Non-Domestic Rate (Small Businesses)

Oral Answers to Questions — Communities and Local Government – in the House of Commons at 2:30 pm on 2 June 2009.

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Photo of Philip Hollobone Philip Hollobone Conservative, Kettering 2:30, 2 June 2009

What assessment she has made of the effects of the transitional arrangements for the national non-domestic rate on small businesses in (a) London and (b) Northamptonshire in 2009-10.

Photo of Hazel Blears Hazel Blears The Secretary of State for Communities and Local Government, Member, Labour Party National Executive Committee

No formal consideration is made of the effect of the transitional relief scheme in each financial year, but the Government are aware of the impact that large increases in business rate Bills can have on all businesses when the transitional rate relief comes to an end. That is why we are allowing businesses to defer, over two years, 60 per cent. of the increase in their business rates bill for 2009-10 caused by the ending of transitional relief. That is in addition to allowing the deferral of 60 per cent. of the increase caused by the annual inflation adjustment.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Will the Secretary of State confirm that the business rates deferral scheme will start to take effect from the end of July and will she give a commitment that the new costs incurred by local authorities in sending out the new Bills will be fully funded by central Government?

Photo of Justine Greening Justine Greening Shadow Minister (Communities and Local Government), Vice-Chair (Youth), Conservative Party

With 41 businesses now going insolvent every day, the decision by Ministers to withdraw transitional relief has been taken in a totally fact-free zone. No assessment was made of how withdrawing the relief in the first place would hurt businesses. Two months after the decision to introduce the business rate deferral scheme, Ministers have still not calculated the cost of the scheme to local authorities nor assessed its impact on businesses. Is the Secretary of State still going ahead with the next big challenge for businesses, the 2010 revaluation, and will that decision be taken in a fact-free zone too, with no account taken of the impact on businesses, communities and jobs?

Photo of Hazel Blears Hazel Blears The Secretary of State for Communities and Local Government, Member, Labour Party National Executive Committee

The hon. Lady is in a knowledge-free zone. She has failed to acknowledge the tremendous help that the Government have given to businesses. The help includes the small business rate relief—nearly 400,000 businesses have taken advantage of the 50 per cent. relief, which was opposed by the Opposition—the deferral of 60 per cent. of the retail prices index increase, the deferral of 60 per cent. of the transitional element, and the deferral of tax and VAT for more than 100,000 businesses. That is what real help is, and I am afraid that the hon. Lady is not even on the playing field.

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