Agricultural and Business Property Relief

Vikki Slade Excerpts

Tuesday 14th January 2025 Westminster Hall

[Graham Stuart]

I do. Someone only has to meet farmers to know that farming is already quite a lonely profession, with a high level of suicide anyway and high rates of depression. Combining that with this figure, it sounds hyperbolic to suggest that people will kill themselves ahead of this deadline, but knowing the farmers as I do in my area, I do not find it that hyperbolic. I hope it proves not to be the case, but it is a serious issue to be considered.

The impact of changes to BPR extends beyond farming communities. When asked about the changes, 85% of family businesses surveyed by the Confederation of British Industry said they would reduce investment by an average of 17%, an issue which colleagues are rightly raising. That will stifle long-term growth and harm the broader network of businesses that depend on them. They say that trust takes years to build, seconds to break and forever to repair. As I walked down Whitehall, shoulder to shoulder with farmers, their anger was palpable because they had believed the Prime Minister’s promises yet were betrayed. To Labour’s credit, it won the trust of rural Britain, through every door knocked, leaflet printed and promise made. It went from representing two rural seats in 2019 to 40 today.

The Prime Minister pledged to form a new relationship with farmers based on respect. My right hon. Friend the Member for Salisbury (John Glen) questioned where those proud rural Labour MPs are today; they are certainly not here facing the music. As usual, they are leaving the Minister to do it on his own. He asked us to judge his Government on their actions and not their words, so that is what we will do. In November 2023, the current Environment Secretary, in a room full of farmers, looked them straight in the eye and told them

“We have no intention of changing APR.”

By November 2024, that promise meant nothing. Labour waited 14 years to deliver its Budget, and it made a choice not just to change APR, but halve it. One constituent shared their shock as they calculated the impact, realising it would cost their family £300,000. Another constituent, William Hodgson, who runs a 600-acre farm near Withernsea with his mother, faces an inheritance tax bill of £1.5 million, with a post-tax profit of £150,000 a year. That means he would have to dedicate an entire decade of profits just to cover the cost of that tax. It was at that moment that the most valuable currency in politics—trust—was lost.

In February 2024, the Prime Minister told the NFU that it deserves a Government that listens and heeds early warnings. The planned changes to APR are not due until 2026, leaving the Prime Minister with one year, two fiscal events and ample parliamentary sitting days, with many colleagues all too happy to constructively work with him, to come to this House and tell us that he has listened and will change course. The question is whether he has the courage to do so.

It will have been hard to hear all of us and our chants while he was in Rio and we were in Whitehall; farmers at his north London surgeries will be few and far between. However, I hope he will listen to the hon. Member for Penrith and Solway (Markus Campbell-Savours), on his own side, who spoke bravely against the policy during the debate in the Chamber last month.

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

Will the hon. Gentleman give way?

[Graham Stuart]

I had better make some progress. The hon. Member for Penrith and Solway may have been scolded behind closed doors for doing that, but he will have regained the trust of voters who put their trust in him. As devastating as the proposed changes to APR and BPR could be on our farmers, the impact of the changes on family-owned businesses more widely could be even greater, and perhaps that deserves more attention.

A recent report by Adriana Curca at the CBI laid bare the potential fallout. Far from raising £1.4 billion, as forecast by the Treasury, the Chancellor can expect a £1.2 billion decrease in tax revenue from family-owned businesses. Instead of helping the Government to fulfil their pledge to be pro-business and pro-worker, it could lead to the loss of more than 125,000 jobs over the next four years.

Rachel from accounts obviously never got a new abacus for Christmas. Maple Garage, Beverley Travel, Beverley Camera Centre, Oh My Dog—great place—Flowerstyle, Vivienne Rose Wallpaper and Interiors, the Beverley Card Company, Islay Bloom, the Monkey Tree Café, Trent Galleries, Hull Aero Club—those are all businesses that I have spoken to since the Budget. The overwhelming sentiment was exactly the same, regardless of the type of business: disappointment in a Government who do not understand business. None of the Cabinet has ever run one, and it shows.

When the Prime Minister promised that wealth creation would be his party’s No. 1 priority—do hon. Members remember that?—more than 120 business leaders believed him, from the founder of Wikipedia, Jimmy Wales, to Andrew Higginson, the chair of JD Sports. The Prime Minister convinced them that he had a plan to kick-start our economy. Now, six months into the reality of a Labour Government, they are lacing up their trainers and running for the hills.

It does not have to be that way. Instead of tinkering with who is and who is not eligible for inheritance tax relief, we could consider following Sweden’s example, where, having tried heavy inheritance tax charges—

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.