Simon Danczuk
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Simon Danczuk (Rochdale) (Ind)
It is a pleasure to serve under your chairmanship, Mr Chope. I thank the hon. Member for Fylde (Mark Menzies) for securing this important debate. I was not going to comment on charity shops, but I thought he made some extremely interesting points on them, some of which I have made in the past.
As chair of the all-party parliamentary small shops group, I regard these issues as very important. The high street plays an important part in the economic, cultural and social make-up of our communities. However, one of the single largest challenges that those on the high street face is the business rates they currently have to pay. That tax is completely out of touch with the economic reality, particularly in places such as Rochdale, where some businesses are paying bills that are three times their rent.
In the 2013 autumn statement, the Chancellor introduced business rate relief for a two-year period between April 2014 and March 2016. For the first year, that provided a discount of up to £1,000, which then increased by an extra £500. The scheme provided some much needed relief to more than 900 businesses in Rochdale, and it has had a tangible positive effect. Without it, some shops would have definitely gone under, and the total relief in Rochdale has been just more than £1 million.
I welcomed that proposal with open arms when it was announced, but it needs to continue. Unfortunately, businesses will be receiving a letter outlining that that support is to stop after 31 March 2016. I believe that that is a big mistake. Many of those benefiting from the relief have used it to invest in their shops and employ more staff. The money does not get diverted through some obscure offshore account; it gets spent in our communities, where it has a direct positive impact.
Rochdale has been leading the way with its own bespoke business rate relief scheme for new start-ups. In the first 12 months, the scheme provided an 80% rate relief. For the next 12 months, new start-ups were given a 50% reduction. Rochdale is now looking to extend the scheme for a third year and roll it out in the constituency of my hon. Friend the Member for Heywood and Middleton (Liz McInnes).
The scheme has provided much-needed support for constituents such as Dale Nugent, who runs Rochdale Mobility, a shop selling wheelchairs and mobility scooters for the disabled. Under the scheme, Dale has been paying business rates of just £2,000 a year, on top of his rent. However, that is set to end in March, and with the Government withdrawing their relief support, he will now end up with a business rates bill of £8,000 a year. That could put him out of business. Dale provides a vital service for many disabled people in Rochdale. His customers cannot just pop to Oldham or Bury as easily as other people. He is a good, friendly business owner; his customers like to pop in and have a chat with him, but because of the Government’s failure on business rates, his vital business could be in jeopardy.
The council tax relief scheme only provides a temporary fix and is limited in terms of helping to fill empty shops on key streets. We need a radical reform of the rating system. I support the recommendation from the Association of Convenience Stores that all small businesses should be removed from the business rates system completely. That would have two tangible effects. First, it would allow small businesses to increase their investment in their business, increase growth and thrive in their community. Secondly, it would reduce the current pressures facing the Valuation Office Agency and create a more efficient scheme for business rates collection. I would also like to see the ability for local authorities to vary their rates upwards as well as downwards, which they can do now. They could then, for example, increase rates on out-of-town sites and use that increase to offset rates on the main high street.
The hon. Member for Fylde made a number of important points about charity shops. We are set to see the complete devolution of business rates to local authorities. If local authorities are not given more freedom to set business rates—perhaps increasing them for charity shops or other shops—and to regulate the high street, the devolution is not really fair or adequate in terms of giving local authorities the powers they should have if they have the burden of carrying business rates. That is an important point. Another proposal that I believe would help the high street is reducing the periods between revaluations of business rates, which has already been mentioned. Five years is far too long, and three years might be more appropriate.
Finally, let me finish by saying that I do not agree with relaxing Sunday trading laws at all. There is no cultural, social or economic argument for it.