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Mr. Peter Atkinson (Hexham) (Con): I apologise for my late arrival and for the absence of my hon. Friend the Member for Huntingdon (Mr. Djanogly), who would have been speaking for the official Opposition had he not been speaking from the Front Bench on the subject of trademarks in Committee Room 9. There seems to have been some confusion on the part of the Committee of Selection about who should and should not serve on this Committee, and I apologise to the Minister and other members of the Committee for that. No doubt the Minister will be relieved that my hon. Friend, who is an astute lawyer and expert on these matters, is not here.
Such incidents will not be totally unfamiliar to you, Mr. Conway, as you were once in the Whips Office, as I am today. One rule is that if one is stuck on such an occasion, not having read the Committee papers, one finds the most obscure and complicated regulation and asks the Minister for a full explanation of it. These regulations, of course, are rife with such possibilities. I would have loved to ask the Minister to explain regulation 12 in greater detail, and to ask the meaning of some of the fractions therein. However, I will spare him and the Committee, and just make a few general remarks.
I share the concerns of the hon. Member for Torbay (Mr. Sanders) about whether we are only rearranging a very difficult system. I appreciate the problems that business rates cause small businesses. It surprises me that the Minister says that revaluation means that business rates go down; that may well be the case in some constituencies, but certainly not in mine. We have upward-only rate reviews, because of circumstances such as the fact that in my constituency the cost of residential housing is relatively high. Those sorts of things then influence the business rates. That is quite a burden on small businesses, particularly those that have to operate with few staff but on large premises. For them, the burden is very heavy.
Every small business competes with retail parks and out-of-town shopping centres. For large companies, rates are an insignificant amount. For the supermarkets, which the hon. Gentleman mentioned, rates are a tiny fraction of their costs, but for small businesses in constituencies such as mine—in a market town such as Hexham—they are substantial. Will the Minister give an idea of the numbers of winners and losers? I apologise if he has already done so and I have missed it. Will people be reviewed downwards, or will the numbers go up?
I appreciate that business rates are highly complex. Time will tell whether this scheme will be better. The Federation of Small Businesses has expressed concern
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about the scheme, but the Opposition will not oppose the regulations. However, we will wish to see how the new scheme works in practice.
4.50 pm
Phil Hope: The hon. Members for Hexham . Atkinson) and for Torbay have raised valuable points that I shall try to answer. I should make it clear that we are not discussing the small business rate relief scheme, which both hon. Gentlemen mentioned. That is separate from the transition scheme, which is about revaluation for non-domestic ratepayers. The small business rate relief scheme is affected, in that there have had to be regulations on how that scheme will apply to those going through transition—whether their rates are to increase or decrease. The small business rate relief scheme, introduced by this Government, provides benefits for small businesses, and rightly so. However, we are discussing the transition for those whose business rates have changed in value as a result of the revaluation. These regulations are not about that relief scheme.
In response to the hon. Member for Torbay, I should say that we have provided for more generous downward caps for small businesses than in 2000 or in the consultation. The downward caps for the 2000 to 2005 scheme were as follows: the first year, 5 per cent.; the second year, 5 per cent.; then 10 per cent. and 12.5 per cent. We went into consultation saying that we should provide more generous downward caps of 17.5 per cent., 25 per cent., 45 per cent. and 50 per cent. The downward caps in these regulations are generous: 30 per cent., 30 per cent., 35 per cent. and 60 per cent. The decrease in rates for businesses, such as small businesses, whose rateable value has gone down will be more generous than in previous schemes.
I hope that that makes clear that we have recognised the importance of providing faster relief for small businesses whose rateable value has gone down, but that we are protecting the amount of increases through the caps that I mentioned. I cannot tell the hon. Member for Torbay how many businesses applied for the small business rate relief scheme, because we are not debating that scheme. I agree with him that the regulations—regulation 10, among others—are very complex.
The hon. Member for Hexham also said that the regulations are complex; he mentioned regulation 12. Although complex, they are fairer, and he can be
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pleased about that. The complexity is designed to give greater fairness; a less complex scheme would be cruder and therefore less fair. That is the balance and trade-off that we have brought about with the regulations. Yes, we have added complexity—but yes, we are increasing fairness as a result. I think that that is the right trade-off.
I think that those were the only points raised. I, too, regret that the hon. Member for Hexham was not present at the start, although I am sure that that is no reflection on his party's support for the business community. I am also sure that the fact that the hon. Member for Huntingdon is not present to stand up for the business community is no reflection on him or his party.
Mr. Atkinson rose—
Phil Hope: I wish that I had not said that.
Mr. Atkinson: It was unwise of the Minister to say that; we were going along quite carefully. To return to regulation 12—[Laughter.] My hon. Friend the Member for Huntingdon is defending small business and business interests; he is further up the Corridor, dealing with the important issue of trademarks. I am sure that he thinks that they are also important. Will the Minister give us some indication of the numbers of winners and losers under the regulations?
Phil Hope: I cannot give the hon. Gentleman those figures as we speak, but I will write to him immediately after the sitting to ensure that he has them. We have given generous relief to any ratepayer with a rateable value below £5,000 and on only one property does the relief fall to 0 per cent. at the £10,000 value. Small businesses must apply for the relief. We have taken every opportunity to publish the relief scheme among local authorities.
I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2004.
Committee rose at five minutes to Five o'clock.
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