Business Rates Relief: High-street Businesses

Al Pinkerton Excerpts

Wednesday 4th June 2025 Westminster Hall

[Dr Al Pinkerton (Surrey Heath) (LD)]

It is a pleasure to serve under your chairmanship, Ms Jardine; I believe this is our first time together in this situation, and I hope it is the first of many. I congratulate the right hon. Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) on securing this important debate. All of us in the Chamber today agree that high street businesses are at the heart of our communities. They not only offer goods and services, but provide valuable jobs, as the right hon. Gentleman mentioned. They support local families and create vibrant and connected town centres, yet they are under unprecedented threat. Across the country, businesses are being quietly but relentlessly squeezed out of our once-thriving town centres.

My constituency of Surrey Heath is often perceived as affluent, but that perception has arguably bred a dangerous complacency. Recently, I hosted a meeting of local businesses—a cross-section of local business owners from the health sector to hospitality, retail and financial services. The message I received was absolutely clear: the current business rates system, and particularly the changes to business rates relief, is creating considerably anxiety and uncertainty. The scaling back of business rates relief is compounding the pressures that businesses already face: rising national insurance, increased wage costs and inflationary pressures. Removing or reducing relief schemes at this time risks an existential tipping point for many high street retailers, especially smaller, family-owned and not-for-profit businesses.

In market towns such as Camberley in my constituency —and I am sure this is shared across all the constituencies represented today—the strains on the high street are already visible, with boarded-up shopfronts, dwindling footfall and declining confidence among business owners. As these local businesses close their doors, the risk is that residents will lose further faith in town centres and high streets and turn increasingly to online alternatives, accelerating the decline that I think all of us here wish to stem. While some exceptional businesses continue to thrive despite those challenges and headwinds, and they deserve recognition for that, many more are struggling under the cumulative weight of financial burdens, with reduced business rates relief tipping the balance from viable to vulnerable.

Business rates are paid in good faith, with the expectation that they will support the local environment, funding clean streets, better infrastructure and stronger town centres, but the reality is very different. To use the example of my constituency, in 2025-26 businesses in Surrey Heath will contribute over £30 million in business rates, yet less than £1 million of that—only 2.5% of all the business rates levied—will be retained in the local area, as a result of the tariffs charged by central Government, leaving local high streets without the investment they desperately need.

We need a reformed system that reflects the economic realities of all the regions of our country—not just the most deprived, but also those that may appear prosperous on paper but face deep-rooted structural challenges. I urge the Government to rethink not only their approach to business rates relief but the system of business rates altogether. It cannot be right that struggling local councils such as mine in Surrey Heath, which are teetering on the edge of section 114 notices, are expected to levy rates from local businesses, with local residents and business owners reasonably expecting that those funds will be used to enhance the local community and business environment, only for 97.5% of those funds to be spirited away by national Government. Even if we accept the need for some redistribution, surely that cannot be right, fair or just.