Supporting Small Business

Debate between Paul Howell and Danny Kruger

Tuesday 19th October 2021 Commons Chamber

[Danny Kruger]

My hon. Friend is absolutely right. Of course we want a more diverse and plural high street; it does not need to be all retail. Residential should be part of the high street of the future, too, bringing footfall. He is right to highlight these institutions of belonging, civil society and places of gathering that enable people to come together and work together.

I applaud everything that is being done on spending, but I will say a word on tax. Of course business rates need reform, and there have been many helpful observations and contributions on that this evening. It is right that the Government have effected a reduction in business rates in recent years by raising the employment allowance, which is a significant tax cut for small businesses that I applaud, and it is right that we are reviewing the whole business rates system. I recognise the force of the argument for a digital sales tax and a global corporation tax, which are the right things to explore in the context of the new world of online retail, but I sound a note of caution and echo the point made by the Institute for Fiscal Studies that there is a point at which reducing business rates can actually be harmful. For finite resources such as land or space on the high street, reduced business rates can simply lead to rent increases, as we have seen. So we need to think about a reform that will not simply lead to benefits to landlords, with these not feeding into benefits for those businesses and with increasing inequality, without benefiting the Exchequer. That is not to mention the obvious need to compensate for this reduction in or abolition of business rates, as proposed by the Labour party, which has not yet explained how it would plug that enormous fiscal hole.

[Paul Howell (Sedgefield) (Con)]

Does my hon. Friend agree that there is the potential for a three-level look at this, as we have the high street, out-of-town shopping and online businesses? There are three different categories. My constituency has out-of-town shopping centres that are doing very well, thank you, but the high streets are in a very difficult place. To go back to his earlier point, may I remind him that the hope that railway stations—whether Devizes or Ferryhill—can give to local communities in developing—