Non-Domestic Rating (Multipliers and Private Schools) Bill

Vikki Slade Excerpts

2nd reading
Monday 25th November 2024 Commons Chamber

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Since becoming a Member of Parliament earlier this year, I have been heartened every time I have heard Ministers confirm that business rates reform is planned. I know what impact business rates can have on town centres through my work as a council leader and my time owning and operating a high street business for nearly 14 years in my constituency of Mid Dorset and North Poole—I do not any more, so I do not need to declare that as an interest. But that was why I was so disappointed to read the Bill, which simply tinkers around the edges and does nothing to fix the foundations of our town centres or about the inequity of business rates between physical and online businesses.

I welcome the higher rate aimed at large warehouses, but it does not go far enough. Those online businesses have sucked the life out of our high streets, and if what the Bill proposes is the extent of the change, it will not support anyone.

[Iqbal Mohamed (Dewsbury and Batley) (Ind)]

It is not just favourable business rates that benefit online businesses; they can use tax loopholes to avoid paying the taxes that small businesses pay as a proportion of their profits. Does the hon. Member agree that the Government have other mechanisms for raising such funding?

[Vikki Slade]

I agree with the hon. Member and thank him for his intervention. I was just about to say that we need a proper tech tax on online businesses, which should be ringfenced to stay in local communities, where councils could use it to support town centres in a way that works for them.

Many councils are not able to keep the business rates accrued in their areas; they are set externally and sent elsewhere to support other communities. That is not understood or even appreciated by local communities. I cannot remember the number of times that, as a local government leader, I was shouted at by people saying, “You’re making all that money as a council.” People think that the councils own the businesses and the properties and that they set the rates. The fact is, they are set elsewhere, and councils do not have the power to provide discounts without having to plug the gap not just for their own areas, but for what they send to Government. That is what real reform would look like.

[Matt Rodda (Reading Central) (Lab)]

The hon. Member is making some wide-ranging points. I think the Government’s policy in this area is excellent. I remind her that there are a range of other policies that local government can implement. I commend my own local council in Reading, where there has been a lot of work to try to keep local small businesses active in the town centre through planning and a range of other things. It is really important to work with the business community. Would she like to comment on that?

--- Later in debate ---

[Vikki Slade]

Absolutely. We were looking to work with the rental auctions that are coming in. When I was the Lib Dem spokesperson in a Westminster Hall debate a few weeks ago, I was encouraged to hear that they are coming through. I hope that that happens quickly, and that they do not have the loopholes that I feared they would have.

I will move on to my concerns about this policy. We need to ensure that those who profit from businesses pay. Business rates as described in the Bill are not just related to the rateable value but are explicitly linked to the rental value. They bear no relationship to the type of business, its profitability or its broader benefits to the community or to society. I would like to give an example, which I know is accurate because the figures come from the business that I used to own. It predates the retail, hospitality and leisure discount, but that it is not guaranteed to be continued anyway. I think the numbers will startle you.

We owned a café on a high street in an affluent community with an older population, with competition from several sources, including a Costa franchise and a church café, which of course pays no rates. The rent on our café was £25,000 a year. Our rates bill was £19,000. That meant that I was not eligible for a penny of small business rate relief, so my rent and rates bill was around £4,200 a month. In a ward less than three miles away, a café on that high street was being marketed with a rental of just £12,500, and a rateable value of £11,000. Thanks to small business rate relief—I am sure you will say that is a great thing, and it is—it paid no rates, so its fixed outgoings were £1,900.

I am sure that you, Madam Deputy Speaker, do not think that we could charge 2.5 times more for a tuna mayo sandwich and a cup of coffee than the café down the road. That is the problem with the way that business rates work. This inequity, and the pressure it put on my business and all those I represented when I chaired the Broadstone chamber of trade and commerce, is what got me into politics. As sad as that is, that is why I got involved and why I stand here today to say to you that the Lib Dems want you to go further. We want business rates replaced with a proper landowner levy, so that it is not the tenants who pay but those who really benefit from the property—the people who own it. The Bill may be a reasonable start, but it does not go far enough. I would love to see you go further.

[Madam Deputy Speaker (Caroline Nokes)]

Order. Before I call the next speaker, I say to the hon. Lady that I know she will not have intended to do so, but she said “you” repeatedly, and it was very unclear whether she was addressing me. I suspect that the last time it was to the Minister.