Bill Esterson
Main Page: Bill Esterson (Labour - Sefton Central)(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Toby Perkins
Absolutely. My hon. Friend accurately predicts a future part of my speech, which I might none the less give Members the benefit of, as the facts on energy prices are worth repeating and this is an incredibly important point.
Not by accident, one-nation Labour is in touch with the issues that small firms are facing. We have gone out of our way to ensure that the voice of entrepreneurial Britain is not only heard, but spoken by Labour. Around 1,000 businesses attended Labour’s business reception this summer, and from Harlow in Essex to Stockton in Teesside, we have listened to thousands of firms of all sizes.
It is incredibly important to me as a former small business owner to be Labour’s small business shadow Minister. There is a wealth of private sector experience across the shadow business, innovation and skills team, but I am excited that Labour will fight the 2015 election with many more strong business voices standing for election in our colours. From internet entrepreneur Victoria Groulef in Reading West and educational solutions entrepreneur James Frith in Bury North to business owners such as Sophy Gardner in Gloucester and Emily Darlington in Milton Keynes, the face of Labour will reflect that enterprise spirit that embodies what one-nation Labour is all about.
Bill Esterson (Sefton Central) (Lab)
As another former business owner, I can guarantee my hon. Friend that the Labour party really does understand that the face of business in this country has changed. That is why this debate is so important. Government Members do not seem to appreciate just how many more businesses there are these days compared with when the business rate regime was set up. [Interruption.] That is why this debate and my hon. Friend’s proposal are so important. [Interruption.] The challenges of online trading and the number of businesses mean that we have to address this crucial issue not just on the high street but for businesses as a whole.
Toby Perkins
That is a powerful point, and it is revealing that when my hon. Friend talks about the reality facing those small businesses he faces barracking from the Government Members. They do not understand the reality of businesses in our communities, and they make that clear every day.
Bill Esterson (Sefton Central) (Lab)
I was going to welcome the remarks of the hon. Member for Enfield North (Nick de Bois).
Bill Esterson
I do welcome his opening remarks. He was absolutely right to say that business rates are a tax that is past its sell-by date. The need for reform has been well stated by him and many business leaders in the advice we have all received for this debate and over a much longer period. My hon. Friend the Member for Chesterfield (Toby Perkins) mentioned 1973 and the Heath Government. By way of context, it is instructive to consider the changes in business in the 40 years since.
When the hon. Member for Enfield North moved on to other matters, however—[Interruption.] I might detain him some time, I think. He talked about how councils should be supporting their businesses, and at the end he made some good suggestions about parking—I will give some examples of that from my own authority in a moment—but I disagreed with his point about 50% support for councils’ use of discretionary relief. I do not know the details of Enfield council, but the reality of the financial settlement that Sefton and other authorities in the metropolitan boroughs have received means that applying that 50% rule would be almost impossible, given the scale of the cuts to those authorities. In Sefton’s case, those cuts are more than 40%, and that is not untypical of the northern metropolitan boroughs.
Nick de Bois
I am not advocating cuts in social services or education. I am saying that there are areas of expenditure in a council’s budget that are relatively small and which, with 50% support, could make a massive difference to local retail shops.
Bill Esterson
I agree that small amounts of money can make a big difference to business—I will come on to that—but demand for social care for older and disabled people in places such as Sefton and the legal requirement to fund children’s services make it impossible to provide even relatively small sums of money, certainly on an ongoing basis.
Sefton has put aside a £1 million pot for the current financial year to provide support and has used it for some very good projects, including Christmas lights across the borough, in its various town and village centres, which has contributed. It also includes, I believe, £50,000 to accommodate free parking on Thursdays and Saturdays in the run-up to Christmas. That is part of small business Saturday, which my hon. Friend the Member for Streatham (Mr Umunna) introduced to this country and which was mentioned by my hon. Friend the Member for Chesterfield. Those sorts of initiatives, using small amounts of money, certainly work very well, but it is problematic to try to extend it across a borough with an initiative such as discretionary relief, when cuts of 40%-plus have been made.
In addition to the successes in Sefton on parking and the Christmas lights, we have a number of town teams, as I know do other Members, and they have supported some fantastic local businesses in the towns of Formby, Crosby and Maghull in my constituency alone. On Monday, I was pleased to go along to the opening of five small units in a disused shop in the centre of Maghull that the Labour borough council and Labour members of the town council had been instrumental in setting up. We have five traders, and I understand that trade is already brisk and that the initiative has been successful just in those first few days. That is a good use of the small amounts of money that the hon. Member for Enfield North mentioned, and it is quite right that we should talk about that.
I was surprised by the comments made by some Government Members about retailers. I think one or two of them implied that retailers were not important to the economy or the recovery, but they could not have been further from the truth. Retailers are at the heart of our communities. They and other businesses, particularly small businesses, suffer from high levels of business rates. When I travel round my constituency and meet small businesses, they raise the issue of business rates more than any other. Small businesses want to see action. The hon. Member for Enfield North mentioned the 2% freeze and the fact that the BRC and other business organisations have called for it. He is right about that, but they see it only as a first step—as something that is available because they feel that this Government will do it.
Those organisations also want to see what we are offering: a full business rate cut. We are talking about only a few hundred pounds with a 2% cap, whereas my hon. Friend the Member for Chesterfield is talking about a £450 cut. That is quite a significant difference, when costs are so tight and when we have retailers, as we all do, who are struggling to make ends meet and take enough money out of their businesses to survive.
Toby Perkins
Was my hon. Friend as appalled as I was to hear Government Members say, “Well, you know, £410 a year is only a pound or so a day to customers. It’s small beer”? If that is what Government Members think about business rates, does it not show how out of touch they are?
Bill Esterson
That is absolutely right. We have seen a massive growth in the number of small businesses. We now have 4.9 million businesses in this country; 40 years ago the figure was only 1 million. Of those 4.9 million, only 200,000 employ 10 or more people, while the vast majority employ a small number of people or are sole traders. For those businesses, a few hundred pounds makes all the difference and is a huge contribution. We were talking earlier about the difference that a small amount of money invested by a local authority makes, and the same is true when the money goes directly into the pockets of small business owners.
Damian Collins
Does the hon. Gentleman accept that the cut to national insurance contributions, which is introduced in April and is worth £2,000, is worth considerably more than this policy from the Labour party? What we are asking for in this debate is a bit of context. Labour Members—the hon. Gentleman is in danger of falling into this trap—are presenting a relatively small initiative as some panacea to help small businesses, when it will do nothing of the sort and is small when compared with other measures that the Government have put in place.
Bill Esterson
No, I do not think our policy is a panacea; I think it is an important initiative that would give support directly. Members were talking earlier about how we would pay for the measure by not introducing the 1% cut in corporation tax and how that money would feed through into small businesses, and this point is similar, because what small businesses need is direct help. Expecting that support to feed through indirectly through the economy means it will take much longer to help. The help is needed now; that is why our proposal is so important. I hope that hon. Members will support my hon. Friend the Member for Chesterfield and his motion tonight.
Nick de Bois
On a point of order, Madam Deputy Speaker. In the excitement of being called to speak so early, I forgot to notify the House that my wife runs a business, which obviously pays business rates, that was formerly my company. I want to put that on the record and I am grateful to you for allowing me to do so.
Simon Danczuk (Rochdale) (Lab)
It is a delight to follow the hon. Member for St Albans (Mrs Main). Let me start by declaring an interest: I have recently initiated a business rates appeal in regard to Danczuk’s Deli, which opens this Saturday in Rochdale. I thought it right and proper that I should put that fact—it is not an advertisement—on record.
I have been banging on about business rates for some time now. I was doing it even when it was unfashionable. It is funny how things change. A Labour leader has been cheered to the rafters at the Labour party conference, not for proposing to nationalise the FTSE 100 companies or anything like that, but for proposing to freeze and cut business rates. Labour is the friend of small business, the Conservatives are perceived as the friends of big business, and the Liberals do not have any friends at all.
Labour is the friend of small business, but it does not stop there. Everyone is concerned about business rates, including the Confederation of British Industry, the Federation of Small Businesses, the British Independent Retailers Association, the British Retail Consortium, the British Chambers of Commerce and the Forum of Private Business—the list goes on and on. In fact, I want to ask the Minister to name a significant business person who thinks that business rates are fit for purpose. I invite him to intervene on me if he can do so. Let us be clear: there is dismay and concern about the business rates regime, not only in the business community but on the Minister’s Back Benches. I have done a little bit of research, and found out that the following Conservative MPs have all raised concerns about business rates: the hon. Members for Witham (Priti Patel), for South Suffolk (Mr Yeo), for Altrincham and Sale West (Mr Brady), for Watford (Richard Harrington), for Nuneaton (Mr Jones), for Brentford and Isleworth (Mary Macleod), for Selby and Ainsty (Nigel Adams), for Enfield North (Nick de Bois), for Newton Abbot (Anne Marie Morris), for Worcester (Mr Walker), for Rossendale and Darwen (Jake Berry), for North Swindon (Justin Tomlinson) and for Crawley (Henry Smith). We have heard from more tonight.
Even this Government’s Business Secretary raised concerns at a conference in March, saying that the business rates regime was “old fashioned”, and that there were
“all kinds of hidden distortions”.
He went on:
“Is the valuation base the right one? That is the fundamental question we should be asking.”
Never mind asking the Minister to name a significant business person who supports the current business rates regime; can he name anyone in his own party or in the Government who does so? The silence is deafening, because the reality is that nobody supports the present arrangements.
There was a simple solution that was used to address the inequalities in business rates and to retain some fairness in the system: it was the regular business rates revaluation. But what did the Government do? They postponed the revaluation, which would have re-aligned business rates with property values. People, particularly those in smaller businesses, are asking why the Government would want to postpone fairness. What is the logic behind retaining unfairness? That question needs to be answered.
On 16 October, in the House, the Minister for high streets—the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis)—peddled the greatest line of all. He said:
“The biggest beneficiaries from a 2015 revaluation would not have been small shops, including in the north of England, but prime office space in London.”—[Official Report, 16 October 2013; Vol. 568, c. 817.]
That is simply untrue. In my constituency, people are paying more in business rates because the revaluation is not taking place. That has been proved. Cushman & Wakefield, a leading global property consultant, provides a quarterly central London index covering central London office space. It shows beyond doubt that the Valuation Office Agency had overestimated the effect on London offices of a 2015 revaluation and that, in fact, they would have paid more as a consequence of that revaluation. So I challenge what the Minister has said.
The British Property Federation’s lease events report, published last month, clearly states that
“retails outside of London and the South East saw rental income fall for all leases upon renewal or re-letting.”
Bill Esterson
One point that my hon. Friend is making is about the effect on retail. Is it not the case that tens of thousands of shops could close unless this issue is addressed, with the loss of hundreds of thousands of jobs? The jobs of young people would be particularly affected, because many young people start their careers in retail.
Simon Danczuk
My hon. Friend is absolutely right and he makes an important point; retail is the first rung on the ladder into employment for young people.