Local Government Finance Act 1988 (Non-domestic Rating Multipliers) (England) (No.2) Order 2021

James Murray Excerpts

Tuesday 25th January 2022 General Committees

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to serve under your chairship for the first time, Mrs Miller.

As we heard from the Minister, we know that national non-domestic rates are calculated as the product of a hereditament's rateable value, as determined by the independent Valuation Office Agency, and the relevant multiplier. The small business non-domestic rating multiplier applies in relation to hereditaments with rateable values of less than £51,000. The national non-domestic rating multiplier applies in relation to hereditaments of £51,000 or more. We understand that the delegated legislation effectively maintains the non-domestic rating multiplier rates in the financial year 2022-23 at the same level as they were in 2021-22 in relation to the payment of business rates.

The Opposition will not oppose the SI, but I have a few small points to raise. The impact assessment in the explanatory memorandum notes that no impact assessment has been made of the order because

“it amends a local tax regime”,

and because businesses, charities, voluntary bodies and public and private sector entities will not see an increase to their rates. However, we know that inflation is at its highest level in decades, and businesses continue to face challenges associated with the pandemic. What assessment has the Minister made of the recovery of UK businesses? Can she outline what further support her Government will offer businesses that are still struggling?

Furthermore, the explanatory memorandum notes

“The operation of this instrument will be monitored and reviewed as part of the operation of the national non-domestic rates system as a whole.”

I would be grateful if the Minister outlined the detail of that review process.

Of course, we in the Opposition have set out our broader position in relation to business rates. We would scrap the current system and replace it with a fairer system in the future. On a wider point, we are disappointed that the Government have abandoned their promise to review business rates fundamentally. However, we will not oppose the SI and we welcome any benefit that it is able to bring to businesses at this difficult time.

[Lucy Frazer]

I thank the hon. Gentleman for saying that the Opposition will not oppose this sensible measure, which will support and protect businesses. As he rightly said, there was no need for an impact assessment for the reasons that he outlined. If we were to conduct one, of course it would show that the proposal is hugely beneficial to businesses, which will not be paying a significant amount of business rates that they would otherwise pay. They can therefore use that money in their own businesses, benefiting the economy.

The hon. Gentleman asked me to outline the support that we are giving to businesses. He will know that in the past 18 months, we have given significant support to businesses through the provision of loans and grants, and he will have seen the extensive measures contained in the Finance Bill that we had the pleasure to debate together. They include not only the multiplier that we are debating today, but the business rate relief, the investment allowance and a number of other measures.

On business rates, we did a review of those rates and as a result made changes that will benefit businesses to the tune of around £7 billion. But that is not all we have done. The hon. Gentleman will know that we announced our intention to review the online sales tax. That will be conducted shortly.

[James Murray]

To clarify, I asked about the detail of the review process of the SI. The explanatory memorandum says

“The operation of this instrument will be monitored and reviewed as part of the operation of the national non-domestic rates system as a whole.”

I am sure the Minister has a copy of the explanatory memorandum. Can she outline the detail of that review process?

[Lucy Frazer]

As the hon. Gentleman will know, we keep all our taxes under review. The SI will be reviewed in due course, and I would be happy to update him when any such reviews are undertaken.

I commend the order to the Committee.

Question put and agreed to.