Supporting Small Business

Chris Evans Excerpts

Tuesday 19th October 2021 Commons Chamber

[Lee Rowley]

We have seen the Government make many changes over the past decade that have improved business conditions in this country and allowed businesses to continue to progress, and we will continue to do that. I know that ministerial colleagues will come forward with proposals in due course.

On the motion before us and the shadow Chancellor’s speech, it would be churlish not to recognise the extraordinary amount of support that the Government have already provided to business. Even as someone who prefers to focus on outputs and achievements in our country, I accept that the past 18 months were necessarily about inputs and keeping businesses going until they could properly trade again. To do that, we offered hundreds of billions of pounds of support from the taxpayer to provide one of the world’s most generous and comprehensive economic responses to the pandemic.

We enabled 1.3 million employers across the UK to furlough up to 11.5 million jobs. There were 1.6 million Government-backed loans, representing more than £79 billion of support. We paid out almost £14 billion in support to around 5 million self-employed people. We cut VAT for the hospitality and tourism sector. We waived billions of pounds of business rates for long periods at the height of the pandemic. And we brought in a range of regulatory easements to help businesses.

[Chris Evans (Islwyn) (Lab/Co-op)]

I ask for the Minister’s advice. One of the most frustrating things about business rates is when a business asks for some flexibility and it is difficult to speak to the right person. A number of businesses in my constituency want some flexibility on their business rates. They go to the council, but the council only collects the tax. They go to the valuation office, which only does the valuation. There is no system to appeal against business rates at the moment. Will the Minister address that in his speech?

[Lee Rowley]

I understand the hon. Gentleman’s concerns, and I acknowledge the challenge. There is always a balance to be struck. This level of detail is perhaps slightly away from the motion, but I would be happy to discuss it separately.

We should not forget all the support that we have provided over such a sustained period, and we should not strip this debate of that context. Now our task is to make sure that businesses, large and small, have the opportunity, the talent and the ability to unleash their full potential, which is where I am afraid I will have to diverge again from the Opposition and their remarks today.

The extraordinary circumstances of the pandemic required an extraordinary response from the Government, and we delivered that extraordinary response, but it did not come without cost. Whether we like it or not, providing such a comprehensive and decisive economic response has dramatically increased public borrowing. Government debt has exceeded the size of the UK economy for the first time in more than 50 years. It was an appropriate and proportionate strategy, when we were faced with a real and immediate crisis, to support businesses and allow them to ready themselves for when the recovery came, but over the medium term it is clearly not sustainable to continue borrowing at these levels.

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[Naz Shah (Bradford West) (Lab)]

I thank the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), for ensuring that we are having this debate on our Opposition day, as it is important to my constituents and certainly to the businesses in my constituency.

Supporting local businesses means supporting the workers, families and people in our communities. Local businesses are not just the backbone of our economy; they are also often the depictions and representations of many towns and cities across the country. In Bradford, we are incredibly fortunate to have a rich profusion of local businesses, especially in the hospitality industry, which not only caters for the locals in Bradford, but brings in so many others from afar. However, during the pandemic businesses have struggled, and those in Bradford West struggled extensively due to a longer period of local lockdowns. Their compassion, even in the toughest of times, did not wither away, and I witnessed that at first hand. While businesses were closing their doors, they were also opening their hearts by supporting those who were most in need, especially our NHS. I want to put on record my gratitude to them during those times.

But gratitude is not enough. Those businesses need the Government to support them during times of uncertainty. Although we are grateful for the support that has been forthcoming, it does not cut far enough for the businesses that are struggling now. The pandemic and the gradual effects of Brexit are signs of the pressures that local businesses are facing every day. We have heard about the queues of lorries that we expected at Dover following Brexit, but what this Government’s poor planning did not assess was the lorries without drivers that would have an impact on food and fuel shortages. This afternoon, I spoke to Regal Foods, a medium-sized business in my constituency, which really was affected by the situation.

Although a long-term strategy is needed to support local businesses to help to rebuild our economy, we can help sooner by freezing business rates. Labour plans to freeze business rates until the next revaluation. That will benefit sectors such as retail and hospitality that are hit the most by this tax. Hospitality businesses that are struggling to find workers and have only recently had to endure the increase in VAT to 12.5%, while barely being able to remain afloat, need such support. Labour also plans to cut business rates and increase the threshold for small business rates relief from the current threshold of £15,000 to £25,000.

[Chris Evans]

During the last financial crash, the Labour Government actually cut VAT to reinvigorate the high street, by ensuring that people went there and that money started to flow through the shops again. We hear from this Government yet again about raising value-added tax, as the Conservatives have always done whenever they have been in power. Does my hon. Friend believe that a VAT cut, rather than an increase, would help the high streets?

[Naz Shah]

I absolutely agree. The Government have gone back on their manifesto pledge not to raise taxes. Giving small businesses a discount on their business rates for 2022-23 would be a much-needed lifeline.

As I said at the start of my speech, supporting local businesses is about not just business, but the entire community. There are lots of wedding halls in my constituency. During the pandemic, I recall inviting the Prime Minister up to visit some of them. A wedding hall in my constituency is not just about the wedding hall itself and the people running it. It creates other jobs: the waiters, the florist, the photographer, the caterer—the list goes on. The pandemic really has had an impact on the local economies of these places. The Madisson, the Rio Grande and the Mirage in my constituency—those are the big ones, but there are lots of small ones too—have really borne the brunt of what happened during the pandemic. Those wedding halls are huge. Anybody who has been to an Asian wedding will know that we do weddings really well, with a large amount of people in attendance. Despite being able to put social distancing measures in place, the venues were not allowed to open and they really suffered.

In the same way, cutting business rates for SMEs will not only support the local economy, but counteract deprivation, poverty and regional inequality. I have the fastest growing rate of child poverty in the whole of Yorkshire and Humber. These measures go a long way in helping people to keep the bread on the table and keep their household going. We already know how much the universal tax credit cut will impact on my constituency.

A report from WPI Strategy in 2020 found that constituencies like mine are ranked third highest in the need for levelling up, as a direct result of a regional inequality impacting on business rates. The report found that it was even justified to refer to this regional inequality as a “northern shop tax”, as hard-working businesses in these areas, from SMEs to multinationals, were more likely to struggle with setting up shop because of business rates. More worryingly, analysis by Labour using the latest Office for National Statistics business impact survey reveals that 332,000 businesses are at risk of closure in the next three months, accounting for 828,000 jobs. In my constituency of Bradford West, 232 businesses are at risk, which will have a devastating impact on so many families who are already struggling.

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[Chris Evans (Islwyn) (Lab/Co-op)]

Having listened to the speeches from the Labour Benches, I have put Bradford, Liverpool and Hull at the top of the places that I would like to visit. I would caution Conservative Members about some of the things they have said about the constituencies that they represent. When they talk down their constituencies they are not giving a very good advertisement to visit these places. They may be beautiful and there may be fantastic people living there, but it is no good if the Member of Parliament is standing there talking about the night-time economy, antisocial behaviour and what a bad visit it would be to go to the high street.



To me, the high street is the lifeblood of the British community. I have childhood memories of my mother dragging me around the shops to get shoes from the local shoe shop when we had to go back to school. I remember, when I was older and got into music, buying my first vinyl from the local record shop. As I got older and wanted to go out, I went out and got the latest fashions from the menswear shop. I remember that high street thriving, full of people and bustling. When I went back there a couple of years ago—I took my wife there once—I could not believe the transformation of that small high street that I remember so well. The banks had closed down and the cashpoints were concreted up, as people did not use them anymore. It was full of derelict shops.

I was interested to hear from my hon. Friend the Member for Pontypridd and Taff-Ely (Alex Davies-Jones). I remember venturing sometimes down to her constituency to go shopping. I remember the Woolworths being there, and I remember the Marks and Spencer at the top end of Taff Street as well. They have gone. I worry about those high streets, because I believe that the health of a constituency and a community can be judged by the high street.

In the constituency I represent, there are three major high streets: Risca, Newbridge and Blackwood. If anyone wants to visit Blackwood, it has a number of unique boutique shops. It has the Maxime cinema. If anyone wants to see the new James Bond film, “No Time to Die”, they will not find a cheaper ticket in town than at the Maxime cinema in the middle of Blackwood. We are not without our problems, however, and they come down simply to business rates. We have all heard from Members on both sides of the House that there must be some sort of reform. I have been in the House for 11 years. From the moment I came into this House, there have been campaigns on both sides of the House to save our high street. The former Chancellor George Osborne talked about tax simplification, yet here we are 11 years later, and still we face the problem of business rates, and they are still not being reformed.

I was interested in those contributions from the Government Benches that said that the Labour party in opposition must come up with an innovative solution to sort the business rates problem. I say to those Members: they are in government, so they have to come up with the solutions. I see some Government Members nodding to say that they have come up with solutions, and I will come to the points they raised. The simple fact is that we all know business rates need to be reformed.

I want to talk about a company in my constituency: Tidal’s Store, a fantastic family-run business that sells high-class, high-quality furniture. If any Member of the House wants to deck out their flats in London, or their houses—or, dare I say, for some Conservative Members, their mansions—they could not do better than going online and buying from Tidal’s Store. It is a fantastic shop in the middle of Blackwood. However, I went there three years ago, and the problem it had was business rates. At the top end of the town, it pays £330 a square foot for business rates. Go further down the town and businesses pay £300. At the bottom of the town, businesses pay £275 a square foot. They are all on the same high street. It does not make sense to me. To top it all off, there is a business park just below the high street where businesses pay just £50 a square foot. Those businesses taking advantage of those business rates are not the small, family-run, innovative companies, such as Tidal’s Store; they are the huge companies that can afford the business rates in town. It seems extremely unfair.

I touched on this issue with the Minister earlier. I went to the council. In fairness, I will give credit where credit is due to Caerphilly County Borough Council, its chief executive Christina Harry and their leader Philippa Marsden. They know this is a real problem for their high street and have been very supportive, but there is nothing they can do. All they do is collect the tax, yet if there is a complaint, it is Caerphilly Council that is taking the blame. I then went to the valuation office. It said to me, “Oh, we just set the rates, Mr Evans. We do not do anything about appeals. We cannot change the rate. The rate is set in stone.” Then I thought, “I will write to the Minister.” The Minister at the time, as a matter of coincidence, was the now Chancellor of the Exchequer. He wrote to me saying that there was nothing he could do. Is anything more frustrating than seeing a family-grown business, which I want to thrive, crippled by business rates that sometimes cost more than its rent? There is nothing I can do and no one we can go to. That is the frustration with business rates at the moment.

It is all very well for the valuation office to say that rates are set in stone, but in times of economic crisis or in a pandemic, we need flexibility. I say to the Minister, please, set up a system whereby businesses can appeal. They are crying out for help. We have already heard that there will be a review, but reviews take time. Many of these businesses are struggling and need help right now.

The other shopping centre in my constituency, Newbridge, is home to Newbridge rugby football club and world champion boxer Joe Calzaghe. Anybody who wants to visit an example of an art deco theatre would do well to come to Newbridge Memo and see for themselves how a working men’s institute has been taken over and become a thriving, beating heart of the community. But Newbridge faces the same problem: many shops are boarded up, which looks terrible when people walk down the street. Next Saturday, the Co-operative store in Newbridge will close its doors for the last time, which is very sad. We have campaigned to keep it in place. The next nearest Co-ops are in Oakdale, which is two miles away, and then further down in Machen in the constituency of my hon. Friend the Member for Caerphilly (Wayne David). People will not be able to shop for their groceries locally in Newbridge.

I was pleased when a local businessman contacted me and said, “I want to take over the business.” He owns a number of businesses so it would be an excellent move, but the one thing that was holding him back was, yet again, the business rates. As many hon. Friends have said, business rates in Wales are frozen currently, and I hope, for my English counterparts, that the Government take on board that example. There will come a time, however, when business rates will be unfrozen and will have to be paid. What future do people have when they know that time bomb is ticking?

The Government need to look again at business rates. People need help now. Right hon. and hon. Members on the Government Benches have talked about increasing VAT. There was a very good speech earlier about increasing it by 3p in the pound, but that is wrong for two reasons. First, VAT is an inherently regressive tax, because people are taxed on what they spend, which means that the poorest people in society pay it. Secondly, the packet of measures that was put in place in 2008 after the financial crash by the then Chancellor, Alistair Darling, included a reduction in VAT to ensure that people got out there and started spending in shops so that money flowed through the economy. Increasing value added tax is asking the poorest people in society to bear the burden.

When I was a child, as I said at the start of my speech, going to the high street was an event. We need to make it easier for people to go there. I ask the Government to put in place measures for local councils to offer free parking and, when shops are boarded up, short-term lets and business rate holidays to ensure that there are thriving businesses in the high street. There is much to be done. The high street—that feature of British society—is on the critical list. We have to do something now.