My Lords, I will speak to Amendment 474. I am grateful to the noble Baroness, Lady Pinnock, for allowing me to speak first. We both have the same objective in mind: that there should be a review of non-domestic business rates. The main differences between us are twofold: first, the noble Baroness’s amendment is slightly more prescriptive than mine; secondly, and more importantly, my amendment would provide for a public consultation. Those are the only two differences, really; there is nothing much more than that.
I should declare my interest as the owner of high street investment retail properties, and I am grateful for the support of noble Lords across the House who have signed my amendment. The objective of my amendment is stated in its proposed new clause: to make business rates
“fairer to businesses and to sustain economic activity and growth, especially in high streets and town centres.”
The Bill is an entirely appropriate vehicle for such a provision, since one if its major concerns is that there are empty high street retail properties and failed retail businesses both on the high street and in town centres.
I acknowledge the steps taken in the Autumn Statement to ease some of the economic burden of business rates but, if we want flourishing high streets, we need to look at the system as a whole and not rely on ad hoc changes. Those who invest in retail properties, whether they run small businesses there or otherwise, will want to know what their liabilities are—not what might happen in future—either to raise or reduce business rates or to introduce new ones. This is the one outgoing that is not negotiable. You can negotiate your employees’ wages; you can negotiate the rent; you can go to one of a number of power and energy suppliers; however, you cannot negotiate the rates.
The Government said by way of a manifesto commitment that they would reduce the overall burden of business rates. In fact, the Office for Budget Responsibility reported last year that the Government are
“forecasting that income from business rates will rise to nearly £36bn by 2027/28 (from £28.5bn in 2022/23)”—
a very significant increase that is quite contrary to that manifesto commitment.
There are numerous reasons why it is appropriate to have a review of—and, I would say, a public consultation on—non-domestic rates. Let me mention a few. The uniform business rate multiplier, which is used to calculate rate bills, is running much higher than its historical level, which was 34p; currently, it is 51p or 49.9p for small businesses. Consideration also needs to be given to the empty property rates relief; there is a question as to whether the six-month empty property rates holiday should be extended from the warehouse and industrial sectors to include retail and offices.
Then, there is the question of how often revaluations should take place for the purpose of fixing the level of rates, the suggestion being that it should be yearly. Another question is what is or is not rateable in relation to plant machinery. Finally—these are only a few of the considerations that need to be addressed—there is the question of the appeals system, which is too lengthy, not transparent and not accessible. Those are reasons why it seems essential to me that, if we are to have full and flourishing businesses and retail properties on the high street, we need to look at this one non-negotiable expense, which is running at an historical high, notwithstanding, as I said, the ad hoc reliefs granted in the Autumn Statement.
6.15 pm
Finally, I want to put one possible concern completely to rest. I may be entirely mistaken, but I understood from one of the all-Peers sessions held by the noble Baroness, Lady Scott of Bybrook, that there may be a question as to whether the proposed amendments on business rates trespass on the financial privilege of the House of Commons concerning money Bills. First, there is nothing in our amendments to suggest that business rates should be raised—quite the contrary. More to the point, the ways and means resolution in the other place specifically extends the Bill to include matters relating to the charging of fees and other charges. Whatever the privileges of the other place may be, they do not preclude this House from reaching its own views on what should be done about business rates.