for Crawley (Henry Smith). We have heard from more tonight.

Even this Government’s Business Secretary raised concerns at a conference in March, saying that the business rates regime was “old fashioned”, and that there were

“all kinds of hidden distortions”.

He went on:

“Is the valuation base the right one? That is the fundamental question we should be asking.”

Never mind asking the Minister to name a significant business person who supports the current business rates regime; can he name anyone in his own party or in the Government who does so? The silence is deafening, because the reality is that nobody supports the present arrangements.

There was a simple solution that was used to address the inequalities in business rates and to retain some fairness in the system: it was the regular business rates revaluation. But what did the Government do? They postponed the revaluation, which would have re-aligned business rates with property values. People, particularly those in smaller businesses, are asking why the Government would want to postpone fairness. What is the logic behind retaining unfairness? That question needs to be answered.

On 16 October, in the House, the Minister for high streets—the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis)—peddled the greatest line of all. He said:

“The biggest beneficiaries from a 2015 revaluation would not have been small shops, including in the north of England, but prime office space in London.”—[Official Report, 16 October 2013; Vol. 568, c. 817.]

That is simply untrue. In my constituency, people are paying more in business rates because the revaluation is not taking place. That has been proved. Cushman & Wakefield, a leading global property consultant, provides a quarterly central London index covering central London office space. It shows beyond doubt that the Valuation Office Agency had overestimated the effect on London offices of a 2015 revaluation and that, in fact, they would have paid more as a consequence of that revaluation. So I challenge what the Minister has said.

The British Property Federation’s lease events report, published last month, clearly states that

“retails outside of London and the South East saw rental income fall for all leases upon renewal or re-letting.”

[Bill Esterson]

One point that my hon. Friend is making is about the effect on retail. Is it not the case that tens of thousands of shops could close unless this issue is addressed, with the loss of hundreds of thousands of jobs? The jobs of young people would be particularly affected, because many young people start their careers in retail.

[Simon Danczuk]

My hon. Friend is absolutely right and he makes an important point; retail is the first rung on the ladder into employment for young people.