Non-Domestic Rating (Lists) Bill

Roberta Blackman-Woods Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 17th June 2019 Commons Chamber

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

I am extremely grateful for the very incisive comments and questions to the Minister by my hon. Friend the Member for Sheffield South East (Mr Betts) and the hon. Member for Harrow East (Bob Blackman).

Labour supports this reform, not least because it is a part of our five-point plan for our high streets. Labour pledged in February 2017 to introduce more regular revaluations, coupled with simplifications in the business rate system. It is to be welcomed that the Government are at last finally getting on board with this essential reform, but the entire business rate system is in desperate need of comprehensive review. The Government’s consultation on the introduction of more frequent revaluations noted some challenges that are yet to be addressed, including: the increased workload resulting from this reform and the need for significantly skilled staff to undertake this work; and the possibility that the move will result in more appeals by ratepayers, placing additional pressure on the Valuation Office Agency.

According to the latest valuation tribunal statistics, there are still 65,000 unsolved 2010 appeals and councils have had to divert over £2.5 billion from services to deal with the appeals risk. How do the Government intend to deal with that? The explanatory notes state that the Bill’s provisions “may lead” to the Treasury providing additional funding to the VOA, but it does not guarantee to do so, even though additional valuations and perhaps more appeals arising from them will be required.

While we welcome the changes in the Bill, we cannot settle for this tinkering around the edges while the nation’s high street retailers are struggling so much. Nationwide, every type of retail premises—high streets, retail parks and shopping centres—saw the number of occupied units decline at a faster rate in 2018 than in 2017. The high street vacancy rate rose from 11.2% to 11.5% in 2018 and almost 5% of that vacant space has been empty for over two years, which demonstrates the scale of the challenge.

The Confederation of British Industry has warned that the current business rates system is entrenching regional inequalities:

“The lag between the area’s boom in property prices and its latest business rates revaluation has seen firms suddenly having to cope with an almost 50% increase in their bill.”

On the other hand, areas that have suffered from economic downturn, where major industries have left in recent years, have continued to require firms to pay higher business rates. It can also mean that local authorities are underfunded where businesses are on the rise.

These regional inequalities are entrenched by the business rates system in areas that have already had their finances worsened by the Government’s continuing austerity policies. Between 2010 and 2019, Knowsley, the second most deprived area in the country, saw a spending power cut of £1,406 per household. This is simply a disgrace.

Last month, the UK2070 Commission published research showing that the inequalities that blight economic performance and life chances in parts of the UK are likely significantly to worsen, with London “decoupling” from the rest of the UK unless drastic action is taken. The chair of the commission said that what the Government are doing is just a sticking plaster and that it is

“too small, short-lived or disjointed to have a lasting impact.”

When will the Government listen to business and deliver a wholesale review of the system? When, too, will they address the threats to retailers posed by their online competitors and ensure that businesses with physical shops are not at a disadvantage under the business rates system?

We look forward to the Government pressing on further with reform of the business rates system and to hearing what the Minister has to say.