Business Rates

Damian Collins Excerpts

Wednesday 4th December 2013 Commons Chamber

[Andrew Griffiths]

I am always prepared to listen to anything that might support the great British pub, but as the hon. Gentleman is from the party that introduced the hated beer duty escalator and the smoking ban, he needs to think long and hard about what he can do to support British pubs.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend agree that as Labour’s policy is barely worth more than £1 a day to businesses to which it will be offered, they would have to be pretty small beer indeed to get any value out of it?

[Andrew Griffiths]

I completely agree with my hon. Friend’s point. I also agree with those made by the hon. Member for Sheffield South East (Mr Betts) and, interestingly, by the hon. Member for Corby (Andy Sawford) on the speed of appeals. That issue is important because two thirds of pubs have appealed their business rates, and half of those decisions are still outstanding. Such delays can have a massive impact on small businesses that are really on a knife edge in terms of profitability and sustainability.

As I have said, the Minister is a passionate supporter of the great British pub and wants to lead a regeneration of our high streets, so will he take on board my three small points, pick up the phone to the Chancellor and do something to support our pubs?

--- Later in debate ---

[Bill Esterson]

That is absolutely right. We have seen a massive growth in the number of small businesses. We now have 4.9 million businesses in this country; 40 years ago the figure was only 1 million. Of those 4.9 million, only 200,000 employ 10 or more people, while the vast majority employ a small number of people or are sole traders. For those businesses, a few hundred pounds makes all the difference and is a huge contribution. We were talking earlier about the difference that a small amount of money invested by a local authority makes, and the same is true when the money goes directly into the pockets of small business owners.

[Damian Collins]

Does the hon. Gentleman accept that the cut to national insurance contributions, which is introduced in April and is worth £2,000, is worth considerably more than this policy from the Labour party? What we are asking for in this debate is a bit of context. Labour Members—the hon. Gentleman is in danger of falling into this trap—are presenting a relatively small initiative as some panacea to help small businesses, when it will do nothing of the sort and is small when compared with other measures that the Government have put in place.

[Bill Esterson]

No, I do not think our policy is a panacea; I think it is an important initiative that would give support directly. Members were talking earlier about how we would pay for the measure by not introducing the 1% cut in corporation tax and how that money would feed through into small businesses, and this point is similar, because what small businesses need is direct help. Expecting that support to feed through indirectly through the economy means it will take much longer to help. The help is needed now; that is why our proposal is so important. I hope that hon. Members will support my hon. Friend the Member for Chesterfield and his motion tonight.

--- Later in debate ---

[Damian Collins (Folkestone and Hythe) (Con)]

Throughout this debate, the Opposition have promoted an idea that seems to suggest that big businesses live in a totally separate world from smaller businesses. When the major employers in my community, such as Saga, Dungeness power station and Eurotunnel, do well, do the small business community say, “What’s that got to do with us? It’s no concern of ours”? They do not, because they understand that the employees of large businesses are the customers of small businesses, that large and small businesses have a customer-supplier relationship and that the strength of the whole local economy is vital. That is why we take issue with a “rob Peter to pay Paul” exercise whereby the revenue for a very small, temporary tax cut for one sector of the business community is raised from another area of the business community. That is what the Labour party proposes to do.

As I said earlier, the cut is small. A cut in business rates that is worth barely more than £1 a day will not answer business people’s concerns about the business rating system. Members across the House have made good calls for a sensible look at reform. I was pleased to hear the Minister say that the Government are about to launch a review and are looking at the appeal system. I hope that we will be able to welcome news from the Chancellor of the Exchequer of smaller increases in business rates for the years ahead. As the structure of the economy changes and more businesses become part of the digital economy, with smaller industrial footprints and a different business model from that of the past, it is of course right that we look at these systems again.

The Chairman of the Communities and Local Government Committee made the point well in his very interesting speech that we should look at the town centre economy and how we can have a system that encourages investment and businesses to go back into the town centres. They may never be what they were in the 1950s—a purely retail environment where people did all their shopping—but we can get different types of businesses back in there.

The Government’s reforms to the business rating system, which encourage local authorities to promote more business activity in their areas and give them for the first time a financial stake in the success of the local business community, must be a good thing. Asking local councils to use the powers that they already have to create what are almost micro-enterprise zones and to give more discretionary relief to businesses in town centres and encourage more activity is exactly the right thing to do. We would support any measure that seeks to extend and look at other opportunities to reform business rates in that way.

The hon. Member for East Antrim (Sammy Wilson), who has great knowledge of the economy in Northern Ireland, said in an intervention that business rates are an important issue but that they must be seen in the round of the balance of other measures as well. The Government have introduced a series of measures that will help the small business community, not least the £2,000 cut in employers’ national insurance, which starts next April and is worth more than four times the Labour party’s proposed measure on business rates.

Labour Members have almost completely ignored the investment coming into regional economies through the regional growth fund. In east Kent, the £40 million regional growth fund is making a big difference to the local economy. Grants made through the county council to large and small businesses mean that they are employing people today. Grants are also helping businesses that are otherwise struggling with bank lending to get to the next stage and invest in their future growth.

Such measures, alongside targeted ones to support small businesses, are making a big difference, as is the ability to look creatively at how we can encourage more incubators for businesses, support more pop-up shops and give people starting their own small business the chance to get on to the high street and into physical premises sooner. All those initiatives are welcome, and taken in the round, they are strengthening our economy. For Labour to pick one very small measure and pretend that that makes it the party of small business is absurd.