Business Rates Reduction Services

Peter Grant Excerpts

Wednesday 26th May 2021 Westminster Hall

[Peter Grant (Glenrothes) (SNP)]

I am pleased to begin the summing up in this debate. Like others who have spoken, it is clear that if there had not been other major attractions on elsewhere in the House, there would have been far more people wanting to take part in this debate. I presume that is why the hon. Member for Thirsk and Malton (Kevin Hollinrake) applied for the 90-minute debate. In normal circumstances, I think the 90 minutes would have been heavily over-subscribed. The initial title of the debate that appeared in the business last week made us in the SNP wonder if it was relevant in Scotland at all, as business rates, and everything to do with them, are devolved. However, it is obvious that the concern is not so much about how the business rates system operates in the different UK nations: it is about the regulation of business practices in general.

The hon. Member for Thirsk and Malton spoke very eloquently, and clearly on the back of a significant amount of work to find out his facts, for which I commend him, but he spoke about a problem that is not specifically about the regulation of one particular service; it is about business practices that are dishonest, predatory, unacceptable in any circumstances, illegal in many circumstances and, as Members have suggested, probably illegal in the circumstances that we have heard about today.

I believe that such practices should be illegal, and enforceable not only in the civil courts. There should be circumstances where this behaviour crosses the line and is recognised as criminal activity, so that the directors of the companies concerned can find themselves personally facing financial sanctions or even imprisonment for the damage that they are doing to other people’s businesses and livelihoods.

My concern about the way the hon. Member introduced the debate is that if we close down the opportunity for the shysters, to use his term, to exploit businesses by setting up fake business rates reduction schemes, it will not take them a week to find a new way to scam other honest businesses, or even the same honest business again—for example, the provision of telephone services. A long-established and very well respected household-name business in my constituency was brought close to insolvency by a telecoms scam. A business offered it a better deal on its phone systems than the one it already had.

Many of the practices that the hon. Member mentioned happened to my constituent, and to many others as well—contracts being changed, documents being taken away and never returned, and customers not seeing the contract that was being used against them in a court action. All the practices that will happen with dishonest business rates advisers will happen with dishonest telephone system salespersons, and with dishonest businesses in almost any sector of the economy that we look at.

Although I recognise that there are specific issues about the way that business rates reliefs and reductions operate that can provide an opportunity for dishonest so-called advisory services, we need to look at it much more widely than simply that one service. There are certainly legitimate questions about whether property valuation is the best way to assess businesses’ financial contribution to the whole community. There are legitimate questions about whether property valuation is the best way to tax individuals for their contribution to local council services. There are certainly questions about whether it is sustainable that those are the only two taxes that most councils can vary to any extent in order to fund their services.

Those are discussions for a different day, possibly after the economy has recovered from the shocks of covid and the subsequent lockdown. The difficulty that we face is that a lot of individuals have been persuaded to incorporate their self-employed microbusiness as a limited company, and they did not realise when they did it that they lost almost all the consumer protections that they had as an individual. I put it to the Minister that we might need to look at amending consumer protection legislation so that very small businesses have a degree of consumer protection in the same way that we do as individuals.

Individuals get consumer protection because it is recognised that we are smaller than the people trying to sell us stuff. We often do not have the resources. We certainly cannot afford the lawyers that some of them can. That is why consumer protection legislation was introduced and has been amended. Is it time to apply the same principle to very small businesses? Even though they are businesses, and all businesses in some ways are equal in the eyes of the law, do we need to start introducing special consumer protection legislation that applies to small businesses, regardless of whether they are incorporated? I welcome the Minister’s thoughts on that point.

For the record, when I have done some checks I have found at least one person called Stephen Hughes who has run property-related companies in the Greater Manchester area. There are obviously a lot of companies with RVA or very similar sets of initials in their names. We have to make it clear that companies and individuals who, simply by coincidence, have similar names to those mentioned today are, as far as we can tell, completely innocent of wrongdoing. Nothing we are saying here should be taken to impugn the integrity of anyone other than the specific individual and business named today.

I will bring my remarks to a close with a firm message for the Government: people who set up a business with dishonourable or dishonest intentions, simply to prey on legitimate, honest and hard-working small businesses anywhere in these islands, should not be allowed to trade. If they are still allowed to carry out their nefarious practices, regulation of those businesses is not strong enough—it has to be tightened, and it has to be tightened soon, before we see more valuable small businesses going to the wall.