High Streets Strategy: Business Rates

Wednesday 11th November 2026 Lords Chamber

Question

15:07

Asked by

[Lord Pitkeathley of Camden Town]

To ask His Majesty’s Government whether they are considering transferring liability for business rates from occupiers to property owners as part of their high streets strategy.

[The Parliamentary Secretary, HM Treasury (Lord Pitt-Watson) (Lab)]

Local government, property owners and occupiers can work together to improve high streets. I start by recognising that my noble friend has been at the forefront of the business improvement district movement, which the Government are keen to promote. Innovations such as the Camden Collective have provided vital incubation spaces for creative start-ups. However, the evidence suggests that shifting rates liability to landlords would be administratively cumbersome, and may disrupt funding for local services, so the Government are not considering this proposal at this time.

[Lord Pitkeathley of Camden Town (Lab)]

My Lords, I thank my noble friend the Minister for his reply. Having spent, as he alludes to, 20 years working with high street businesses, I know how much can be achieved when businesses and property owners work together. How will the Government’s high streets strategy encourage a stronger partnership between landlords and their tenants? Beyond the question of business rates liability, what other measures will Ministers consider to give property owners a greater stake in the success of the businesses occupying their properties?

[Lord Pitt-Watson (Lab)]

There is quite a long list of things to help. In the Budget alone, there is a 20% reduction for pubs and venues, 70,000 shops which will have no rates at all, and other leisure and retail outlets are frozen in real terms. There is the high streets strategy, with £210 million for the community assets programme, £125 million for derelict and vacant properties, and support for the extension of business improvement districts, including property owners outside of London being involved in the business improvement districts—I could go on. It is a broad programme to support the things that my noble friend would like to see happening.

[Baroness Kramer (LD)]

My Lords, with small and high street businesses under so much pressure, surely this is the time for the fundamental reform of business rates to, I suggest, a commercial landowner levy. I think we are past the point of fiddling at the margins. Do the Government recognise that a change such as this would enable hard-pressed small businesses to compete, to invest in energy improvements and to upgrade, bringing new vitality and jobs to the very heart of our communities?

[Lord Pitt-Watson (Lab)]

I reply to that in the same way as I did to my noble friend Lord Pitkeathley. The evidence suggests that shifting rates liability to landlords would be administratively quite cumbersome and would make it difficult for the funding of certain local services that want to go to particular types of shops and venues. That is why it is not being considered at this time.

[The Earl of Clancarty (CB)]

My Lords, following the question asked by the noble Baroness, Lady Kramer, does the Minister agree that, for arts organisations, which are often in a financially precarious position, it is their categorisation for business rates that urgently needs to be looked at? Does he agree with the Campaign for the Arts that regional theatres and cinemas, for example, should not be taxed at the same level as, say, an Amazon warehouse, as this ignores the value that these venues bring to community infrastructure, as much as high street businesses?

[Lord Pitt-Watson (Lab)]

I understand the point that the noble Earl is making. I cannot give him any assurances right now. The categorisation issues will be complicated ones. However, if there are places where he feels that there are problematic anomalies, perhaps we could talk about that, or he could write to me, and I can see whether we can do anything about it.

[Lord Swire (Con)]

My Lords, is it not time to accept that our high streets will never look the same again, from a combination of factors including online shopping, terrible car charges for anyone parking for more than a short time and out-of-town shopping centres? Surely the only way that we can regenerate our town centres is by encouraging younger people and families back into them, which, in turn, will engender a night-time economy and lead to a plethora of new businesses and shops. We need to think this from the start and stop fiddling around the edges.

[Lord Pitt-Watson (Lab)]

This is reflected in the high streets strategy. For example, the hospitality zones within the high streets strategy are making sure that we stop the conflicts that would otherwise arise between residential housing and hospitality in the same place. That is added to the rate reductions that I have talked about. The noble Lord is right that reviving the high streets may mean that there are different sorts of outlets on the high street, and that is very much at the core of the high streets strategy.

[Lord Brennan of Canton (Lab)]

My Lords, earlier this year, the noble Earl, Lord Clancarty, and I, along with others, went to visit the Minister’s predecessor, my noble friend Lord Livermore, to discuss the possible extension of business rates relief to recording studios in a similar way that has been granted to other cultural and creative industry facilities. Has any further thought been given to this—I noticed that it was not in the Budget this time—and will my noble friend the Minister undertake to look into it and write to those of us who are interested in the subject?

[Lord Pitt-Watson (Lab)]

I spent quite a lot of time trying to learn about rates, but I did not have a briefing on recording studios. I am more than happy to write to my noble friend. Perhaps he could write to me on the points that he was raising with my noble friend Lord Livermore, and I can then catch up on where that is getting up to, as I do not have an answer for him right now.

[Baroness Neville-Rolfe (Con)]

My Lords, this Question recognises the parlous state of many high streets, due in large part to taxes of all kinds, including national insurance contributions and business rates, and indeed the impact of the higher minimum wages and increased energy costs and parking charges. Will the Government now see sense and reduce the burden of taxes and regulation that they have imposed? We all care about our high streets.

[Lord Pitt-Watson (Lab)]

I can only reiterate what was in the Budget: pubs and venues have 20% off, other rates are frozen in real terms and, most specifically, 70,000 high street venues will now no longer be liable for rates. That is a very substantial incentive, I hope, for the rebuilding of high streets, together with the wider high streets strategy.

[Lord Cromwell (CB)]

The Minister recognises that this is an evolving situation. I am sure he also recognises that many start-ups, which he referred to earlier, start in residential properties. Is he aware that, increasingly, clauses are being inserted into residential tenancies precluding the starting of a business or making the tenant liable for any rates which arise should the business be discovered by the council?

[Lord Pitt-Watson (Lab)]

I say to the noble Lord that, if there are specific instances where he feels that this is problematic, I would be more than happy to address those and see whether something can be taken forward. Of course, it would be something pretty fundamental, because this is about the agreement between the tenants and the landlord, but we would want such an agreement to be focused on the reviving of our high streets.

[Lord Watts (Lab)]

My Lords, is it not the case that our city centres and shopping areas have been in decline for over 20 years and the previous Government did nothing about it? This Labour Government have a string of measures to regenerate our towns and cities. Should not the Opposition be ashamed of their past record?

[Lord Pitt-Watson (Lab)]

The answer is yes, is it not? I have talked about the rates, the £210 million for the community assets programme, and empowering the business improvement districts—did noble Lords know that they raise £185 million in voluntary rates to improve the high streets? That is fantastic. There are also the model designs for high streets, hospitality zones, and putting the high street first when thinking about new public buildings. This is a programme to revive the high street, as my noble friend says, after many years of neglect.