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The House divided: Ayes 301, Noes 265.
AYES
Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Beckett, rh Margaret
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel
Blizzard, Mr. Bob
Blunkett, rh Mr. David
Borrow, Mr. David S.
Bradshaw, Mr. Ben
Brennan, Kevin
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burnham, rh Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, rh Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Gregory
Campbell, Mr. Ronnie
Cawsey, Mr. Ian
Challen, Colin
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clelland, Mr. David
Coaker, Mr. Vernon
Coffey, Ann
Connarty, Michael
Cook, Frank
Cooper, Rosie
Cooper, rh Yvette
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Curtis-Thomas, Mrs. Claire
Darling, rh Mr. Alistair
David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Quentin
Dean, Mrs. Janet
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Dobson, rh Frank
Dodds, Mr. Nigel
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Eagle, Angela
Eagle, Maria
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Etherington, Bill
Farrelly, Paul
Field, rh Mr. Frank
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, rh Caroline
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gibson, Dr. Ian
Gilroy, Linda
Goggins, Paul
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hanson, rh Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, rh John
Henderson, Mr. Doug
Hepburn, Mr. Stephen
Heppell, Mr. John
Hermon, Lady
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hood, Mr. Jim
Hoon, rh Mr. Geoffrey
Hope, Phil
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
Ingram, rh Mr. Adam
Irranca-Davies, Huw
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jowell, rh Tessa
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khan, Mr. Sadiq
Kidney, Mr. David
Knight, rh Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, rh Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
Mactaggart, Fiona
Mahmood, Mr. Khalid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McFadden, rh Mr. Pat
McFall, rh John
McGuire, rh Mrs. Anne
McIsaac, Shona
McKechin, Ann
McNulty, rh Mr. Tony
Meacher, rh Mr. Michael
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, rh David
Miliband, rh Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffat, Anne
Moffatt, Laura
Moon, Mrs. Madeleine
Moran, Margaret
Morden, Jessica
Morgan, Julie
Morley, rh Mr. Elliot
Mudie, Mr. George
Mullin, Mr. Chris
Murphy, Mr. Denis
Norris, Dan
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Reid, rh John
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Roy, Lindsay
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, rh Joan
Salter, Martin
Sarwar, Mr. Mohammad
Seabeck, Alison
Sharma, Mr. Virendra
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simon, Mr. Siôn
Simpson, David
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Smith, John
Snelgrove, Anne
Southworth, Helen
Spellar, rh Mr. John
Spink, Bob
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, David
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Ward, Claire
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, rh Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, rh Mr. Michael
Wilson, Phil
Wilson, Sammy
Winnick, Mr. David
Winterton, rh Ms Rosie
Woodward, rh Mr. Shaun
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wyatt, Derek
Tellers for the Ayes:
Steve McCabe and
Chris Mole
NOES
Afriyie, Adam
Ainsworth, Mr. Peter
Alexander, Danny
Amess, Mr. David
Arbuthnot, rh Mr. James
Atkinson, Mr. Peter
Bacon, Mr. Richard
Baker, Norman
Baldry, Tony
Barker, Gregory
Baron, Mr. John
Barrett, John
Beith, rh Sir Alan
Bellingham, Mr. Henry
Benyon, Mr. Richard
Beresford, Sir Paul
Binley, Mr. Brian
Bone, Mr. Peter
Boswell, Mr. Tim
Bottomley, Peter
Brady, Mr. Graham
Brake, Tom
Brazier, Mr. Julian
Breed, Mr. Colin
Brokenshire, James
Brooke, Annette
Browne, Mr. Jeremy
Browning, Angela
Burns, Mr. Simon
Burrowes, Mr. David
Burstow, Mr. Paul
Burt, Alistair
Burt, Lorely
Butterfill, Sir John
Cable, Dr. Vincent
Cameron, rh Mr. David
Carswell, Mr. Douglas
Cash, Mr. William
Chope, Mr. Christopher
Clappison, Mr. James
Clark, Greg
Clarke, rh Mr. Kenneth
Clegg, rh Mr. Nick
Clifton-Brown, Mr. Geoffrey
Corbyn, Jeremy
Cox, Mr. Geoffrey
Curry, rh Mr. David
Davey, Mr. Edward
Davies, Mr. Dai
Davies, David T.C. (Monmouth)
Davies, Philip
Davis, rh David
Djanogly, Mr. Jonathan
Dorrell, rh Mr. Stephen
Dorries, Nadine
Duddridge, James
Duncan, Alan
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Durkan, Mark
Ellwood, Mr. Tobias
Evans, Mr. Nigel
Evennett, Mr. David
Fabricant, Michael
Fallon, Mr. Michael
Farron, Tim
Field, Mr. Mark
Flynn, Paul
Foster, Mr. Don
Fox, Dr. Liam
Francois, Mr. Mark
Fraser, Christopher
Gale, Mr. Roger
Garnier, Mr. Edward
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Gillan, Mrs. Cheryl
Godsiff, Mr. Roger
Goldsworthy, Julia
Goodman, Mr. Paul
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Grayling, Chris
Green, Damian
Greening, Justine
Greenway, Mr. John
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hague, rh Mr. William
Hammond, Mr. Philip
Hammond, Stephen
Hancock, Mr. Mike
Hands, Mr. Greg
Harper, Mr. Mark
Harris, Dr. Evan
Harvey, Nick
Hayes, Mr. John
Heald, Mr. Oliver
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Hemming, John
Hendry, Charles
Herbert, Nick
Hoban, Mr. Mark
Hogg, rh Mr. Douglas
Hollobone, Mr. Philip
Holloway, Mr. Adam
Holmes, Paul
Hopkins, Kelvin
Horam, Mr. John
Horwood, Martin
Hosie, Stewart
Howard, rh Mr. Michael
Howarth, David
Howarth, Mr. Gerald
Howell, John
Hughes, Simon
Huhne, Chris
Hunt, Mr. Jeremy
Hunter, Mark
Hurd, Mr. Nick
Jack, rh Mr. Michael
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Jones, Mr. David
Jones, Lynne
Keetch, Mr. Paul
Kennedy, rh Mr. Charles
Key, Robert
Kirkbride, Miss Julie
Knight, rh Mr. Greg
Kramer, Susan
Laing, Mrs. Eleanor
Lait, Mrs. Jacqui
Lamb, Norman
Lansley, Mr. Andrew
Laws, Mr. David
Leech, Mr. John
Leigh, Mr. Edward
Letwin, rh Mr. Oliver
Lewis, Dr. Julian
Liddell-Grainger, Mr. Ian
Lidington, Mr. David
Lilley, rh Mr. Peter
Llwyd, Mr. Elfyn
Loughton, Tim
Luff, Peter
Mackay, rh Mr. Andrew
Mackinlay, Andrew
Maclean, rh David
MacNeil, Mr. Angus
Main, Anne
Malins, Mr. Humfrey
Maples, Mr. John
Mason, John
May, rh Mrs. Theresa
McDonnell, John
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Mercer, Patrick
Miller, Mrs. Maria
Milton, Anne
Mitchell, Mr. Andrew
Moore, Mr. Michael
Moss, Mr. Malcolm
Mulholland, Greg
Mundell, David
Murrison, Dr. Andrew
Neill, Robert
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Oaten, Mr. Mark
Öpik, Lembit
Osborne, Mr. George
Paice, Mr. James
Paterson, Mr. Owen
Pelling, Mr. Andrew
Penning, Mike
Penrose, John
Pickles, Mr. Eric
Prentice, Mr. Gordon
Price, Adam
Prisk, Mr. Mark
Pugh, Dr. John
Randall, Mr. John
Redwood, rh Mr. John
Reid, Mr. Alan
Rennie, Willie
Rifkind, rh Sir Malcolm
Riordan, Mrs. Linda
Robathan, Mr. Andrew
Robertson, Angus
Robertson, Hugh
Robertson, Mr. Laurence
Rogerson, Dan
Rosindell, Andrew
Rowen, Paul
Russell, Bob
Salmond, rh Mr. Alex
Sanders, Mr. Adrian
Scott, Mr. Lee
Selous, Andrew
Shapps, Grant
Shepherd, Mr. Richard
Simpson, Alan
Simpson, Mr. Keith
Smith, Sir Robert
Soames, Mr. Nicholas
Soulsby, Sir Peter
Spelman, Mrs. Caroline
Spicer, Sir Michael
Spring, Mr. Richard
Stanley, rh Sir John
Steen, Mr. Anthony
Streeter, Mr. Gary
Stuart, Mr. Graham
Stunell, Andrew
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, David
Taylor, Mr. Ian
Taylor, Matthew
Taylor, Dr. Richard
Teather, Sarah
Thurso, John
Timpson, Mr. Edward
Tredinnick, David
Turner, Mr. Andrew
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Viggers, Sir Peter
Villiers, Mrs. Theresa
Walker, Mr. Charles
Wallace, Mr. Ben
Walter, Mr. Robert
Wareing, Mr. Robert N.
Waterson, Mr. Nigel
Watkinson, Angela
Webb, Steve
Weir, Mr. Mike
Whittingdale, Mr. John
Widdecombe, rh Miss Ann
Wiggin, Bill
Willetts, Mr. David
Williams, Hywel
Williams, Mark
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilshire, Mr. David
Wilson, Mr. Rob
Winterton, Ann
Winterton, Sir Nicholas
Wishart, Pete
Wood, Mike
Yeo, Mr. Tim
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Noes:
Mr. Stephen Crabb and
Jeremy Wright
Question accordingly agreed to.
The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing order No. 31(2)).
That this House notes the Resolutions of this House of 31 October 2006, 11 June 2007 and 25 March 2008 on an Iraq inquiry; recognises the heroic efforts of the British armed forces in Iraq who have a continuing role which this House should be careful not to undermine; further recognises that a time will come when an inquiry is appropriate, but declines to make a proposal for a further inquiry at this time, whilst important operations are underway in Iraq to support the people and government of Iraq.
Business Rates and the Recession
Madam Deputy Speaker (Sylvia Heal): I must inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
4.29 pm
Robert Neill (Bromley and Chislehurst) (Con): I beg to move,
That this House notes with concern that the effect of the five per cent. rise in business rates and the end of transitional rate relief will mean soaring bills at a time of deflation and recession; notes the poor take-up of small business rate relief and calls for entitlement to be made automatic in England, as it is in Wales; believes the complex and shrinking Local Authority Business Growth Incentive Scheme should be replaced with genuine incentives for local authorities to promote business growth; further calls for local authorities to have the power to apply local business rate discounts; expresses concern about the effect of the 2010 rates re-valuation on retail premises and urges a review of the re-valuation plans; cautions that local firms will suffer as a result of the Government’s business rate rises on empty property, new supplementary rates being imposed with no business say, and retrospective increases in rates on business by ports; and asserts that the Government’s policies on business rates are harming local firms during the recession.
I sometimes think that opening a second half-day debate is a bit like being in the second house in repertory, but I hope that we have a better audience than is sometimes the case in those circumstances. [ Interruption. ] As the Minister says, the quality sometimes comes on later.
I am sure, however, that everyone will recognise that this is a topic of the first order of magnitude. It is a topic of such magnitude because business rates are a significant part of the existence, and success or failure, of many parts of our wealth-creating sector. The debate is timely because on 5 April, businesses throughout the country will receive a new set of business rates for the coming year. It is a matter of sadness from any point of view that many businesses will approach that day with considerable trepidation.
Robert Key (Salisbury) (Con): Does my hon. Friend recognise that the debate is also timely because it is a quarter day? Up and down the country, thousands of small businesses will have to pay their commercial rents or land rents to landlords. Has he heard of any assistance proposed by the Government to allow those businesses to continue in existence, because if they do not, they will not be able to pay the rates either?
Robert Neill: My hon. Friend makes a good point. The Government’s amendment, which I shall come to later, makes a passing and broad-brush reference to certain proposals, but I do not think that they are adequate, as I hope I shall explain. His other extremely important point is the significant impact of business rates on the viability of businesses as a whole. Local firms in particular cite rates, after rent and staff, as their highest overhead. A significant hike in business rates, therefore, can be the difference between survival and prosperity or a business going down the tubes with jobs and prosperity being lost. That is why the effect of the proposed increase in business rates, compounded with the difficulties that many businesses in the small and medium-sized sectors are already suffering, makes the debate so timely. The situation for those people is particularly grave.
Against that background, it is not surprising that troubling figures are already emerging on the impact of business rate increases on top of other costs of the economic downturn. So far, the Local Government Association reports that four out of five councils have found an increase in empty properties in their town centres. That was before this rate increase happened; 80 per cent. of councils found that businesses are being driven out of our high streets, thanks clearly and firmly to the economic failures of this Government.
The LGA also pointed out a significant increase—of 56 per cent.—in the number of firms having difficulty paying business rates. That is an enormous increase, and if firms are having difficulty paying their business rates, they may well have difficulty in meeting their other obligations. Their viability is in danger. Why? It is because of the failure of the Government to do anything about proper liquidity for genuine and otherwise viable businesses—reflected in their failure to adopt the proposals advanced by my party for a proper loan guarantee scheme to get credit flowing—and because of the compounding of costs and regulations for those businesses. As a result, businesses are caught in a deadly pincer movement. Some eight out of 10 councils also found an increase in the number of small firms seeking business support. Those three sets of statistics from across the country are grim figures that are a serious indictment of this Government’s handling of matters.
I turn to the impacts of the business rate that we seek to address in our motion, to some of the points where we take issue with the Government, and to areas where we believe that more can be done. The first issue is the increase of 5 per cent. that is due this year. That is especially hard for businesses to bear, because the methodology that the Government have adopted is difficult for many people to understand. It is based on rental values in April 2008, when the inflation index was higher than it is now. Businesses are facing an increase of 5 per cent. in rates when international price index—IPI—inflation is down to 0.1 per cent. and we are likely to experience deflation in the coming year. Businesses still have to meet the inflationary increase, which is based on thoroughly out-of-date figures.
That will make it hard for many small businesses to survive, yet, to revert to the point that my hon. Friend the Member for Salisbury (Robert Key) made, the Government have made no suggestions about the methodology, which could be changed and improved. Indeed, we hear the contrary from the Secretary of State, who has not graced us with her presence today. I am sorry that she is not here, because it is always a pleasure to see her and look her straight in the eye, as perhaps I can— [Laughter.] If one has a unique selling point, one should not be afraid to flaunt it.
When taxed with the difficulties that businesses would experience, the Secretary of State’s response was,
“it is essential to try to maximise the take from non-domestic rates”.—[ Official Report, 20 January 2009; Vol. 486, c.608.]
That gives it all away. The survival of businesses and the viability of local services are not the Government’s concern, but using businesses as a cash cow is. Businesses are being clobbered by the increase in non-domestic rates to bail out the Government’s waste. Among other things, business rates are being used to subsidise the pointless VAT cut. On what would most people prefer public money to be spent? The Secretary of State’s comment gives away the Government’s position.
Businesses are suffering from the further complication this year of the end of transitional relief from the previous 2005 revaluation. It is likely that that will raise another £100 million, taken away from businesses that are already in difficulty. People therefore face a genuine double whammy. Again the Government have done nothing—not even expressed a hint of concern—about the impact of the cliff edge on which many businesses are perched.
Mr. Robert Goodwill (Scarborough and Whitby) (Con): Is my hon. Friend aware that the hospitality industry, including pubs and restaurants, is especially affected? This morning, I got an e-mail from Green’s restaurant in Whitby, which has experienced a rates increase this year from £2,747 to £5,531. Several businesses in Whitby have contacted me to say that their rates have doubled through the combination of the end of transitional relief and the increase to which my hon. Friend referred.
Robert Neill: My hon. Friend is right—all the surrounding evidence supports his point. Again, it is worth noting that the Local Government Association—a cross-party body—has identified exactly the same problem throughout the country and in all sectors as my hon. Friend identified in his constituency in the hospitality sector.
In the south-east of England, a public house has experienced an increase from £1,800 to £6,600. Elsewhere, different sorts of businesses, even small ones, are experiencing increases—from, for example, £10,500 to £31,500. That is a triple increase—impossible for people to bear under current circumstances. Not only small businesses are affected. Some large organisations in our main town and city centres are also badly affected. One of the large metropolitan councils has reported examples of bills increasing from £37,000 to £123,000, and from £36,000 to £203,000. Such increases are not sustainable. My final example is not even the largest in gross or percentage terms: it is an increase from £567 to £17,096.
I speak with feeling about that, because as some hon. Members may know, many years ago my mother ran a small shop. When we looked at the situation each year to ensure that things were kept going, we needed a reasonable projection of what the increases might be. However, no one can be expected to keep their head above water in the current climate with those sorts of increases.
Mr. Richard Shepherd (Aldridge-Brownhills) (Con): When my hon. Friend’s mother was running her shop all those years ago, the business rate was a local tax that was set by local authorities. A Conservative Government moved it to the Consolidated Fund and it has now become a substantial plaything in national revenues for distributive policies at the centre and therefore does not reflect the needs of local communities.
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