Toby Perkins
Main Page: Toby Perkins (Labour - Chesterfield)
Toby Perkins (Chesterfield) (Lab)
I beg to move,
That this House recognises that the cost-of-living crisis is affecting businesses as well as families; notes that business rates have been rising and are due to increase further in April 2014, due to their link to the 3.2 per cent Retail Price Index increase in September 2013; and calls on the Government to take action to ease the burden of business rates on all sectors.
It is fitting that this debate should take place in the week leading up to small business Saturday, which has been so innovatively brought to the United Kingdom by my hon. Friend the Member for Streatham (Mr Umunna), and so graciously supported by the Prime Minister and the Secretary of State for Business, Innovation and Skills. It has become a truly cross-party initiative and a cross-Britain campaign. It says much about what we can achieve when the whole political and business world work together in support of Labour party ideas.
As the challengers of tired orthodoxies and the drivers of social mobility, small businesses share one nation Labour’s values completely. In fact, we could say that small businesses and one nation Labour share the same DNA. That is why my right hon. Friend the Leader of the Opposition said that one nation Labour would be the party of enterprise and small business when he became party leader back in 2010. Just as there is a lineage from owners of small businesses through to one nation Labour, the Conservative party, the party of old money and vested interests—it has an average age of 67, I am told—is inextricably linked to the defenders of the status quo. That is why Labour has led the running on the No. 1 cost of doing business issue, business rates, and why we have brought forward this debate.
Today is not the first time that Government policy has suddenly changed in the run-up to a Labour party Opposition day debate. Let us be honest—barely a day goes by when this Government’s policy does not change. The Chancellor’s pre-announcement today that business rates would go up by only 2% this year will be met with a mirthless smile by the thousands of small firms that told the Forum of Private Business, among others, that business rates is the No. 1 cost of doing business issue.
A measure of how detached the Government have become from the realities faced by businesses away from the City is that after three and a half years of small business rate relief, which is a valuable support for the very smallest, and with business rates still the No. 1 issue—13% of all firms say that the tax they pay on their business premises is greater than the rent, and many more find that it is pretty much the same—they announce that they are locking in that unfairness by capping rates at 2%. It is absolutely pathetic. Only the Government, who tried to sell an extra £70 on people’s energy bills as a cut, could think that a 2% rise in business rates is a cause for celebration—they could not be more out of touch.
Some of the Government’s policies seem to be dreamed up at a moment’s notice, but the announcement on business rates comes 71 days after my right hon. Friend announced the action that Labour will take on business rates. It is not even a rapid rebuttal. After all the speculation, it is no wonder that businesses are asking whether this is really it. We know that the Government are useless on this issue, so let us talk about the alternative—Labour’s proposal for real action.
We propose not a reduced increase, but a reduction of £410 a year on average for the 1.5 million businesses that have a rateable value of below £50,000. That will be followed by frozen rates in the year after that.
Sammy Wilson (East Antrim) (DUP)
This is an important issue. I accept the hon. Gentleman’s point that for many businesses, their rates are higher than their rent. However, in Northern Ireland, we have frozen rates for the past seven years, given half of small businesses a 20% reduction in their rates and provided a 70% reduction in manufacturing rates, but still some businesses are under pressure. Rates are only one aspect of the problems that face businesses. We need a much more comprehensive approach to deal with those problems.
Toby Perkins
I am grateful to the hon. Gentleman for that point. He is right that business rates are only one aspect of the problems, but they are clearly a very important aspect because businesses say that they are the No. 1 cost of doing business issue. He is right that we need to go further, but on that basis, this pitiful move by the Government is very disappointing indeed.
Mary Macleod (Brentford and Isleworth) (Con)
The hon. Gentleman has been to my constituency in west London. What would he do for businesses in London, because their business rates are high, but their rateable values are higher than the limit that he has set out?
Toby Perkins
That is an interesting point. I went to a newsagent in the hon. Lady’s constituency which certainly will not be paying business rates above the level that we have set. The vast majority of businesses will be below the £50,000 level. This policy is a significant step that will affect 1.5 million businesses. Every time we hear from Conservative Members, it is clear that the only voices in their ears are those of big business. They do not understand the reality of small businesses. That is coming across loud and clear once again today.
Even after today’s announcement, the bills this year will still go up by about £250, and that is when we are supposedly seeing action.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will my hon. Friend give way?
Toby Perkins
I will give way to my hon. Friend, but I will not take too many interventions because I am conscious that a number of Members want to speak and I want them all to have the opportunity to do so.
Seema Malhotra
The British Retail Consortium has estimated that the business rate increase in April could mean that there is an increase of £240 million per annum, which could put more than 19,000 full-time jobs at risk. Does my hon. Friend share my concern that that will have a detrimental impact on retailers in our constituencies?
Toby Perkins
Absolutely. The statement by the British Retail Consortium is incredibly powerful because its members are telling it every day how important this issue is. That is why it is important that we see serious action.
Toby Perkins
I will make a little more progress, then I will let the hon. Gentleman come in.
British businesses will face a choice as we approach the next election between a Tory party that makes hollow gestures of this sort and a Labour Government who will offer them vital respite. Labour’s business rate cut is even more important than that; this is an important symbolic moment because a potential party of government is at last saying that enough is enough on business rates. That comes at a time when research by the British Council of Shopping Centres shows that Britain pays the highest rate of commercial property tax in the EU.
By contrast, we are set to have the lowest corporation tax in the G20 by 2015. Labour understands the importance of a competitive corporation tax rate. It might interest Conservative Members to learn that the biggest increase in corporation tax in the past 40 years was introduced by—I cannot hear the correct answer—Edward Heath in 1973. [Interruption.] It is true. In fact, no Labour leader has increased the main rate of corporation tax since then. For comparison, at the zenith of Thatcherism, in 1987, the main rate of corporation tax was 35%. The big cuts under the Labour Government saw it fall to 28% under my right hon. Friend the Member for Edinburgh South West (Mr Darling).
Mr Brian Binley (Northampton South) (Con)
Having been inspired by Margaret Thatcher to start two businesses, and having seen those businesses grow to now having almost 300 employees, but having suffered massively under a Labour Government, may I tell the hon. Gentleman that small business does understand what Labour does and knows what happens when we have a Labour Government? Things become much more difficult, and it becomes much harder to survive.
Toby Perkins
That is one viewpoint, but that of someone who has not seen an opinion poll recently, I think. Let us not hear anything from Conservative Members to suggest that Labour is the party of corporation tax rises, as history tells us that that is not the case.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
It is also worth reminding the Conservative party that it invented VAT, which has increased under every Tory Government since. No Labour Government have ever increased VAT. We also have to understand that since 2011, investment in small and medium-sized enterprises has decreased by £30 billion.
Toby Perkins
My hon. Friend makes an incredibly important point. He will remember, as I do, the Liberal Democrats’ posters and the Conservatives’ promises that there would be no VAT increases. He might well remember that the Chancellor, when he was shadow Chancellor, claimed that Labour would increase VAT and that it would be a bomb waiting to go off under the recovery. Of course, the Government then introduced the VAT rise before there was any kind of recovery, which is one reason why we have had three wasted years.
Yasmin Qureshi (Bolton South East) (Lab)
Is my hon. Friend aware that a recent business survey by the Forum of Private Business found that action on business rates was small companies’ No. 1 demand, and that John Allan, the chairman of the Federation of Small Businesses, has welcomed Labour’s consistent argument and demand for a freeze on business rates?
Toby Perkins
That is an incredibly important point. When Members take interventions, we often worry that it will add to the length of our contributions, but when they include things that we were about to say, it saves us all a bit of time. I am grateful to my hon. Friend for that point.
Toby Perkins
I am going to make a bit more progress. A large number of Members wish to speak, which makes it clear how important the issue is.
Our proposal is not to increase corporation tax from the current rate but simply not to take forward the planned 2015 cut, instead using all the money planned for that to reduce the business rate burden.
The Government have tabled an amendment to the motion, the final line of which states that the House
“rejects the policy proposals from Her Majesty’s Opposition on rates which would involve increasing corporation tax on all firms”.
That is what Government Members will be asked to vote for. First, under our proposals the rate would still be lower than it is today. More importantly, it would alter the corporation tax rate only of businesses that make more than £300,000 of profit. Government Members might well think that every single firm earns more than that, but I can tell them that 80,000 businesses would be affected out of a total of 5 million in the UK. That is just over 1.5% of all the businesses in the UK, not “all firms” as the Government’s amendment states. If they think that 1.5% of firms is “all firms”, they are either incompetent or totally out of touch. I suspect that it is both.
Toby Perkins
For some reason, on the subject of incompetence, the hon. Gentleman wants to intervene.
Richard Fuller
I am extremely grateful for that nice introduction.
I draw the House’s attention to my registered interests. I am a director of a small technology business and of a manufacturing business. The Government are still dealing with the deficit that the hon. Gentleman’s party’s Government left, and money is therefore scarce. For every element of taxation that he wants to reduce, the money would have to be found from elsewhere. How would Labour’s proposal help technology and manufacturing businesses, which are surely what we need to secure growth in the economy, rather than retail?
Toby Perkins
It is interesting the hon. Gentleman says that, because the point is that our business rate proposal was announced at the same time as we said how it would be paid for. It is the principle of ensuring that we do not make commitments unless it is clear how we will pay for it—in this case, the corporation tax cut is not being taken forward, and that will pay for the business rates. The Chancellor has just announced that he will not increase business rates, but I would be interested to hear from Government Members whether he will make it clear how that will be paid for. We have had numerous policies so far from this Government that seem to be just sticking it on the deficit.
Mr Clive Betts (Sheffield South East) (Lab)
My hon. Friend has made an important point because as well as small businesses, local authorities are under real pressure. Can he assure the House that his proposals will not reduce by one penny the money going to local councils?
Toby Perkins
I absolutely give my hon. Friend that assurance. It is entirely costed and there will need to be a reworking of the Budget to ensure that local authorities do not miss out. The other important point is that, as my hon. Friend will be aware, the Government amendment refers to the fact that local authorities can reduce business rates if they want. The idea that we can give local authorities huge cuts and say, “Well, if you want to reduce business rates, you can”, bears no relationship to the reality of local authority finances in many areas.
Toby Perkins
I will crack on a bit and then I will happily take a few more interventions. I am conscious of the time.
Toby Perkins
Because he has been so persistent I will give the hon. Gentleman the chance to intervene and then I will crack on. I have a feeling we will now hear an intervention of considerable importance.
Nick de Bois
I am grateful for the hon. Gentleman’s introduction, but he might like to ask his constituents whether or not my intervention is important. He complains that councils do not have the money to offer rebate—which, incidentally, is subsidised up to 50% by councils for offering a discount—but his own council in Chesterfield has failed to collect £4 million in council tax. If it made a bit of effort, perhaps it could get some of that back to business rates.
Toby Perkins
That is a disgraceful point given the cost of living crisis facing many of our people who are desperately struggling. The idea that it is the council’s fault if it is struggling to raise money from people in my constituency is absolutely remarkable.
Toby Perkins
I will make progress because interventions are not taking us anywhere. Our policy is clear: to reduce the business rate bill for 1.5 million small firms and ask 80,000 larger firms to pay what is still historically low corporation tax, even if it is slightly higher than the Government propose. That choice says a lot about Her Majesty’s Opposition, and the fact the Government reject it says everything that people need to know about them and the kind of economy that they want Britain to have.
The Government seem to be sending the message that they welcome firms that move their books here, but not their staff. They are discouraging those who want to build, work, base themselves or run shops here—a tax haven for the few, not a balanced economy for the many. Encouraging speculation and discouraging production: that says it all about a Chancellor and Prime Minister who have ears only for one section of the business community, not the real-life heroes in shops, workshops, factories and building sites who make up the real economy that they appear to know so little about.
One business woman who attended our recent business consultation in Plymouth put it rather well. She said:
“I don’t mind paying tax on my profits, but what I do object to is when I am struggling to get by and the Government keep putting up the bills on my premises. Let me make some profit and I’ll gladly let the Government share a little of the wealth.”
I could not have put it better myself. That is the reality of what businesses out in the community are saying.
Caroline Lucas (Brighton, Pavilion) (Green)
It is kind of the hon. Gentleman to give way and I support his motion, especially since vibrant and independent businesses in Brighton always tell me what a big challenge business rates are. Does he agree that since some of the smallest businesses are suffering the most, one thing the Chancellor could do tomorrow is increase the threshold for tapered relief to be funded—for example, from £12,000 to at least £15,000—so that more small businesses could be given some relief from those rates?
Toby Perkins
There are strong arguments in favour of increasing the threshold from £12,000 to £15,000 to help businesses, but the great thing about Labour’s policy is that it will benefit businesses right up to £50,000. Government Members do not think that that is relevant to businesses, but the reality of our economy is that it is very relevant indeed.
Recent studies by the Association of Convenience Stores, which has a huge army of owner-shopkeepers among its membership, underline the point and tell the full tale. Small shopkeepers are among the hardest-working people in our country. The majority work over 50 hours a week, often many more, and their shops are a vital part of towns and villages in every community across the country. Some 55% of its members say that their average earnings last year equated to less than the minimum wage, yet the average store has a rateable value of £14,000. So go and tell them that the Government are taking action—tell them that another 1% off the corporation tax rate for big business is more important than cutting their business rates nightmare.
Huw Irranca-Davies (Ogmore) (Lab)
Does my hon. Friend agree that there is another way that we could help these small businesses, whether Travella, the outfitters shop on the square in Maesteg, or the Talgarth bakery? Taking action on business rates is one way—and imitation is the best form of flattery, I say, as the Government try to mimic, in a pale way, what we are doing. Another way is to freeze the energy costs, which would save those businesses around £5,000 on average.
Toby Perkins
Absolutely. My hon. Friend accurately predicts a future part of my speech, which I might none the less give Members the benefit of, as the facts on energy prices are worth repeating and this is an incredibly important point.
Not by accident, one-nation Labour is in touch with the issues that small firms are facing. We have gone out of our way to ensure that the voice of entrepreneurial Britain is not only heard, but spoken by Labour. Around 1,000 businesses attended Labour’s business reception this summer, and from Harlow in Essex to Stockton in Teesside, we have listened to thousands of firms of all sizes.
It is incredibly important to me as a former small business owner to be Labour’s small business shadow Minister. There is a wealth of private sector experience across the shadow business, innovation and skills team, but I am excited that Labour will fight the 2015 election with many more strong business voices standing for election in our colours. From internet entrepreneur Victoria Groulef in Reading West and educational solutions entrepreneur James Frith in Bury North to business owners such as Sophy Gardner in Gloucester and Emily Darlington in Milton Keynes, the face of Labour will reflect that enterprise spirit that embodies what one-nation Labour is all about.
Bill Esterson (Sefton Central) (Lab)
As another former business owner, I can guarantee my hon. Friend that the Labour party really does understand that the face of business in this country has changed. That is why this debate is so important. Government Members do not seem to appreciate just how many more businesses there are these days compared with when the business rate regime was set up. [Interruption.] That is why this debate and my hon. Friend’s proposal are so important. [Interruption.] The challenges of online trading and the number of businesses mean that we have to address this crucial issue not just on the high street but for businesses as a whole.
Toby Perkins
That is a powerful point, and it is revealing that when my hon. Friend talks about the reality facing those small businesses he faces barracking from the Government Members. They do not understand the reality of businesses in our communities, and they make that clear every day.
Susan Elan Jones (Clwyd South) (Lab)
I find it rather disheartening that Government Members seem to downplay retail. Will they also downplay village shops, which are closing probably at a faster rate than ever before? This measure from the Labour party will prove a real lifeline to them if we are elected to government.
Toby Perkins
That is a vital point. In rural communities, village shops are absolutely crucial, and as Members have just heard, research from the Association of Convenience Stores says that many of the people who serve us in those stores are literally living in poverty. That should serve to show Government Members the reality of what is happening.
There is an inconsistency at the heart of the Government’s approach. They believe that the market decides and they do not believe in the role of government. That is why they scrapped the regional development agencies, which delivered and had real scope and expertise. That is why they scrapped Business Link, which was a useful single point of contact, and left businesses in need of support to fend for themselves. I do not pretend that Business Link or the RDAs were perfect, but they needed reforming, not scrapping, and the void left in their place has been one of the causes of the three wasted years of flatlining that we have seen since 2010.
Local enterprise partnerships have spent much of those three wasted years trying to make it clear what their purpose is, and the Government’s “mentors me” website has received four times more visits from firms offering to be experts than from people who need expertise. That says absolutely everything about how effective the “mentors me” website has been.
Mr Brooks Newmark (Braintree) (Con)
I am interested in the hon. Gentleman’s analysis. If the country has been flatlining, can he explain why 400,000 new businesses have set up since 2010?
Toby Perkins
The important question is this: how many of those businesses have gone under? In every recession, large numbers of people are unable to find a job, and they go on to set up their own businesses. I set up a business under similar circumstances—desperation is a pretty decent motive for setting up a business. The reality is that we have had three years of a flatlining economy and difficult circumstances. The hon. Gentleman might not be able to understand that, but the people in my community certainly do.
Tom Blenkinsop
Is my hon. Friend aware of the comments made by Hans Redeker from Morgan Stanley? He said:
“the UK recovery will turn out to be little more than a sugar rush unless investment picks up… The investment-to-consumption ratio is very low at 16% and falling. It is 22% in the eurozone and 23% in the US.”
Would my hon. Friend call that a copper-bottomed recovery?
Toby Perkins
I certainly would not. My hon. Friend makes an important point about the scale of the recovery, which so far has been less than a third of that predicted by the Office for Budget Responsibility in 2010. The full extent of the failure of the Government’s policy is there for all to see.
Toby Perkins
I hope that the hon. Gentleman’s intervention is rather better than the one he made last time. I will give him one more chance.
Mr Newmark
I just want to help the hon. Gentleman. Not only did the International Monetary Fund establish that we have the fastest growth of any major economy, but we have created 400,000 jobs. If we have failed so much, why is it that we have created 1.1 million net new jobs?
Toby Perkins
Once again, we hear from Conservative Members who think that it is a success if people are in work but in poverty. I had someone in my constituency surgery just two weeks ago who is doing three of the jobs that have been created and he still cannot afford to pay the mortgage—that is the reality of the recovery that they are delivering. The hon. Gentleman might sit there and tell his constituents, “Don’t worry, trust me, I’ve seen the figures and everything is getting better,” but people look in their wallets at the end of the month and know that in 40 out of the past 41 months wages have gone up by less than the costs that they face. That is the reality of the recovery that his party is delivering.
Lending to small firms has been a major problem since the banking crisis. Labour’s enterprise finance guarantee scheme made a difference, but the funding problem for small and medium-sized enterprises has become a crisis since 2010. Net lending has fallen in 24 of the past 30 months and SMEs still rank access to finance as a key business issue.
The Government are failing on the high street. They failed to give the Portas review serious backing and the local authority funding bombshell undermined the very organisations that Mary Portas envisioned would lead the small shop revolution. A cost of doing-business crisis is hitting British business, with 87% of firms reporting that energy costs have gone up in the past year and 83% of firms believing that the cost of doing business will be higher next year.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is absolutely right to set out the problems faced by small businesses. I have spoken to small businesses in my constituency across Tameside and Stockport. Many of them say that business rates are a major worry, not least because transitional relief is set to end in April next year. Does he agree that one reason why setting our proposal at £50,000 is absolutely right is that it allows small businesses to grow without getting clobbered by a massive business rates hike?
Toby Perkins
My hon. Friend is absolutely right: there is a real disincentive for many small businesses to grow. His local authority has taken innovative action to ensure that procurement goes to local small businesses, and that is an example to councils everywhere.
As much as anything, the Government’s failure on living standards has hit the pound in consumers’ pockets and pushed many of our stores to the brink. Three wasted years of wages falling behind bills every month means more hardship for Britain’s firms. Confronted by a stubborn opinion poll deficit, the Chancellor is simply flailing around in the dark for Labour policies that he can ape. He is convincing no one. We led on energy prices, but under this Government, bills still go up. We led on payday lending, on which he now thinks we were right. We told him that his funding for lending scheme was overheating the southern property market and failing to get finance to small firms, and now it appears that he agrees; and on business rates, we said things had gone too far, and now he says, “Okay, but just a little bit further.” We know that he does not have the answers. In fact, he does not even understand the questions.
Geraint Davies (Swansea West) (Lab/Co-op)
I am sure that my hon. Friend is aware that the growth now is driven completely by a combination of mortgages and consumer debt. That sort of bank lending is at its 2008 level, whereas business lending is 32% down, and in fact the share of small business has gone from 40% to 33%. That enormous collapse in funding for business is why productivity is down and wages are so low. We would change that, would we not?
Toby Perkins
Absolutely, and that brings me nicely to my next point. It is not all doom and gloom, because we are only 18 months away from a Labour Government. There is a better way under Labour. We are not just proposing a symbolic change to the role of business rates, but confirming real help for firms that, as the British Chambers of Commerce rightly said today, still face a hike in business rates.
On energy prices, we will save the average business £5,000 a year. On access to finance, we propose real action with the introduction of a proper business bank and a network of regional banks, alongside support for challenger banks and peer-to-peer lending. On business support, we are working on a proposal that recognises the support that is needed to make the most of great British business ideas. On late payments, which take more than 2,000 firms to the wall each year, we will take robust action to expose firms that pay late and end the scourge of late payments; and we will use the huge power of Government spending to point the way towards a future in which small firms finally pick up their fair share of Government contracts.
As we head towards small business Saturday, small firms can rejoice: at last there is a party ready to form a Government who understand why small firms think that business rates are so important. We have a party that gets that we will not solve the access to finance issue by expecting the banks to do differently with the next pound we give them from what they did with the last. We have a party that realises that business support matters and knows that shops will close if the people in their communities have no money in their pockets. The party that gets it is Labour. That is why we are calling for real action on business rates; that is why we will take action on the cost of living crisis facing businesses; and that is why all Members should back our motion. I commend it to the House.
Brandon Lewis
Bearing in mind that manufacturing is up, I think the hon. Gentleman misses the point that putting up corporation tax potentially hits every business that is successful. If he has worked through his economics, I assume that he would want those small businesses to be paying corporation tax because they are successful enough to become the big businesses of the future, rather than being penalised by a Labour Government. Businesses are the lifeblood of our economic recovery. This Government are cutting corporation tax to help businesses to invest and expand.
Toby Perkins
I am grateful to the Minister for giving way, but he has repeated the mistake made in the amendment, and he would not want to mislead the House. Our policy will not increase corporation tax for all businesses; it will increase it for 1.6% of businesses. Will he correct the record?
Brandon Lewis
Increasing corporation tax will affect all businesses, for the very reason that my hon. Friend the Member for Ealing Central and Acton (Angie Bray) has already outlined. The hon. Gentleman is kind of missing the point.
Brandon Lewis
My hon. Friend makes an excellent point, and I look forward to visiting Braintree this weekend for small business Saturday. He gives a good example of an area that has used its powers to do the right thing for local businesses, embracing some of the work through its Portas pilot and even going further. I congratulate Braintree district council and look forward to seeing in practice the excellent work it has done to bring down car parking charges for the benefit of local residents.
Let us be clear: Labour would have ducked the tough decisions taken to tackle the budget deficit—even within local government, Labour still has £52 billion-worth of cuts that it has not outlined. All Labour offers is more borrowing, more spending and more debt. Its plans do not reduce; they redistribute, in a sleight of hand.
Toby Perkins
I am confused by what the hon. Gentleman is saying because it bears no relation to reality. He will be aware that our business rate proposal is entirely costed. A moment ago, he appeared to be giving the impression that business rates were not a problem. If they are not a problem, why are so many businesses saying that business rates are the No. 1 cost to business issue in the country at the moment?
Brandon Lewis
The hon. Gentleman is kind of missing the point. Despite what the Labour Government did to this country, our Government have trebled small business rate relief to help the very small businesses that need that targeted help. We have reduced national insurance costs and corporation tax costs, and that has led to the 1.4 million extra jobs, the 400,000 new businesses and the growth in the economy that we are seeing at the moment.
Labour’s plans do not reduce; they redistribute, using a sleight of hand. By raising business tax, the Opposition are punishing those who have pulled us out of the previous Government’s economic abyss. Labour’s promise of tax cuts in the motion would breach the Trade Descriptions Act—read the small print. What the Opposition give with one hand, they take away in corporation tax with another. Only this Government are taking the bold action to get our economy working for everyone, to create more jobs and turn Britain around. I urge the House to reject the Opposition’s motion, and I commend the Government amendment to the House.
Toby Perkins
The hon. Gentleman is making an important point about the significance of business rates for pubs. I am sure that he knows this from his perspective, but will he give us an idea of how many pubs have a rateable value of more than £50,000? I would think that there are very few, so virtually every pub would be able to drink to Labour’s business rate cut for all businesses below that £50,000 level. Will he support that policy for the sake of British pubs?
Andrew Griffiths
I am always prepared to listen to anything that might support the great British pub, but as the hon. Gentleman is from the party that introduced the hated beer duty escalator and the smoking ban, he needs to think long and hard about what he can do to support British pubs.
Toby Perkins
My hon. Friend spoke a moment ago about the challenges faced by businesses in her constituency. She says that businesses are fighting for their lives. What does she think those businesses will think of a Government who are saying, “We can’t do anything about your business rates because we have to reduce taxes even further for those who are making over £300,000”?
Alison McGovern
I think that those companies will be bemused, at best. I think that they will be angry and frustrated that the Government are not listening to the voices of businesses such as those that I have just quoted. It is not enough to say, “All that matters is the headline rate of corporation tax—we’ll just cut that.” The Chancellor used to talk about flat taxes, but that disappeared as he realised that they would be ineffective. The Government do not really seem to have learned the lesson, and they do not seem to understand what is necessary to rebalance our economy, so that it is stronger at the grass roots and less dictated to by corporations, many of which do a great job for our country but a number of which do not.
If the Government really listened to the voice of small business, they would focus on business rates, as we have, and consider the pro-business step that the Labour party has suggested. One of the most important and enjoyable jobs that I have done in opposition has been to work alongside the small businesses in Wirral South, and I will endeavour to keep doing so.
Bill Esterson
I agree that small amounts of money can make a big difference to business—I will come on to that—but demand for social care for older and disabled people in places such as Sefton and the legal requirement to fund children’s services make it impossible to provide even relatively small sums of money, certainly on an ongoing basis.
Sefton has put aside a £1 million pot for the current financial year to provide support and has used it for some very good projects, including Christmas lights across the borough, in its various town and village centres, which has contributed. It also includes, I believe, £50,000 to accommodate free parking on Thursdays and Saturdays in the run-up to Christmas. That is part of small business Saturday, which my hon. Friend the Member for Streatham (Mr Umunna) introduced to this country and which was mentioned by my hon. Friend the Member for Chesterfield. Those sorts of initiatives, using small amounts of money, certainly work very well, but it is problematic to try to extend it across a borough with an initiative such as discretionary relief, when cuts of 40%-plus have been made.
In addition to the successes in Sefton on parking and the Christmas lights, we have a number of town teams, as I know do other Members, and they have supported some fantastic local businesses in the towns of Formby, Crosby and Maghull in my constituency alone. On Monday, I was pleased to go along to the opening of five small units in a disused shop in the centre of Maghull that the Labour borough council and Labour members of the town council had been instrumental in setting up. We have five traders, and I understand that trade is already brisk and that the initiative has been successful just in those first few days. That is a good use of the small amounts of money that the hon. Member for Enfield North mentioned, and it is quite right that we should talk about that.
I was surprised by the comments made by some Government Members about retailers. I think one or two of them implied that retailers were not important to the economy or the recovery, but they could not have been further from the truth. Retailers are at the heart of our communities. They and other businesses, particularly small businesses, suffer from high levels of business rates. When I travel round my constituency and meet small businesses, they raise the issue of business rates more than any other. Small businesses want to see action. The hon. Member for Enfield North mentioned the 2% freeze and the fact that the BRC and other business organisations have called for it. He is right about that, but they see it only as a first step—as something that is available because they feel that this Government will do it.
Those organisations also want to see what we are offering: a full business rate cut. We are talking about only a few hundred pounds with a 2% cap, whereas my hon. Friend the Member for Chesterfield is talking about a £450 cut. That is quite a significant difference, when costs are so tight and when we have retailers, as we all do, who are struggling to make ends meet and take enough money out of their businesses to survive.
Toby Perkins
Was my hon. Friend as appalled as I was to hear Government Members say, “Well, you know, £410 a year is only a pound or so a day to customers. It’s small beer”? If that is what Government Members think about business rates, does it not show how out of touch they are?
Bill Esterson
That is absolutely right. We have seen a massive growth in the number of small businesses. We now have 4.9 million businesses in this country; 40 years ago the figure was only 1 million. Of those 4.9 million, only 200,000 employ 10 or more people, while the vast majority employ a small number of people or are sole traders. For those businesses, a few hundred pounds makes all the difference and is a huge contribution. We were talking earlier about the difference that a small amount of money invested by a local authority makes, and the same is true when the money goes directly into the pockets of small business owners.