Business Rates Relief: High-street Businesses

Debate between James Murray and Suella Braverman

Wednesday 4th June 2025 Westminster Hall

[James Murray]

I thank the hon. Gentleman for raising the issue of the VOA. Its performance is very important for businesses across the country. I am sure that he will have seen our recent announcement that, this year, we are bringing the VOA into His Majesty’s Revenue and Customs, rather than it being an arm’s length body. Part of that is to save on administration costs—to protect the public finances—but it is also to ensure that we can work with it to improve its service as much as possible, to give the best and quickest possible service to businesses involved. I reassure the hon. Gentleman that VOA performance is very high on our agenda.

Hon. Members raised the impact of RHL relief on pubs, which is understandable, given the particular importance of pubs in all our local communities. Indeed, we had a competition for who has the best pub in their constituency. I will just about resist the temptation to list the pubs in my constituency, as I am here as a Minister rather than with my constituency hat on, but hon. Members should pop into the Duke of Kent if they are ever in Ealing North. To put this in context, the extension of RHL relief for this year under this Government is saving the average pub with a rateable value of £16,800 more than £3,300. That is a real, meaningful difference to pubs across the country. The Government have, of course, frozen the small business multiplier for this year as well. Taken together with small business rates relief, more than 1 million properties have been protected from inflationary increases in their bills this year.

Some hon. Members, including the right hon. Member for Stone, Great Wyrley and Penkridge, have argued that the RHL relief in this year should be higher. However, given the Government’s fiscal inheritance, it was not fiscally sustainable to continue the 75% relief, which cost £2.4 billion a year. Crucially, to repeat remarks I have made several times now, our approach from April 2026 will mean no more use of an indefinite stopgap measure. Our approach will instead offer permanently lower tax rates and the stability that those bring for businesses.

The Budget announcements and the changes I have just described reflect the Government’s first steps to support the high street. We want to go further, and modernise the business rates system. At the autumn Budget last year, the Chancellor therefore announced the publication of a discussion paper that sets out priority areas for reform.

[Suella Braverman]

The Minister says that he cannot afford the £2 billion price tag of maintaining the relief introduced by the last Conservative Government. How, then, is he paying for the £30 billion surrender deal in which this Government are giving up sovereign territory, the Chagos islands, to Mauritius?

[James Murray]

I would challenge the right hon. and learned Lady’s use of language, but that issue is rather outside the scope of a debate on business rates.

As I was saying, we published a discussion paper at the Budget last year, which invited the industry to help us to design a fairer business rates system that supports investment and is fit for the 21st century. Since publishing the paper last autumn, my officials and I have met more than 250 stakeholders across a range of sectors, including RHL and local government, and have received submissions from a range of businesses, including those from the constituencies of hon. Members present today. We are analysing the responses in detail, and the data and views shared by businesses will inform the business rates policy development process. In the summer, we will publish an interim report that sets out a clear direction of travel for the business rates system, with further policy detail to follow at the autumn Budget 2025.

It is worth my briefly drawing hon. Members’ attention to the fact that, beyond the business rates system, the Government are taking other steps to rejuvenate our high streets. We are introducing high street rental auctions to revitalise our high streets and tackle empty properties, which we know can fuel a spiral of decline in town centres. Through the English devolution Bill, the Government will introduce a new community right to buy to help communities to safeguard valued community assets. That will empower local communities to bring assets such as empty shops, pubs and community spaces into community ownership, helping to revitalise our high streets and eliminate vacant properties.

Alongside that, the new £1.5 billion plan for neighbourhoods programme will deliver up to £20 million of funding and support over the next decade to 75 communities across the UK, laying the foundation to kick-start local growth and drive up living standards. As part of the programme, local partnerships will be able to fund interventions focused on revitalising high streets. The Government will announce further plans to support high streets in the small business strategy later this year.

As we have heard, hon. Members are rightly concerned about the high streets in their constituencies. We are all passionate about the places where we live and that we represent, and we want them to thrive. As I have set out, the business rates system that this Government inherited has been failing to give high streets the long-term, certain and stable support they need, instead providing only stopgap help through RHL relief that has kept changing and has been repeatedly extended ahead of an annual cliff edge.

This Government are fixing the foundations of the business rates system, and that starts with permanently rebalancing the burden of RHL properties through introducing permanently lower tax rates from 2026-27.