Supporting Small Business
Debate between Huw Merriman and Pat McFadden(3 years, 1 month ago)
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Mr Pat McFadden (Wolverhampton South East) (Lab)
It is a pleasure to respond to this debate, and I thank all hon. and right hon. Members for the contributions they have made. I may not be able to mention them all.
My hon. Friend the Member for Sefton Central (Bill Esterson) talked about the challenges small businesses face. My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) talked with passion about her constituency and the importance of connectivity. She invited us all for a drink in Ye Olde White Harte, an offer I am very glad to take up.
From the Government Benches, the hon. Members for Bexhill and Battle (Huw Merriman) and for Thirsk and Malton (Kevin Hollinrake) took the St Augustine approach. They were all in favour of business rate reform, just not yet.
The hon. Member for Richmond Park (Sarah Olney) spoke of the plight of the travel industry. My hon. Friend the Member for Pontypridd (Alex Davies-Jones) spoke of the thousands of jobs lost in the music and creative industries, and of the help given to business by the Welsh Labour Government.
The hon. Member for Devizes (Danny Kruger) spoke thoughtfully about the importance of connectivity and the changing role of our high streets. The hon. Member for Stirling (Alyn Smith) spoke about how economic and consumer practices have changed through covid.
My hon. Friends the Members for Bradford West (Naz Shah) and for Vauxhall (Florence Eshalomi) spoke about the crucial importance of the wedding industry and the spin-off industries it gives rise to. My hon. Friend the Member for Islwyn (Chris Evans) spoke of his frustration, shared by many Members, of the baked-in variations in valuation, with no apparent process of redress or appeal. Every single Member who spoke in this debate spoke with passion about their high streets, their constituencies and the small businesses within them.
Huw Merriman
The point I would just gently make, on behalf of myself and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), is that we called for business rates to be reformed right now and indeed came up with a proposal that would cost it right now, too. I hope the right hon. Gentleman might reflect on that and come up with his own.
Mr McFadden
I am happy to talk about our proposals and the hint we got on what the eventual outcome might be.
We tabled this proposal because we want to support Britain’s businesses as they try to recover from the pandemic. Many physical retailers could not trade at all during the pandemic. Consumers changed their habits and went online. Our high streets were shuttered and closed. The problem of business rates is well known and has been for a long time: they are weighted against high streets; they are weighted on physical versus online businesses; and they create negative incentives for investment. If someone invests in their business, does the right thing and does their bit for the transition to a greener economy, their business rates actually go up. It is a 20th-century tax for a 21st-century economy.
Our calls for reform have met with widespread support from the business community. UKHospitality says that the biggest cost danger in sight for the hospitality sector is the reintroduction of business rates from 2022. The Federation of Small Businesses said that business rates
“hits firms before they’ve even made a pound in turnover.”
The CBI said that business rates are
“literally…a tax on investment”.
The British Retail Consortium found that without a reduction in rates next year, 83% of retailers said that it was “very likely” or “certain” that they might have to close stores. The Institute for Family Business has also backed this call.
In the short term, businesses need help. That is why our proposal, in the motion before the House, sets out positive steps that will help businesses right now: a freeze on business rates; an increase in the threshold for small business rate reliefs; and a proposal that is fully costed and fully funded.
The Government know that business rates need reform. That is why they launched a review 15 months ago, but where is it? Where are the conclusions? Where is the Chancellor’s plan on business rates? Has it not been published because he is fighting with No. 10 about it, as he is over climate change? Has he not published it because he is fighting with the Business Secretary, as he is on industrial support?
But we did get a clue as to what the preference of Government Members is, because many Members went for the Tory party’s three favourite initials: VAT. Time and again in Government, when they have needed to raise money, they have gone for VAT. We do not yet know what the conclusions of the business rate review will be, but the prospect of the VATman returning is certainly possible given the contributions that we have heard today.