Draft Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2022

Peter Aldous Excerpts

Monday 12th December 2022 General Committees

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve with you in the Chair, Mrs Murray. I was not planning to speak today; I am actually a late substitute for a colleague. However, given that I am leading a Backbench Business debate in Westminster Hall tomorrow on business rates and levelling up, it is appropriate to say a few words.

First, I support the Government’s measures. It is right that a revaluation should take place next year. As the hon. Member for Luton North said, there is a need to carry out valuations more regularly. They should take place annually. My warning is that the last valuation date was April ’21, when we were in the middle of covid. We could argue that certain premises were virtually unlettable on that date, and I sense that there will be quite a lot of angst and appeals submitted by businesses. To overcome that concern, it is important that the Valuation Office Agency works with them, and is as transparent as possible. Secondly, we now have a business rate system with 12 forms of relief and support. Although they are all welcome, the system is becoming incredibly complicated. It needs root-and-branch reform.

The end of transitional relief is good news, because previously if a business was on a declining high street—there are lots of those around the country—although its rateable value would go down, it would not get the immediate benefit, because that would be transitioned in over a period of years. It is quite right that the Government should scrap transitional relief.

As I said, there is a need for root-and-branch reform. We look around for the holy grail of an alternative to business rates. I do not think that it exists, because from any Government’s point of view, it is a tax that yields a lot of money to the Treasury—probably £25 billion to £30 billion. It is much easier to collect than other forms of taxation, because ultimately people pay the local authorities, and it is difficult to avoid, because people cannot magic away their building. That said, the danger is that business rates do not reflect the profitability of a business.

The appeal of a digital tax, which the hon. Member for Luton North mentioned, is obvious, but the people we want to pay it would find ways of not doing so; we therefore would not get the full £25 billion to £30 billion. In the longer term, we need to build on the measures that the Chancellor introduced in his autumn statement; that includes getting the uniform business rate for everyone back down below the 50p-in-the-pound mark, probably towards the 30p-in-the-pound mark, which is where it was when the uniform business rate, in its current guise, came in during the early 1990s.

We then need to move towards annual reviews. That means digitising the Valuation Office Agency and making it far more transparent. Then the system will be more dynamic, and able to respond to the different, changing circumstances in the volatile economy that we have at the moment. I support the measures. The Chancellor grasped the nettle by the stem, but this should be only the start of significant root-and-branch reform, which we can bring in relatively quickly—by, I suggest, the spring Budget.