Business Rates Relief: High-street Businesses

Stuart Anderson Excerpts

Wednesday 4th June 2025 Westminster Hall

[Stuart Anderson (South Shropshire) (Con)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I thank my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) for securing this debate. It would be remiss of me not to mention my right hon. and learned Friend the Member for Fareham and Waterlooville (Suella Braverman); as a rifleman, it is great to hear Waterlooville spoken about. The 95th Rifles fought there, and it was one of our battle honours. Every day is a training day.

This hugely important debate is relevant to every constituency up and down the country. I firmly believe that small businesses are the backbone of the UK economy. We must do as much as we can to release them from red tape and to reduce taxes, in order to see the great growth that will support our high streets.

After the autumn Budget, I set out across South Shropshire to speak to as many businesses as possible. I launched my small business campaign, which I was delighted to see Ludlow Nutrition win, and which showed me how much love there is for small businesses across the constituency. I recently held a roundtable with the chamber of commerce, which I thank for its work in bringing businesses together across the constituency to hear about the highs and lows and to hear what is working and what is not.

I wanted to go further, so I partnered with Love Bridgnorth and launched a local high street campaign. When it is finished, I will be delighted to share the results with the Minister so that he can see what local residents have said about high streets. What encourages them to come to the high street? What are the problems? What would they like to see from the Government? I have put those questions to thousands of people, and I look forward to seeing the results.

I want to talk about two core areas. One is retail shops on the high street, and the other is hospitality and local pubs, of which South Shropshire has some of the best. Local businesses are facing uncertainty because of the impact of the national insurance rise and the change to business tax. They are tending to do one of a few things: stopping recruiting, not investing in expansion to go for growth, or putting up prices, which can be inflationary. Those are all things that they do not want to be doing.

Earlier in the year, I got many of the local publicans together in Ludlow. The Minister has heard me talk about this before, but I really want to push Ludlow as the fine food capital of the country. The publicans told me what was working, what was not and what was hard. If Ludlow, with all its great pubs and its fine food festival, is struggling to make a profit, that is a concern. Some of those pubs have been trading for 20 years. They have the same footfall and the same turnover, or sometimes even more, but they cannot make a profit. It is not like covid or a financial crash; it is an ongoing situation that they are finding it exceptionally hard to deal with. They are not asking, “How do I survive?” They are saying, “I don’t know what the future looks like.”

I have spoken openly about how I have been teetotal for 13 years, because I used to drink way too much and had a problem with alcohol. So why am I talking about pubs? In South Shropshire, a constituency of 700 square miles, they are a lifeline. They are community assets. People would otherwise be sitting at home on their own come to them, because that is where their friendship groups are. They are a hub for much of our constituency. The other day, I enjoyed going to the George and Dragon at Much Wenlock. There is also the Mill at Leighton and great food at the Mytton & Mermaid in Atcham, where I have taken my right hon. Friend the Member for Stone, Great Wyrley and Penkridge before now.

I will not push my time limit, but I ask the Minister to look at reducing VAT to 12.5%, as we did through covid, to help out pubs and small businesses. I also ask the Government to reduce business rates back to 75% until we know what the new rates will look like.

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[James Murray]

I would challenge the right hon. and learned Lady’s use of language, but that issue is rather outside the scope of a debate on business rates.

As I was saying, we published a discussion paper at the Budget last year, which invited the industry to help us to design a fairer business rates system that supports investment and is fit for the 21st century. Since publishing the paper last autumn, my officials and I have met more than 250 stakeholders across a range of sectors, including RHL and local government, and have received submissions from a range of businesses, including those from the constituencies of hon. Members present today. We are analysing the responses in detail, and the data and views shared by businesses will inform the business rates policy development process. In the summer, we will publish an interim report that sets out a clear direction of travel for the business rates system, with further policy detail to follow at the autumn Budget 2025.

It is worth my briefly drawing hon. Members’ attention to the fact that, beyond the business rates system, the Government are taking other steps to rejuvenate our high streets. We are introducing high street rental auctions to revitalise our high streets and tackle empty properties, which we know can fuel a spiral of decline in town centres. Through the English devolution Bill, the Government will introduce a new community right to buy to help communities to safeguard valued community assets. That will empower local communities to bring assets such as empty shops, pubs and community spaces into community ownership, helping to revitalise our high streets and eliminate vacant properties.

Alongside that, the new £1.5 billion plan for neighbourhoods programme will deliver up to £20 million of funding and support over the next decade to 75 communities across the UK, laying the foundation to kick-start local growth and drive up living standards. As part of the programme, local partnerships will be able to fund interventions focused on revitalising high streets. The Government will announce further plans to support high streets in the small business strategy later this year.

As we have heard, hon. Members are rightly concerned about the high streets in their constituencies. We are all passionate about the places where we live and that we represent, and we want them to thrive. As I have set out, the business rates system that this Government inherited has been failing to give high streets the long-term, certain and stable support they need, instead providing only stopgap help through RHL relief that has kept changing and has been repeatedly extended ahead of an annual cliff edge.

This Government are fixing the foundations of the business rates system, and that starts with permanently rebalancing the burden of RHL properties through introducing permanently lower tax rates from 2026-27.

[Stuart Anderson]

I really like the idea of permanently lower tax rates. Can the Minister confirm that that is for all businesses, and that no businesses will receive tax rises?

[James Murray]

I thank the hon. Gentleman for his question. As I set out, the new lower multipliers of RHL properties will apply to all RHL properties with rateable values below £500,000. There will be a standard RHL multiplier and a small RHL multiplier for properties with rateable values of £51,000 and below. The definition of an RHL property will broadly follow the definition by which RHL relief is currently allocated. That will be set out in guidance, but hon. Members can expect that to operate in a similar way.

The advantage of our approach of permanently lower tax rates and multipliers is that they do not have a cap in the way that the previous Government’s relief did, of £110,000 per business. All properties within the RHL definition with rateable values of less than £500,000 will be able to benefit from this support, helping all the shops that contribute towards high streets across the country.

Beyond the changes to the RHL multipliers, I have also had the chance to set out some of the wider work that we are undertaking to transform business rates over the course of this Parliament and create a fairer, modernised system that is fit for the 21st century. I thank the right hon. Member for Stone, Great Wyrley and Penkridge and all hon. Members who have contributed to the debate.