Business Rates

Ways and Means – in the House of Commons at 3:31 pm on 29th November 1994.

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I would now like to deal with business rates. We are about to implement the first five-yearly review of valuations of properties for rating purposes. Without those five-yearly reviews the rate base would become hopelessly out of date. The property market has changed a lot over the past five years with wide regional variations. [HON. MEMBERS: "It has gone down."]
As a result of the review, many properties in the south of England will begin to see reductions in their rates bills. Some businesses in the midlands, the north, Scotland and Wales will benefit as well, but others will discover that up-to-date valuations will raise their liability.
I am glad to say that I will be able to continue to find resources to help businesses through this new transition period in the same way as we have been helping business through the transition from the last revaluation. My right hon. Friend the Secretary of State for the Environment and my right hon. Friends the Secretaries of State for Scotland and for Wales will announce details of the scheme later today.
But I can tell the House now that increases in bills will be limited to 10 per cent. in any one year for large properties, once adjusted for inflation. Small business properties account for three quarters of those receiving protection.
We have decided to limit real increases for such properties to 7½ per cent. This protection will in part be financed by limiting real reductions in rates bills for large properties to 5 per cent. and for small properties to 10 per cent.
But the revenue from limiting gains is not enough to help those businesses which find themselves worse off as a result of more up-to-date valuations. I have therefore decided to provide assistance of £605 million next year to finance the transitional relief. That is similar to the amount that we are spending on the former transitional relief scheme this year.