Reducing Costs for Businesses

Toby Perkins Excerpts

Tuesday 11th January 2022 Commons Chamber

[Jonathan Reynolds]

I will proceed.

I know many Government Members are uncomfortable hearing it, but it is true to say that the Conservatives have become a high tax party because they are a low growth Government, and there is no plan that I can see to change that. In fact, most of the decisions the Government take tend to make things worse. Raising taxes, failing to deliver on transport promises and tearing up the existing industrial strategy are not the ways to increase productivity, growth and wages.

We used to talk about the danger of industrial strategy being the Government trying their hand at picking winners. This Government’s strategy is better described as kicking winners. Not a week goes by without some Government Minister trying to drag our world-class universities into their desperate culture wars, instead of recognising the pioneering research that, among other things, gave us the vaccine. There is the Brexit deal the Government negotiated that delivered none of the market access our financial services industry asked for, and which has put bureaucracy and red tape in the way of British exports.

If we are to meet the challenges of the future, it will take a lot more ambition than this Government have so far shown, and it will require a change of course in several areas. It will require reforms—significant reforms—such as the replacement of business rates that we have proposed, and policies that incentivise long-term growth and investment over slogans such as levelling up, or unproven flights of fancy such as freeports.

[Mr Toby Perkins (Chesterfield) (Lab)]

I am grateful to my hon. Friend for giving way and really pleased to come in when he is talking about business rates because for both the hospitality sector and the retail sector—two sectors that are crucial in my constituency and so many others—business rates are one of the biggest barriers to growth and to survival.

[Jonathan Reynolds]

I am particularly pleased I gave way to my hon. Friend because I drive through Chesterfield when I am going from Stalybridge to London, and I pay tribute to him and his local colleagues for the work they have done. He is absolutely right that our promise on business rates is to replace an outdated system that does not work with one that is fit for the future. That means rebalancing rates so that bricks-and-mortar businesses do not lose out to online firms and making sure we encourage, rather than disincentivise, investments in new plant and machinery.

--- Later in debate ---

[Mr Perkins]

Will the Minister give way?

[Lee Rowley]

I will not give way now, but perhaps in a moment.

Months after those bold statements began to be made during last year’s Labour conference, we are still yet to hear the detail of how Labour will meaningfully reform business rates.

[Mr Perkins]

Will the Minister give way on that point?

[Lee Rowley]

I am happy to give way; perhaps the hon. Gentleman can explain it.

[Mr Perkins]

I have a better memory than the Minister, because I remember when George Osborne stood at that Dispatch Box in 2015 and said almost exactly the same thing, so we have been waiting six or seven years for business rates reform under the Government. We will wait another two years until my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) is on the Government Front Bench to actually get the change that our businesses need.

[Lee Rowley]

I hate to break it to my neighbour, but we came out last year with a reform of business rates, which is intended not just to save a substantial amount of money for businesses in his constituency and mine, but to ensure reform and recognition of the changes necessary. Labour ignores those kinds of changes, and what the Opposition did just a moment ago is a perfect example. The Chancellor’s 2021 Budget delivered a huge tax cut to business, freezing the multiplier for 2022-23, worth nearly £5 billion over the next five years, introducing a new temporary 50% relief for the retail, hospitality and leisure sectors, and moving to a yearly revaluation cycle from 2023.

--- Later in debate ---

[Mr Toby Perkins (Chesterfield) (Lab)]

As someone who spent 20 years in business, including running two businesses, prior to coming into this place, there is a great deal I would like to say today, but the restrictions we have on time mean that I am going to restrict my remarks really to the hospitality sector. There are many different sectors that have had a really difficult time during the pandemic. I am concerned about the self-employed, particularly those who find that they have become a bad credit risk in the eyes of the bank because they availed themselves of one of the Government support schemes. I am very concerned about the high street. Anyone who takes a trip to almost any high street in the land will see that the pandemic has increased the pace of shop closures.

However, I do want to touch particularly on the hospitality sector, as the hon. Member for Dudley South (Mike Wood) did just a moment ago. This crucial sector employs almost 3 million people, it delivers £66 billion of revenue and pays tens of billions of pounds in taxes. I do not want anyone to think that, because the Government decided not to close the hospitality sector in the run-up to Christmas, English publicans, restaurant owners or hoteliers were therefore the lucky ones. The truth is that many organisations in this sector had a massive reduction in their business over Christmas—they saw cancellations of Christmas parties—and while the sector may not have been forcibly closed, their takings were well down, and many providers told me they had taken on staff on the basis that it would be the busiest time of the year, only to find it much quieter than normal.

Business rates is a crucial issue. Everyone listening to this debate today will have heard a very clear message: the Labour party is the party of reform of business rates, and the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for North East Derbyshire (Lee Rowley) made it absolutely clear that the Tory party is the party of a temporary discount and stick to the same old system. This system penalises pubs, it penalises the hospitality sector, it penalises manufacturing and the high street, and it protects the internet businesses that do not on the whole put as much into the economy as those sectors. I support what we are proposing here today.