Business Rates

Yasmin Qureshi Excerpts

Wednesday 4th December 2013 Commons Chamber

[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.

--- Later in debate ---

[Andrew Griffiths (Burton) (Con)]

It probably will not surprise you to know, Madam Deputy Speaker, that I rise to talk about a specific type of small business, namely the pub. As chairman of the all-party beer group it is, of course, my role to promote and support the needs and aims of our brewing and pub industries. I think we all recognise that 80% of pubs in our constituencies are small businesses. On average, they employ 16 people. They are the lifeblood of our community—we meet there to socialise, have fun and hold public meetings—but they are also important drivers of the economy locally. They are important businesses in our communities.

I am glad that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) is present, because he is both the pubs Minister and the Minister for the high street. I think that few in this House have done more than him to stand up for and represent our pubs and to understand the issues that affect them. He has been a fantastic advocate for the industry in other Departments. I think that this is the most pub-friendly Government for many years, but there is more to do, because our pubs, as small businesses, are struggling.

Pubs are important not just for our communities, but for our high streets, which are changing and adapting. I think the Minister could do three things to support and help these vital small businesses in our communities. Something we could all do for small business Saturday is support a small business by having a pint of British beer in our local pubs in our constituencies.

[Yasmin Qureshi]

Or an orange juice.

[Andrew Griffiths]

Or an orange juice, of course.

The first thing the Minister could do relates to small business rate relief, which my hon. Friend the Member for Bury St Edmunds (Mr Ruffley) has spoken about. Small business rate relief was introduced in 2005 and is hugely important for pubs. It is a very good thing and was extended to 2013-14 by the Chancellor in the 2012 autumn statement. It offers 100% relief for small businesses and is worth £1,000 a year to pubs. For pubs that are struggling and trying to cope with changes in the economy, £1,000 a year is hugely important. Sixteen thousand pubs across the country benefit from small business rate relief and that is worth £27 million to the industry in total. The Minister could pick up the telephone to the Chancellor this evening to ensure that he listens not only to me but to all the hon. Members who have signed early-day motion 599. Let us extend small business rate relief for pubs in our constituencies to 2015, or permanently, as my hon. Friend the Member for Bury St Edmunds has suggested.

My second point is about discretionary rate relief. As the Minister will know, local authorities can offer it in relation to assets of community value, a fantastic thing brought in by this Government. Assisted by changes that came in earlier this year, local authorities can claim 50% of the discount back through the Treasury and the Department for Communities and Local Government. Will he do all he can to ensure that local authorities across the country take advantage of the scheme by offering it to their small businesses and helping pubs in their areas? I urge all right hon. and hon. Members to talk to their local authority about implementing the scheme.

My final point is about flexibility in relation to business rates. For commercial premises, business rates are assessed on square meterage, but for pubs, they are determined on turnover. Under previous legislation, if a pub’s turnover changed materially—“materially” is the important word—a concession could be offered. I urge the Minister to consider reintroducing such a provision to offer some relief to pubs that have a big change in turnover for the worse.

--- Later in debate ---

[Yasmin Qureshi (Bolton South East) (Lab)]

Small businesses are the driving force behind future jobs and growth, and they now account for more than half the economy and most of the new jobs. In fact, in the next 15 years or so, small businesses will create more jobs that people are not even aware of yet. A recent survey by the Forum of Private Business found that action on business rates is the No. 1 demand from small firms. Many hard-working small businesses are relocating or closing down every week, and the fact that there are more than 40,000 empty shops on our streets is proof of that.

In my constituency, Bolton’s 9,000 businesses are being crippled by the increasing burden of business rates, and business rate liabilities will add £3.2 million to Bolton business costs from next April. The World of Wicker—a reputable business in my constituency—is now having to move out of its town centre location because

“business rates are too high”.

That is not an isolated case.

The average bill has now reached £14,000, compared with council tax of around £1,400. Obviously, some business premises tend to be larger than homes and they tend to be in town centres, but the bill should not be 10 times the size. At the moment, business rates bring in some £25 billion a year, which is just too high. Last year, the Government increased business rates by the biggest rise in 20 years, and during this Parliament, it is projected that another £6.5 billion will be added to the business rates bill.

Businesses all over the country are shouting about the damage that business rates are causing. John Allan, chairman of the Federation of Small Businesses, said that he

“welcomes the focus by the Labour leadership on this critical issue for small businesses. It affects thousands of our members across the UK and is one which we’ve been lobbying on for some time.”

This is not something the Labour party has dreamt up because it had nothing else to do; it is a real issue that small businesses are asking and campaigning for.

The Labour party has proposed to help small businesses and our high streets by pledging to cut business rates in 2015 and to freeze them in 2016. That will mean an average saving of nearly £450 for about 1.5 million properties. That measure has been costed, and it will happen instead of the Government’s planned corporation tax cut for multinationals in 2015. That tax cut benefits only about 2% of British businesses, yet 98% of those businesses will have an increase in business rates.

I welcome today’s announcement by the Government that there will be some changes. Government Members will have to accept, however, that the Opposition have been constantly arguing for reducing, freezing or stopping business rates. Now, eventually, something is being done, but it is not enough.

Under Labour’s plan, 1.5 million start-ups, workshops and shops would benefit from a cut and then a freeze in business rates. I do not understand why Government Members find asking for business rates to be frozen or reduced so difficult to comprehend. They are happy to cut corporation tax for companies earning over £300,000, yet they are also happy to show no concern for small businesses, which are the backbone of our communities and which need our support, and moreover they think that we are somehow in the wrong for raising their concerns. I ask the Minister to realise that small businesses need as much help and assistance as we can give them.