Supporting Small Business

Matt Rodda Excerpts

Tuesday 19th October 2021 Commons Chamber

[Rachel Reeves]

I will come on to those points. It is great that Conservative Members are asking for advice, because we have plenty about how to level the playing field in taxes for businesses. I will come on to points about the global minimum rate of corporation tax, because that is how we can help to level the playing field.

The Chancellor must now complete the review and make the changes that the Government have promised. It would be quite astonishing if the Treasury had time to cost up the Prime Minister’s vanity yacht, yet no time to fulfil its pledge on something as important as reforming business rates.

The Minister may argue that everything has changed because of the pandemic. He would be right: everything has changed, including for businesses. The unfairness in the system has been enlarged, not narrowed, during the past year and a half. Almost 180,000 retail jobs were lost in 2020, according to the Centre for Retail Research, while some online retail profits have soared.

Fundamentally reforming business rates is more important now than ever before. I am sure that Members on both sides of the House would welcome confirmation from the Minister that the Government will take the radical action required, which is exactly what businesses are urging them to do in next week’s Budget.

Last week, 42 trade bodies wrote to the Chancellor making clear their view that

“in their current form, our business rates system is uncompetitive…and unfair.”

The British Chambers of Commerce are clear that tinkering around the edges will not do. The British Retail Consortium warns:

“Sky high business rates are closing stores up and down the country and preventing new ones from opening.”

[Matt Rodda (Reading East) (Lab)]

Does my hon. Friend agree that our retail centres face a very serious situation? Even thriving retail centres in towns such as Reading, which has the major retail centre for central southern England, are being affected. In our borough, 1,200 small businesses are currently receiving business rates support, which is unheard of. I encourage my hon. Friend to address that point. Does she agree that it is a serious issue?

--- Later in debate ---

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to follow the hon. Member for Devizes (Danny Kruger). I am grateful for the opportunity to speak this afternoon and I want to start by paying tribute to our small businesses across this country, first and foremost those in my constituency, which encompasses the town of Reading, its suburbs of Caversham and Emmer Green, and the separate town of Woodley, all of which have a thriving small business community covering many sectors. People from across the country are probably familiar with the strength of the tech industry in our part of the south-east of England, but, as was mentioned by the hon. Member for Wantage (David Johnston), whose constituency includes Didcot, we share with colleagues in south Oxfordshire a number of other vibrant sectors. We have a strong local university, a strong record on entrepreneurship, the growth of many SMEs and a growing population, with many people relocating to the Reading area, which we welcome. We are a diverse and tolerant community that welcomes people coming in. That is a great strength and small businesses are a great strength of this country, and I want to pay tribute to the shadow Chancellor for her speech today on the importance of supporting small businesses in Labour policy and in that of any political party, just as it should be. I hope the Government listen today to the excellent points that have been made all round about the need to end the current business rates regime and to move on to something much more sensible and appropriate. Thoughtful comments have been made by Members from across the House on that point.

However, at this time, it is fair to say that, despite the thriving nature of many small businesses across this country and in my area, SMEs face some serious challenges. The pressures and difficulties of the current business rates regime are one part of that, but there are many others. It is fair to say, without being overly partisan, that the Government could learn a lot as they look back at the pandemic and at a series of other policy choices they have made in recent times. In my experience, SMEs have suffered enormously in the pandemic. Like many Members from across the House, I have worked hard to try to support them. That support needs to be continued at this time, as we come out of the great difficulties we have had recently.

There are many other problems, some of them self-inflicted, such as the current supply chain crisis, which is obviously linked to the Government’s Brexit deal, and the national insurance rise, which is a tax on jobs, which nobody in their right mind would recommend as an obvious choice. Other challenges include the sudden economic shock of the move away from physical retail, and I want to discuss that later in my brief remarks. There are many other pressures on SMEs, and we need to look at those and think about how we can address them.

There are great strengths to build on. I am not quite going to be able to rival my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) in addressing the scale of the benefits of my town, but I will do my best in the few brief moments available. Reading is a booming medium-sized town, with a wonderful town centre and great history. It is an historic market town that goes back to Saxon times, as many people know. It has some wonderful buildings, more conservation areas than many towns of its size and many Georgian buildings. It was where Jane Austen went to school. It has the ruins of a wonderful abbey, which was once one of the biggest in the country. All of those are reasons to locate a small business in Reading, which has a pleasant working environment, history, culture, a fast train and excellent connections to London; the hon. Member for Devizes mentioned the importance of infrastructure to small businesses. We have a lot to build on; however, in my experience many small businesses in my constituency and, I believe, throughout the country are held back by issues such as the current business rates regime.

Let me mention a few other issues that hold back small businesses. There is a real need to look again at the national insurance increase. It is not the right time to do it. There must be other ways for those with the broadest shoulders to pay their fair share for necessary extra health and social care spending.

Education catch-up for young people who have been left behind because of the pandemic is a huge issue. There is a real economic link between that and the success of small businesses, as many young people are employed in SMEs in my area and, I am sure, throughout the country. I hope that the Government will do a lot more on the catch-up funding, which should be far more than something like £1 a day. The US and the Netherlands are spending more than £1,000 per pupil, with much more generous catch-up programmes, and Labour has pledged £14.7 billion for a much bigger scheme.

SMEs play a vital role in our economy and are contributing hugely in my area. There is great scope to build on and develop our historic town centres and to attract more replacement employment as retail contracts a bit. However, in my experience SMEs are held back by business rates. We need to scrap the current system and look at this issue again, and I urge the Government to do that.