Clause 12
Business Rate Supplements Bill
5:45 pm
Brian Binley (Northampton South, Conservative)
My hon. Friend the Member for Cities of London and Westminster referred to retail in Oxford Street. We all know that the value of the pound has impacted massively on that area. I did not want to raise the hopes of Government Members in that respect.
I support the overall thrust of this amendment and the concern behind it. However, my reason for not being able to support it is that I genuinely think that it will build into the Bill a level which may well need to be higher. My concern is that the Government are minded to have a £50,000 limit, and I should like the Minister to say where the information came from to convince the Government that they should set the limit at that level. It is a pretty important figure and will impact upon the way people think about the Bill for many years to come. We are not talking about a frivolous figure picked from the air; it will have real import for business for many years.
I am concerned about that level, not least in relation to when the Bill takes effect, which is not until April 2010, as I understand it. That coincides rather nicely with a rate revaluation that is due to take effect that year. The concern must therefore be that many more businesses than we might think of at the moment will be caught in the BRS net because of that revaluation. Whereas £50,000 may seem a sizeable figure at the moment, it may be that after revaluation it will not seem so at all. That concerns me enormously, and I would like to hear the Minister’s thoughts about that situation.
We are not sure about the Government’s thinking in the longer term and we are not sure whether they will increase the level in relation to revaluation. The chances are that, because they have said that they are minded to introduce £50,000, that will not be the case, so we can expect many more businesses to be involved. I have an especial concern in that respect for retail. Section 31 of the impact assessment, on page 13, states:
“BRS will be based on the RV of non-domestic properties. Therefore, businesses likely to have high rateable values, such as retail, could be disproportionately affected by BRS.”
That is immensely concerning. It is true that in the big city areas, most of the town centre businesses in particular, which sit in the areas of high rateable value in the centres and the main shopping areas of towns, lease their buildings. Section 31 goes on to tell us that
“businesses which do not own their properties are likely to bear significantly less of the cost than owner occupiers.”
That suggests that the whole process that has created what many call “clone Britain” in our high streets will be accentuated, accelerated and added to by the measure.
There is no doubt from a retail perspective that it is in the interests of a retailer not to own the property that they operate from. That is clearly stated in the assessment. That may be very well for Oxford street, where the big companies do not own the properties and lease them, but it is not very helpful for many of the businesses in our county towns and country towns, where the owner-occupier is the person who runs the business.
I have been immensely concerned about the decline of our community hubs in such towns and areas. Indeed, I had the privilege of heading up a commission that reported on that last July. There is no doubt that there is deep concern about the way in which our town centres in such areas are being denuded. They are being turned into clone Britain in one instance, and in other instances local businesses are being forced out. The vital point is that this will bear most heavily on the owner-occupiers of businesses in such towns, and it could be the last straw that breaks the camel’s back. If that is the case, we will do immense harm to those town centres in rural areas by this very activity. That is why I ask the Minister to consider, in the light of revaluation, an increase in the level at which BRS becomes relevant, in order to give some protection and hope to those businesses that will fall into this net on the basis that they are retailers and also own the property. It will fall most heavily on that particular group of business men in this country, to our detriment.