Occupied Hereditaments: Liability

Part of Clause 39 – in the House of Commons at 4:45 pm on 21 April 1988.

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Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay 4:45, 21 April 1988

I wish to follow the points raised by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi). I thank him for his kind remarks about my previous career as a champion of small businesses.

The whole point about rates, as I understand it, is to protect businesses from the depredations of spendthrift councils. We must be very careful with our new proposals and ensure that the increases do not turn out to be depredations. Surely it must be the intention of the Secretary of State to protect small businesses.

I was very pleased to see the Secretary of State's latest press release dated 20 April. He tells us that he has taken on board many of the concerns voiced about this rate, and that he will be phasing it in. He has not yet told us, however, how long that phasing-in process will be. I hope that he will not find it necessary to increase the rates of any business by more than 10 per cent. a year. If he does so, it may present special difficulties to small firms.

I shall give an example of one small business in my constituency. The potential increase in the rateable value can be worked out by reference to rent increases since 1973, when the last valuation took place. It is likely to be somewhere between £2,000 and £6,500, which is an enormous amount of extra money to have to find. Even if that increase were phased in at 10 per cent. a year, such a business would need to find something like £400 every year to meet that increase. I do not think that that is an exceptional example. The point is that in relation to that business, and that family, living from the proceeds from the business, it can be a very large sum indeed.