Oral Answers to Questions

Derek Thomas Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Robert Jenrick]

The people of the north-east of England voted to leave the European Union; I know that the hon. Lady takes a different view, but we are trying to deliver on the outcome of the referendum. Had she voted for the withdrawal Bill, these matters would, of course, be progressing. As my right hon. Friend the Chancellor has already said, we are guaranteeing funding to the beneficiaries of all EU structural funds to 2023, so there is a degree of certainty as we move forwards. But the sooner that this House can coalesce on a good deal and that we can leave the European Union in an orderly fashion, the sooner this matter can be cleared up.

[Derek Thomas (St Ives) (Con)]

My constituency and the rest of Cornwall continues to be one of the less developed areas, even though there is much going for where we are and where we live. What would the Minister say to my county, the Duchy of Cornwall, about how soon it can expect to really contribute to the process of the shared prosperity fund?

[Robert Jenrick]

As I have already said, we intend to consult later this year. I strongly encourage my hon. Friend’s constituents to take part in that consultation; he and I have already spoken about this. I have met representatives from Cornwall Council, for example, to talk about the issue and some of the projects that they care strongly about—including, of course, the stadium in Cornwall, of which my hon. Friend has been a strong proponent.

Communities: Charities and Volunteers

Derek Thomas Excerpts

Wednesday 13th February 2019 Commons Chamber

[Derek Thomas (St Ives) (Con)]

It is a great joy to speak on this subject, to be an MP who has the privilege of visiting charity and voluntary groups whenever I can, and to represent a part of the country where community and voluntary groups are such a rich part of the local fabric of society. Following the hon. Member for Croydon North (Mr Reed), I shall enjoy talking up the great work these groups do. The last thing they need is for us politicians to get more involved. We should allow them to get on and do the work that they do, while recognising that the state has the responsibility to create the environment that they need.

As I said, one of the joys of being an MP is to meet and support voluntary groups, which I do as much as I can but particularly at the beginning of the year. Since I was elected, I have been putting on Big Thank You events over a few weekends in January and February. They were inspired by the work of the loneliness commission and the sad loss of our colleague Jo Cox. Getting groups together to share their experiences and what they do is so valuable. I wish briefly to name-check a few groups that I met just a couple of weeks ago, to celebrate what they do and their great offer to my constituency. The events took place in the three main towns in my constituency—Penzance, Helston and St Ives—and are examples of how charities are connecting communities and addressing loneliness and isolation.

First, I hosted an event this year at Helston bowling club. When I met members of the club last year, they were so inspired by the opportunity to work with other charities that they started Saturday morning community bowling. They opened bowling up to the community, and now people can do indoor or short-mat bowling and outdoor bowling. Lots of people turn up—they do not always bowl; they drink tea and coffee and eat cake—and they have seen a large growth in members and numbers, just because they are able to offer some sense of community to people who are otherwise on their own.

I had the great joy of going to an event to meet the group that runs Tea Love and Cake, or TLC, which brings together large numbers of mainly older people. A lovely bunch of lady volunteers go around picking people up, bringing them into a community room in Marazion and entertaining them for the afternoon through various—dare I say—lightweight exercises, along with tea and cake. They came to an event and shared a bit about the incredible work they have done to encourage lonely people.

The St Ives community bus was funded by the Department for Transport, as has been the case for several other community organisations in my constituency. The volunteer drivers from the bus service talked about how they pick people up every day of the week, running them to and fro between different organisations and groups so that they can be part of the community in which they live.

I met some young mums who run a breastfeeding support group for mums who struggle in that area. It is a voluntary group that gets together to help other mums.

The Saturday Gang is a group of volunteers who bring together people with learning disabilities on a Saturday. Again, they have tea, cake and coffee. They help people with learning disabilities with some of the challenges they face.

The National Coastwatch Institution started in my constituency, and I was glad to meet its volunteers. There are huge numbers of well-organised volunteers who spend all the daylight hours, all year round, watching our coastline, keeping people safe and reporting it if people are at risk of getting in trouble. It is an amazing organisation that gives people the opportunity not only to have friendship and community but to do the vital job of keeping the people in the waters along our coastline safe.

Around the time of Parliament Week last year, I had the privilege of going to so many different groups over two or three weeks. The guiding and scouting group came along to the events and talked about their fantastic work to support young minds suffering from a bit of anxiety. That is a fantastic piece of work.

We are doing a really interesting piece of work by bringing together some of the groups I have mentioned to take from supermarkets food that is not out of date—it is perfectly okay—but surplus to requirements. They are processing that food into good, healthy, nutritious meals. The plan is to teach parents how to cook using raw materials, which is a skill that many of us have lost—including, I am afraid, myself. They provide vacuum-packed meals—fantastic, healthy food—that can be warmed through quickly. I do not know of anywhere else in the country that is doing this. They slice and freeze-dry bananas. If Members know anything about bananas, they will know that they do not freeze, but when they thaw these ones, they are exactly as they were when they cut them up. It is pretty impressive and I think they should patent the process.

Age Concern, a fantastic organisation across Cornwall, does a great job of connecting communities and providing some sensible ideas about how we can support older people at home and how we can help them avoid going into hospital. It highlights the fact that the state does not have all the answers—it should never have all the answers. The voluntary community does something that we cannot do, and we should encourage it, support it and give it the freedom to do a great job. I am so proud to be an MP of west Cornwall and the Isles of Scilly where many, many people find fulfilment in volunteering, supporting each other and helping some of our most vulnerable people.

Sport in the UK

Derek Thomas Excerpts

Monday 4th February 2019 Commons Chamber

[Derek Thomas (St Ives) (Con)]

It is a pleasure to follow the hon. Member for Harrow West (Gareth Thomas). It will come as no surprise to the Minister that I am making the case tonight for a stadium for Cornwall. Dr Caroline Court, director of Public Health Cornwall, said in Cornwall’s physical activity strategy:

“Physical activity is a key component in improving the health of the local population… Working together with sectors such as education, sport and leisure, planning, transport and economic development, we can achieve a step change for the health and prosperity of all of Cornwall’s residents.”

Mike Thomas, the director of Cornwall Sports Partnership, wrote:

“Inactivity is a stubborn long standing problem, which without intervention is not going to go away. We cannot afford to be complacent and the situation could get worse. Opportunities to be active in everyday life are engineered out of our lives and older residents in Cornwall spend longer in ill health than in other parts of the country.”

Mr Thomas—no relation—concluded:

“Never has the need to reduce inactivity levels in Cornwall been more urgent.”

The vision statement for Cornwall Sports Partnership reads:

“The vision is a future where everybody in Cornwall and the Isles of Scilly is active as part of daily life, regardless of age, gender, culture or circumstance.”

Its 2020 target is that 50,000 more people in Cornwall and the Isles of Scilly will be more physically active as part of daily life by 2020. Its strategy has five key themes: physical wellbeing, mental wellbeing, individual development, social and community development, and economic growth. At the time of writing the strategy in 2016, 42% of children aged five to 15 in Cornwall were described as inactive—42%—and 28% of adults were described as inactive.

Hon. Members can see why so many of us in Cornwall are working so hard to deliver the stadium for Cornwall project. What is the stadium for Cornwall? It will be a multi-use sports and education facility, and a centre for the promotion of health and wellbeing across the duchy. It will be the permanent home of Cornish Pirates and Truro City FC, with an accessible location, all-weather pitch, improved facilities, and the sharing of costs will put both clubs on a long-term sustainable footing. There will be 180 days of community-based sport on an all-weather pitch. Meanwhile, a new sports and leisure suite, to be managed by Greenwich Leisure, will meet the strong and growing demand in the surrounding districts.

What have we been doing to deliver the stadium? In 2009, I was involved in and part of a working group on developing the scheme. In 2015, we caught the attention of the Conservative Government, and we were promised Government support to deliver the stadium. Direct central Government funding is needed. This ambitious and much-needed stadium for Cornwall project is requesting just £3 million of Government money to unlock a further £11 million. The Minister has been clear this evening that this Government are committed to the health and wellbeing of everyone and to reducing demand on NHS and care services where possible.

It is important that the Government get behind this stadium because the Cornwall Sports Partnership is nowhere near delivering the extra 50,000 more people in the Cornwall and the Isles of Scilly being more physically active as part of daily life. It is already accepted that the geography of Cornwall presents challenges for access to sport and that Cornwall is not receiving its fair share. Sport England acknowledged just last month that there is a rural location factor and that access to and between facilities is a real issue in Cornwall. It also acknowledged that there has not been the same investment in Cornwall as in other parts of the country.

The stadium for Cornwall project is committed to delivering better health outcomes, improving the lives of vulnerable adults and families, improving the physical and mental health of children and young people and increasing the aspiration of young people, especially those who are disadvantaged. Those of us who have been engaged in the project for some time recognise that there is significant political will for the stadium to be built. We are also confident that this is a sound investment for the Government, because it provides an opportunity to improve the health and wellbeing of tens of thousands of people of all ages across the duchy.

Those who have been involved in the stadium for Cornwall project for a long time believe that the Government would welcome the opportunity to back and fund this initiative, but we are also perplexed. Given the positive case I have set before the House today, I cannot pretend that the stadium for Cornwall partners are not frustrated by the hurdles we are having to jump over and perplexed by the hoops we are having to jump through to secure just 20% of the funding for an initiative that delivers on something at the heart of Government funding.

I remind the House and the Minister that never has the need to reduce inactivity levels in Cornwall been more urgent. Will the Minister please take note of this challenge and do whatever is in her capacity to deliver this sound investment for Cornwall’s health and wellbeing?

ONS Decisions: Student Loans

Derek Thomas Excerpts

Tuesday 18th December 2018 Commons Chamber

[Mr Speaker]

What the hon. Member for Glasgow North East (Mr Sweeney) conveyed to the House was quite extraordinarily interesting, but most of it did suffer from the notable disadvantage that it did not constitute a question. We got to a question mark very belatedly.

[Derek Thomas (St Ives) (Con)]

The ONS decision actually reminds us that the education of a large number of university students is funded by the taxpayer. That is welcome for those who come from deprived areas and may not earn the £25,000-plus that we would like. Will the Chief Secretary look at fairness across the system, so that people who do not go to university but want to study and train locally can get the skills and opportunities they need?

[Elizabeth Truss]

Yes, we are looking at that. We are looking across the board at the value for money of Government investment, which is significant in the education system, but also at the impact on individual students.

Oral Answers to Questions

Derek Thomas Excerpts

Tuesday 11th December 2018 Commons Chamber

The Chancellor of the Exchequer was asked—

[Derek Thomas (St Ives) (Con)]

1. If he will take steps to increase funding for sporting infrastructure in Cornwall.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government’s investment in sport is delivered through Sport England, which has invested £9 million in sport and physical activity in Cornwall since 2013, including £3 million for sports facilities.

[Derek Thomas]

Dare I say, Mr Speaker, that your tie today is a fine one?

The Minister will be aware that I have been working with stakeholders in Cornwall for 10 years now to deliver a stadium for Cornwall. A stadium is not only about sport, although we should celebrate Cornish sport, it is also about the health and wellbeing of children and adults right across the county of Cornwall. We have been working hard and we are nearly there with the money; what more can the Treasury do to deliver on this fantastic opportunity?

[Robert Jenrick]

I know that my hon. Friend has campaigned for a new stadium for Cornwall since even before he was elected. At his instigation, I met the Cornwall Council officer responsible for the project last week. With the Department for Digital, Culture, Media and Sport, we will continue to work closely with partners in Cornwall and Sport England to seek a means to bring this exciting project to a successful conclusion. We appreciate that, as the most remote team on the mainland, the Cornish Pirates deserve a fitting home for the future.

Business Rates

Derek Thomas Excerpts

Wednesday 13th June 2018 Westminster Hall

[Derek Thomas (St Ives) (Con)]

I thank the hon. Member for York Central (Rachael Maskell) for securing this debate. It is one that I wanted to secure, but I was not successful, so I am glad to have the opportunity to contribute again on the subject. The Minister might just groan when he hears me speaking again—he has heard the issues several times before, and I was glad to raise them in last week’s Opposition day debate.

I agree with my right hon. Friend the Member for East Devon (Sir Hugo Swire) that the Minister is engaged and keen to resolve this issue, and I understand how complex and difficult it is, so I will not be unfriendly in my remarks, but I want to reiterate some points I have made before, as well as bring up an issue that Cornish colleagues have been concerned about, but which has not gained any traction here in Westminster.

Issues with business rates lead me to believe that the system must be scrapped. One reason for that is the significant housing issue in Cornwall. It is a real challenge to provide and retain houses for local families and for people who live and work locally and who want to work at the hospital or in public services perhaps, but who just cannot secure the housing they need.

Everyone who lives in a house, unless they are on some sort of benefit, pays council tax, but if someone has a property that they own and which they choose to use as a holiday let, it can be registered as a business and they can avoid paying council tax altogether and then claim small business rate relief. I live in a three-bedroom house and I pay £1,600 a year to live in that property; I contribute, as lots of families do. A property next door is paying no council tax whatever, so it is not contributing.

We have a cross-party campaign in Cornwall on this issue. The real tragedy is that it is possible for a second-home owner to advertise his property as available for rent and also claim small business rate relief. Other Cornish colleagues and I have been raising that issue since we were first elected in 2015. I do not think the Government are fully engaged and fully understand the challenge that that poses for a community such as Cornwall, which needs every penny it can get. There is an opportunity for the Government to close the loophole and collect more tax, completely fairly. I urge the Minister to look at that again and to give his Cornish colleagues some cheer when it comes to trying to address our housing problems.

On the high street, my constituency also has shops that have closed since Christmas. There are lots of reasons, which include ridiculous parking increases and an obvious change in customer behaviour, but there are also business rates. In the 2016 review, St Ives saw quite dramatic increases, along with London and the south-east and other areas. It was a significant shock to many businesses.

I have examples that show that the way business rates are calculated does not make any sense. It is not clear why one shop should pay one amount while the shop next door pays something completely different. If we could understand the business rates arrangement, and if it were equitable, perhaps it would not be such a problem, but some shops have no idea why they are being charged such sums, and the check and challenge process does not help them.

Behind the headlines about the big retailers and multiples, a number of small businesses are closing or threatening to close. I have said previously in this place that about 11 businesses have told me that they do not believe they will see it out to the end of this year. Their problem is that they own their building or have a stake in it, so they have to carry on paying business rates even if they can no longer function as a business. That is a depressing message to send to what we used to describe as hard-working families.

The issue of business rates is complex; it is not just about consumer behaviour and people choosing to shop online. I disagree with my right hon. Friend the Member for East Devon. I can barely work out how to enter my card details online, so I tend to go to a shop when I have a spare moment.

Let me give examples of what is happening in my constituency. In Penzance, No. 8 has 90 square metres and is paying £14,750 a year. No. 8A, a similar property right next door—I cannot tell the difference between them—has 88 square metres, so 2 square metres less, and is paying £18,250. The Valuation Office Agency has not been able to explain the difference between them. The Minister has been engaging and helpful, and has asked about that. My office is working up a few examples of that nature so they can be investigated and studied. In one sense, I am being fairly unhelpful, in that I am raising an issue about which the Minister has already invited me to give him details. We are doing that and will get them to him soon.

In Helston, Betfred has 132 square metres and pays £13,500 a year. Next door, an independent deli in a much smaller building of 123 square metres—I would love to show hon. Members the photos—is paying £16,250. We have done everything we can to support that shop with the Valuation Office Agency, check and challenge, and the local authority, and to try to get it some help. It has had a small reduction, but the bottom line is that the owners get out of bed in the morning and have to find that money before they do anything else. They cannot understand why Betfred—a multiple next door, with a much bigger shop front and, sadly, a busier shop—is paying £3,000 a year less.

In St Ives town itself, there is a fudge shop of just 20 square metres that pays £13,750. St Ives fudge is world renowned, so it is understandable that people want to shop there, but that does not justify the fact that the Government or the Valuation Office Agency have decided that for just 20 square metres it needs to pay nearly £14,000 a year. There are lots of examples in St Ives town of what seem to be arbitrary increases.

I recognise that the Government have introduced lots of measures to try to support such shops and have enabled local authorities to offer help, but we have not seen the benefit. One pub in St Ives has had real help from Cornwall Council, but those other shops have been left to find the money month in, month out. The problem with St Ives—this is the nature of the high street in a popular town—is that an entrepreneur who wants to make a go of running a shop in the town centre will have to pay whatever rent is required, because that is what the absent landlord asks for, and there are few other options. They last perhaps nine or 12 months. When they leave, the rent goes up, and a new aspirational person comes in and tries to set up a business there. Their short lifespan has an impact on the business rate valuation, and on all the other shops, which might have been there for 100 years. Since Christmas, we have lost the local fruit and veg shop and all sorts of other businesses that served the community for 100 years or more.

The real tragedy is that, previously, holiday makers would flood to St Ives and buy what they needed for the week. Now they arrive and the truck from the local supermarket, which might be travelling from Truro, will turn up and deliver all they need for the week, above the very grocery shop that would previously have sold to them.

That is about consumer behaviour, but the real challenge is that business rate charges are not equitable. More than a year ago, I got the Valuation Office Agency to come to St Ives to meet a room full of concerned business owners, and it refused to comment on any individual business. All it did was explain how we could do the check and challenge. Those businesses are in a busy part of town, so they might be expected to be financially successful. The owners work extremely hard day in, day out to make their businesses work—often, they do not have time to jump through the hoops, although many of them did—only to be told they are paying the right amount of money.

I want to ask for three things. First, we should review the review. I know we have another review, but we need to look at what happened 18 months to two years ago, and at why some shops and retailers saw ridiculous increases. We need to do something quickly to address that now, because those businesses are going out of business.

Secondly, the point about local authorities keeping the money from business rates is important, but town and parish councils also need support, because there is often a double devolution situation, with powers shunted down without money. In Helston, the town council—it would be great to have a pilot, along with York Central—would love to grapple with its town, make it vibrant and support the high street, but it has no money to do that.

If we are not going to get rid of business rates, it would be great to allow town councils to retain 1% or 2% of the business rates collected. For Helston, that would be about £200,000 a year, which would give the council the power to transform the shopping experience on the high street and support the very people who are spending that money. I know that 1% or 2% is a lot of money, but it is quite a small chunk of what is collected and would give the towns a fighting chance.

Finally, I recognise that the Government need to collect the 2.4%—

[The Financial Secretary to the Treasury (Mel Stride)]

It is 24%.

[Derek Thomas]

Is it 24%? Golly! I know the Government need to continue to collect that money, and I am absolutely in favour of the transaction tax. A high street business should pay the same rate on an individual item as an out-of-town store or an online store pays. There must be a way to make taxes fair. There must be a simple way to make tax digital that enables the Government to continue to collect the money they need while ensuring the system is fair for all those who seek to sell items to customers.

I am grateful for the opportunity to speak in the debate, and I appreciate that the Minister is listening and wants to resolve the difficulties that high streets face.

Oral Answers to Questions

Derek Thomas Excerpts

Tuesday 17th April 2018 Commons Chamber

[Mel Stride]

The hon. Lady neglects to mention the fact that small business confidence in the UK is now in positive territory for the first time in many years. We have gone to great lengths within the tax system, as I have just explained, to reduce the burden on small businesses. We rolled out £9 billion of business rates relief in the 2016 Budget and a further £2.3 billion of relief in the autumn Budget last year. We will continue to be on the side of small businesses.

[Derek Thomas (St Ives) (Con)]

A significant number of businesses in west Cornwall and the constituency of St Ives, which I represent, are facing extreme hardship because of business rate increases in 2017 and 2018. This is becoming a burden that is too great for them to bear. What immediate help can the Minister make available to these hard-working business owners?

Taxes on Small Businesses

Derek Thomas Excerpts

Wednesday 18th October 2017 Westminster Hall

[Derek Thomas (St Ives) (Con)]

I beg to move,

That this House has considered the effect of taxes on small businesses.

It is a pleasure to serve under your chairmanship, Ms Dorries. I am grateful for the opportunity to raise this issue, which affects small businesses in west Cornwall and the Isles of Scilly, in the constituency of St Ives.

Some 87% of business enterprises in my west Cornwall constituency are classed as microbusinesses, meaning that they employ fewer than 10 people. In fact, 99% of all businesses in my constituency are small and medium-sized enterprises, employing fewer than 250 workers. Those small, locally run businesses provide the lion’s share of jobs and are the drivers of our local economy. If that is true in St Ives, it will be true elsewhere in the country, which is why understanding how the tax system helps or hinders small business is so important and why I am pleased to raise the issue today. It is also why I have dedicated a considerable amount of time since being elected in 2015 to meeting small businesses and understanding the issues facing them. In fact, I had a small business of my own until my election in 2015.

I know that this Conservative Government recognise the considerable contribution of small businesses, and I acknowledge and appreciate the work that has been done to address the tax burden and support small employers. Many of the 3 million jobs created since 2010 are within small businesses, which is, in part, a credit to Government policy. I recognise that there is no shortage of priorities for the Government and that navigating our way out of the EU will be time-consuming, to say the least. Despite that and—dare I say it—because of it, if there was ever a time to radically address the way businesses are taxed, it is now. While reform will be a challenge, it will undoubtedly yield benefits for our economy by improving productivity, driving wage growth, boosting full-time employment and spreading wealth across all corners of Great Britain, which is a particular concern and interest of people in the far west of Cornwall.

Time does not permit us to consider every aspect of business taxation, and I am not gifted with the brain that is needed fully to understand the complexities of the issue. However, I wish to cover three tax-related issues that stand out to me as clear opportunities for the Government to remove barriers for small business and demonstrate an understanding and recognition of the life of a small business owner.

The first issue is the VAT threshold. Small business owners in coastal communities such as Cornwall and the Isles of Scilly choose to curtail their business to duck under the VAT threshold of £85,000. That is not necessarily about tax avoidance, but more a desire to avoid another level of administration. One business owner on Scilly contacted me because the gallery she runs is set to cross the VAT threshold. She will then have to raise prices by 20% to break even. Since only one of the gallery’s 30 artists is VAT-registered, being able to claim back VAT would not compensate for that change. The gallery must either take the leap and accept that burden or close for the rest of the season.

The effect of the stifling VAT threshold in my constituency is reduced activity during shoulder and winter months, reduced employment opportunities, reduced Government tax income, depressed town centre activity and greater pressure on the hospitality sector during peak season. A guest house owner wanting to avoid registering for VAT may also choose to close early, reducing the availability of beds for visitors and removing altogether the potential spend of the visitor within the wider community.

I raise that issue now because leaving the EU presents an opportunity for the Treasury to consider raising the threshold to, for the sake of argument, £120,000. The Isles of Scilly would be a great place to look at if the Treasury wanted to assess the possible impacts and implications of such a change. The Government may find that it is a cost-neutral proposal.

Another benefit of that proposal is the potential to create greater job opportunities and encourage fresh blood into the tourism sector. That is particularly relevant in Cornwall, Scilly and other rural areas across the UK that struggle to retain young people. I am not suggesting that the proposal would address the skills gap entirely in remote and rural areas, but it would be a step in the right direction.

I assure the Minister and everyone here today that the need to address the VAT threshold in coastal communities is regularly brought to my attention by business owners. I am interested to hear if the Minister is minded to consider such a proposal and possibly a pilot in the constituency of St Ives.

[Jim Shannon (Strangford) (DUP)]

This is a very complex matter. I was doing some research on it and found that 59% of homes now own a tablet, 71% of UK adults have a smartphone and 97% of small and medium-sized businesses have access to online services. I make a plea to the Minister on behalf of craftspeople—people who know nothing about computers but everything about their hands. The person who has a computer in their house is probably a 13-year-old—

[Jim Shannon]

Does the hon. Gentleman agree that that point is not fully taken into consideration when it comes to the digitalisation of everything?

[Derek Thomas]

If the hon. Gentleman is happy to wait, I will be pleased to address that issue later.

I will move on to business rates, which have been quite a contentious and well-documented issue in recent months. There is no doubt in my mind that if the Treasury were inventing a taxation system from scratch today, the current business rate system would not feature in its proposals. The Government should scrap the current system of business rates and develop a fresh solution, injecting fairness into the tax system for small businesses and taking into account the growth of online shopping and supermarket home delivery services.

Structurally, there are many things wrong with business rates. The tax bears little or no relation to the success or activity of a business. The method used to calculate it is arbitrary. Colleagues will be aware that rates are calculated by multiplying the rateable value, based on the assumed rental value of the property, by a multiplier set by Government. Almost in recognition of that, and in an attempt to spare small businesses the business rate burden, the 2010 Conservative-led coalition and the two successive Conservative Governments have sought to address the problems associated with business rates. As a result, some businesses are eligible for rate relief, with many paying no rates at all. Others, for reasons that are beyond the understanding of most lay people, find they are charged 100% business rates, with many in my constituency experiencing considerable increases following the revaluations earlier this year.

The owner of a small independent delicatessen in Helston, where rents are relatively lower, approached me for help in March. Her current rateable value stands at an extortionate £17,750 per year. To rub salt into the wound, her rates are calculated as £149 per square metre, which is the second highest on the street. A chain bakery operating next door pays just £101 per square metre—32% less—and a national clothing chain on the other side of the street pays just £66 per square metre, which is over 56% less. If she enjoyed the same rate per square metre, she would be liable for no rates whatsoever. Because of her business rate charge, she is not sure that she can afford to stay in business.

The current business rate calculations unfairly discriminate even between businesses in the same part of the high street and do not enable businesses to operate on a level playing field. The great tragedy is that that example is not unique. There are similar cases of an independent photography shop in Penzance and a car paint-spraying business that is run by two youngsters who find that their business rate charge bears no comparison to similar units on the same industrial estate. In both instances, there is little hope for the businesses unless the Government act quickly.

Furthermore, in this age of online shopping and supermarket home delivery services, there are businesses essential to the health of the high street that find competing in today’s world nigh on impossible, despite their so-called privileged position on the high street. Historically, a place on the high street gave an advantage to the shop owner, and consequently the business rate levy reflected that. The ability of supermarkets to provide a delivery service direct to the door has undermined that advantage, and in many cases, despite the modern reach of supermarkets as a result of home delivery services, the supermarket pays relatively less in business rates than the high street shopkeeper. In fact, in St Ives, business rates for some supermarkets reduced this April.

To add insult to injury, rents in St Ives town are being pushed up by the perceived popularity of this iconic place. This year, because rate charges relate to rental values, independent business owners have seen their business rate charge rocket. Traditional retailers, such as bakers, butchers and grocers, face the risk of closing after decades of trading. High street chains move in, and ironically the very thing that drives visitors to St Ives is being lost, partly because of what I believe is a flawed business rate system.

Could it be that the cost of running a high street business, including a business rate charge, means that a greengrocer can no longer compete with a supermarket 20 miles away, now that it can deliver groceries to the family living in the flat above? Surely a modern-day business tax should recognise such changes in consumer behaviour. Furthermore, business rate charges take no account of external factors such as high parking charges, poor upkeep of the local area, closure of local public toilets, or a downturn in the economy, most of which have been experienced in Cornwall in recent years.

I have worked hard with a number of business owners who have found the business rate system profoundly challenging. That group includes a local pub owner, who came to the trade recently, full of enthusiasm. The pub employs 14 locals and is a focal point for the community. A rate review means that the pub now faces a 280% increase in business rates, which equates to an extra £13,000 a year. I recognise that the Government have done some work, and Cornwall Council is also doing some work, to help with that, but the fact remains that that rural pub owner’s rates have increased by 280%. As rural pubs close around us and communities are losing their rural services, issues such as this are hardly encouraging to new entrants.

Another major drawback is that business rates hinder aspiration. Should a small business benefiting from full rate relief wish to take on a second property, expanding both the business and the workforce, it will lose its rate relief and pay rates on both the new and the existing outlet. That step change discourages growth and innovation, and stifles all the benefits that growth brings, including job opportunities, staff training and career progression. That is hardly the intention of what I believe is a small business-friendly Conservative Government.

Before moving on, I want to stress the potentially unique role that traditional independent retailers such as bakers, butchers and grocers have in looking out for vulnerable people in the community—for example, the elderly. That is reason indeed to consider the potentially devastating impact of an outdated business rate system.

Finally, I would like to address the Government’s Making Tax Digital plan. I am in favour of moving across to digital tax reporting and I recognise the Government’s ambition to move to a fully digital tax system during the next few years. Will the Minister ensure that SMEs, including sole traders, have easy access to reliable software and training? Have the Government considered that for some businesses, a transition to digital-only tax will present a further serious administrative and financial burden? Strange as it may seem, there are still significant numbers of traders who are not naturally acquainted with online activity. I am reluctant to single out individuals, but I have met a number of sole traders who are not tech savvy, and the idea of making tax digital fills them with dread.

At present, I can see that there may be a benefit to Her Majesty’s Revenue and Customs in making tax digital, and I know that the Government are making allowances for areas of poor digital connectivity and plan to exempt some on very low self-employed incomes. Can the Minister please ensure that those exceptions are properly supported by accurate data, so that those who are not yet in a position to take part in the brave new world of digital tax reporting will not be unfairly penalised or discriminated against?

In conclusion, I believe that the Government could send a clear message that Brexit does not mean that important domestic priorities are being left on the back burner. The Government can do that by ensuring that small business growth is not stifled by out-of-date and grossly unfair tax systems. Taxation must promote growth so that, as a nation and within our communities, we can maximise all the benefits that a vibrant economy brings. As changes in consumer behaviour and better digital services lead consumers to gravitate towards online shopping and supermarket home delivery, we must ensure that the Government have a fair system of taxation and make changes to unlock the potential of our country’s entrepreneurial small businesses.

The Government must recognise that the negative impact of business rates and the profit hit from VAT registration often go hand in hand. Both taxes kick in at the crucial point when an enterprise is on the cusp of growing to a size at which it can be of useful benefit to the local economy and community. Will the Government please consider scrapping business rates once and for all, in favour of a tax that reflects the economic activity of all businesses concerned? Will the Government explore opportunities to raise the VAT threshold in coastal and rural tourist areas, and will the Government continue to listen carefully to those who recognise the move towards digital tax reporting but ask that we approach it with caution and understanding?

[Ms Nadine Dorries (in the Chair)]

I call Jim Shannon.

--- Later in debate ---

[Derek Thomas]

Unquestionably, since 2010 the Government have taken action to support small businesses and stimulate local economic growth. I am glad that the debate has provided an opportunity to remind the House of those measures. I am also glad that we have been able to discuss the introduction of positive employee support, such as the national living wage and auto-enrolment.

We are united in our desire to ensure that Great Britain remains open for business. Our desire is to make Great Britain a great place to run businesses, which is why my plea, on behalf of rural areas that are largely populated by small businesses, is to reform how we tax them. I thank everyone who took part in the debate. I apologise to the shadow Minister for what seemed to be quite an uncomfortable experience for him.

As we have heard, the business rate charge is hurting many independent small businesses. It is time to install some fairness into business taxation. I maintain that a tax system that reflects the activity of the business, rather than the building from which it operates, has to be fairer.

Question put and agreed to.

Resolved,

That this House has considered the effect of taxes on small businesses.