Business Rates Relief: High-street Businesses

Debate between James Murray and Gavin Williamson

Wednesday 4th June 2025 Westminster Hall

[The Exchequer Secretary to the Treasury (James Murray)]

It is a pleasure to speak in this debate with you in the Chair, Ms Jardine. I thank hon. Members for their warm welcome.

I want to extend my thanks, as many others have, to the right hon. Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) for securing this debate—and, indeed, for his kind words about how I am doing my job. I thank all hon. Members for their contributions to the debate and for bringing perspectives from their constituencies to it. Although we have had a fair dose of politics, there have also, in fine Westminster Hall tradition, been moments of cross-party agreement and a desire to find a way forward to support high streets in all our constituencies.

As Members of this place, we all know how important high streets are to our constituents as centres of economic activity and places where people come together. I was glad to hear healthy competition in the claims about who has the best high street and local pubs in their constituency. [Interruption.] I am seeing further bids from the other side of the room. We all know as MPs, and indeed as members of the public in our own right, how high streets unite people. They sustain jobs and are central to the identity of the areas that we represent. That is why the Government are protecting the high street by transforming the business rates system so that it supports investment and is fit for the 21st century. I welcome this opportunity to set out our approach to making that transformation a reality.

As many hon. Members have said, retail, hospitality and leisure businesses are the backbone of our high streets—our shops, pubs and cinemas—but they are contending with changing consumer habits and have faced a series of economic headwinds in recent years, including the pandemic. Online services are undeniably convenient and offer great variety, but it is high streets that bring people together. The problem, as many hon. Members have set out, is that business rates fall more heavily on property-intensive sectors, so it is a priority for the Government to ensure that the burden is permanently rebalanced and that high street businesses are protected.

We inherited a situation in which protection for high street businesses through retail, hospitality and leisure relief was set to end altogether in April this year. That continued a pattern that had become normal under the previous Government; ratepayers would rightly complain that the fact that RHL relief ended every year by default created an annual cliff edge for RHL businesses. What was supposed to be a temporary, stopgap measure was extended year by year following the pandemic by Conservative Governments, who made no attempt to fix the system and give businesses the certainty and stability they need.

That is why at last year’s autumn Budget we announced our intention to change how this is done, by introducing permanently lower tax rates for RHL properties with rateable values below £500,000 from 2026-27. That will give much needed certainty and support to the high street, improving investment and growth in places across England. We intend to introduce two lower RHL multipliers to mirror the existing national small business and standard multipliers. The new small business RHL multiplier will apply to RHL properties with rateable values below £51,000, and the new standard RHL multiplier will apply to RHL properties with rateable values of £51,000 and above, and below £500,000. Those lower multipliers will apply to all RHL properties with rateable values below £500,000. We will have no cash cap per business as the previous Government’s relief had, meaning that all relevant properties will be able to benefit from our approach.

Under our Government, any tax cut must be paid for. We saw what happened when the previous Government ignored that rule. That is why we intend to fund this tax cut by introducing a higher rate for properties with rateable values of £500,000 and above. Those properties represent less than 1% of all properties, but include the majority of large distribution warehouses, including those used by the online giants.

The Government recognise that business rates form a significant part of the costs of some businesses, but we must make difficult choices to ensure that our plans to support the high street are sustainable. That is why we are asking those occupying the most valuable properties to contribute more to support the vitality of the high street.

The rates for new multipliers will be set at the Budget 2025, so that the Government can factor in the upcoming revaluation outcomes and broader economic and fiscal contexts into the decision making. The Non-Domestic Rating (Multipliers and Private Schools) Act 2025 gives Government flexibility in the creation of the new multipliers and their rates within appropriate guardrails, so that the Government do not have unfettered powers. The rate for any higher multiplier cannot be more than 10p higher than the national standard multiplier, while the lower RHL multipliers cannot be less than 20p lower than the national small business multiplier. I emphasise to Members that those are only guardrails, not the intended rates, and the final decisions on the multipliers will be made at Budget in the autumn.

The Government recognise that RHL businesses need support in 2025-26, ahead of the permanently lower tax rates being introduced for 2026-27. Hon. Members today have spoken about the impact of changes to RHL relief on high street businesses in their constituencies, but it is worth emphasising again that without any Government intervention, RHL relief would have ended entirely in April 2025. To avoid that happening, our Government decided to provide a 40% business rates discount to RHL properties up to the cash cap of £110,000 per business in 2025-26.

[Sir Gavin Williamson]

Will the Minister assure us that, given the cross-party agreement in the Chamber today, he will go back to the Treasury and make representations to see if that could be increased to 75% for the intervening year? It would be a great relief not just on finances but on the mental worry of so many businesses if they knew that someone in the Treasury was battling for the return of that 75% relief.

[James Murray]

The permanently lower tax rates will come in in April 2026, so the intervening year is the year that we are currently in. That rate has been set by the Chancellor. The Chancellor makes announcements about rates at fiscal events. The autumn Budget is where she sets out those rates, in the same way that she agreed, at the autumn Budget last year, what the rate would be for RHL relief for the current year, 2025-26. At the autumn Budget this year, she will set out what the permanently lower rates will be thereafter. I would say to businesses looking at their finances this year that from April ’26—from the next financial year—the permanently lower rates will come in. Indeed, it will benefit a broader variety of shops on the high streets, because we are not continuing the cash cap of £110,000 per business.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between James Murray and Gavin Williamson

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[James Murray]

I am very aware of the fact that we inherited an economy and a fiscal situation in a mess. That was completely unsustainable, and it was our duty as a Government to address it. No responsible Government could have let things carry on as they were, with the fiscal situation the way it was. That is why we took the action we did.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

Will the Minister give way?

[James Murray]

I will not, as I have already given way several times and must make progress.

We had to take those decisions to put the fiscal responsibility back at the heart of government, to return economic stability to the public finances, and to have the basis for the investment on which we can grow the economy and put more money in people’s pockets.

Lords amendments 1, 4, 5, 9 and 13 relate to the NHS and social care providers. The amendments seek to maintain the employer national insurance contribution rates and thresholds at their current level for NHS-commissioned services, including GPs, dentists, social care providers and pharmacists, as well as those providing hospice care. As Members of both Houses will know, as a result of the measures in this Bill and wider Budget measures, the NHS will receive an extra £22.6 billion over two years, helping to deliver an additional 40,000 elective appointments every week.

Primary care providers—general practice, dentistry, pharmacy and eye care—are important independent contractors that provide nearly £20 billion-worth of NHS services. Every year, the Government consult the general practice and pharmacy sectors.

--- Later in debate ---

[James Murray]

The various organisations or services that I am talking about, whether GPs, pharmacies or organisations that provide social care, receive money from Government, and the way that those discussions take place is by considering pressures on the providers of those services in the round—that is the way the negotiations take place. Direct support for employer national insurance contributions obviously applies to central Government, local government and public corporations, which is much the same way that the previous Government approached things under the health and social care levy. Pressures on social care or GPs, as I have been outlining, are considered in the round in terms of their funding settlements, and as I said, the £880 million of new grant funding can be used to address a range of pressures facing adult social care.

[Sir Gavin Williamson]

The hon. Gentleman makes an interesting point, but let us look at children’s hospices, which will be down £4.9 million. Most funding for children’s hospices does not come from the Government; it comes from communities and from people supporting them. Can the Minister, at the Dispatch Box, assure children’s hospices such as Acorns in the west midlands that they will not be down the money that they will be losing through extra NI contributions, and that that £4.9 million will be replaced by the Government for children’s hospices?

[James Murray]

I thank the right hon. Gentleman for mentioning hospices, and perhaps I may set out the Government’s position on hospices and some of today’s amendments. The Government recognise the vital role that hospices play in supporting people at the end of life, and their families, and they also recognise the range of cost pressures that the hospice sector has been facing over a number of years. We are supporting the hospice sector with a £100 million increase for adult and children’s hospices, to ensure that they have the best physical environment for care, and £26 million of revenue to support hospices for children and young people. The £100 million will go towards helping hospices to improve their buildings, equipment and accommodation, to ensure that patients continue to receive the best possible care.

--- Later in debate ---

[James Murray]

The £100 million that the right hon. Gentleman alluded to is important funding to help hospices improve their buildings, equipment and accommodation, to ensure that patients receive the best care possible. As I said a few moments ago, there will be £26 million of revenue to support children and young people’s hospices. More widely, the Government provide for charities, including hospices, through the wider tax regime, which is among the most generous in the world. That included tax reliefs for charities and their donors worth just over £6 billion for the tax year to April 2024. Finally, as the right hon. Gentleman will know, all charities, including hospices that are set up as charities, can benefit from the employment allowance that the Bill more than doubles, from £5,000 to £10,500. That will benefit charities of all sizes, particularly the smallest.

[Sir Gavin Williamson]

The Minister knows that that is funding for one year, and mainly for buildings, as he has admitted. This will be a cost on hospices every single year going forward. It will be cumulative and mean that hospices have to ask their communities for more and more, just to give that basic help. Will he commit to funding children’s hospices by the £4.9 million that the Government are taking off them every year, or not—yes or no?

[James Murray]

The points I was making before I gave way to the right hon. Gentleman are recurrent features of the tax system. The support through the tax regime for charities and their donors, which was worth more than £6 billion in April 2024, is a feature of the system that happens every year. The increase in the employment allowance from £5,000 to £10,500, which will benefit hospices that are set up as charities, is a permanent change that we are making through the Bill.

Oral Answers to Questions

Debate between James Murray and Gavin Williamson

Tuesday 21st January 2025 Commons Chamber

[James Murray]

As I have set out, the UK CBAM will mitigate the risk of carbon leakage by placing a carbon price on some of the most emissions-intensive industrial goods imported into the UK, including in the iron and steel sector. The UK CBAM is designed for the UK context, and in some areas, its emissions scope is wider than the EU CBAM—in respect of indirect emissions, for instance. The first CBAM industry working group was held earlier this week, and I understand that a representative of the UK steel sector attended. I will make sure that my officials continue to engage with the industry sectors most affected, and I am very happy to discuss this further with my hon. Friend.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

Heavy industry, whether it is steel, ceramics or so many other areas, is totally dependent on low energy costs. The trajectory is that energy costs are rising, especially in industry, whether as a result of regulation or world markets. Many other countries are doing more to protect their heavy industries by making sure they can have low input costs for energy. What more can the Minister do to protect our heavy industry in the future?

[James Murray]

The No. 1 thing for industry and households is to bring down the cost of energy. That is why we are investing in renewable home-grown energy for the future, to make sure we have energy independence, energy security and, crucially, lower bills for those households and businesses.

Farming and Inheritance Tax

Debate between James Murray and Gavin Williamson

Wednesday 4th December 2024 Commons Chamber

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

The hon. Gentleman has made an important point, but analysis will show that over a 10-year period, 99% of the profit from the average 350-acre arable farm owned by a couple will go back towards paying inheritance tax. That does not leave enough money for them either to invest or to live. I wonder how the hon. Gentleman thinks they can deal with that.

[James Murray]

I have confidence in the way in which we have calibrated the policy. As I said to the right hon. Member for Salisbury (John Glen), it has balanced the need to retain significant, generous provision of inheritance tax relief for family farms with ensuring that, at the same time, we fix the public finances in the fairest way possible.