Business Rates

Kris Hopkins Excerpts

Wednesday 4th December 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

This has been an interesting debate and I welcome the opportunity to contribute to it. The Government have taken and will continue to take decisive action to drive growth and make Britain’s economy work for everyone. We have done so in spite of the need to reduce the massive deficit that was left by the last Labour Government. This debate is focused on business rates, but as the hon. Member for East Antrim (Sammy Wilson), the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) and my hon. Friend the Member for Folkestone and Hythe (Damian Collins) pointed out, we must consider the broader context.

The Government’s ambition is for the UK to be the best place in Europe to start, finance and grow a business. We have therefore identified barriers to growth and the measures that need to be taken to overcome them. To that effect, the Government will introduce a £2,000 employment allowance for all businesses in 2014, to reduce their national insurance contributions each year. Up to 1.25 million businesses will benefit, with about 450,000 of them being taken out of paying employer national insurance contributions altogether. More than 90% of the benefit of that allowance will go to small businesses with fewer than 50 employees.

In addition, a further 1% reduction in the main rate of corporation tax from April 2015 was announced in the Budget. The rate will be reduced to 21% in April 2014, and then fall to 20% in April 2015. Based on current plans, the UK will have the joint lowest corporation tax in the G20 and by far the lowest rate in the G7 by 2015. That will increase return on investment, incentivise activity across the economy and make the UK more attractive to multinational companies and foreign investors. Those actions will help our economy continue to grow.

We have also promised that we will cut through red tape and make it easier for small businesses to claim small business rate relief. We have doubled that relief, and the amount that small businesses can claim has now trebled. Some £900 million in relief was granted in 2012-13. That is not all. We have frozen the multiplier in real terms, so it has never risen by more than inflation. We have also given local authorities powers to grant their own business rate discounts and funded some 50% of that local discount grant.

I wish to refer to some of the substantial contributions that have been made this evening. My hon. Friend the Member for St Albans (Mrs Main) outlined the wider business aid that the Government have provided and the excellent work of Conservative St Albans council. My hon. Friend the Member for Northampton South (Mr Binley) challenged the credibility of the Labour party’s ability to propose options for business and called the deficit that it left “appalling”.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris) supported small businesses and welcomed the small business rate relief, but said that she wanted a transparent appeal process. We will shortly start a review, to which I am sure she will contribute. The hon. Member for Stretford and Urmston (Kate Green) also mentioned the appeal process, and I thought that she actually made a very good speech. The hon. Member for Sheffield South East (Mr Betts) mentioned appeals, too, and I look forward to hearing his contributions to the wider debate once the review is announced.

My hon. Friend the Member for Bury St Edmunds (Mr Ruffley) spoke in support of small businesses and the tax breaks that councils have introduced. He spoke passionately about local businesses in his constituency. My hon. Friend the Member for Burton (Andrew Griffiths), who chairs the all-party beer group, rightly talked up the pub industry, which makes a massive contribution to this country and provides significant small businesses in many villages, towns and cities. He encouraged us all to make the best of small business week by going to our local pub and drinking beer. I assure him that I will be taking his advice this weekend.

There were significant contributions from the hon. Members for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Wirral South (Alison McGovern), for Bolton South East (Yasmin Qureshi), for Swansea West (Geraint Davies) and for Sefton Central (Bill Esterson), and although I did not agree with much of the contribution from the hon. Member for Rochdale (Simon Danczuk), it was thoughtful and entertaining in places.

My hon. Friend the Member for Folkestone and Hythe (Damian Collins) made the important point that small businesses are the customers of big businesses, and he completely shot the fox of those Labour Members who do not like corporation tax cuts. The hon. Member for Mid Dorset and North Poole (Annette Brooke) mentioned her support for the Mary Portas pilot in her constituency and for the Localism Act 2011. She believes, as I do, that people on the ground in the local area know best and should be listened to.

My hon. Friend the Member for Enfield North (Nick de Bois) recognised the massive deficit that the Labour party left at the end of their time in government and that the debate was very much commanded by coalition Members, despite being an Opposition day debate. He also raised the issue of uncollected council tax, and rightly so.

This has been a helpful and interesting debate. We appreciate that at times it is tough for people out there and that budgets have been squeezed, and that is why we have taken action to help people. We have increased tax-free personal allowances to £10,000 from April 2014, saving a typical taxpayer £705. We have frozen fuel duty for three and a half years, saving nearly £7 on a typical tank of fuel. We have helped local authorities to freeze council tax and introduced tax-free child care to support working families with 20% off their child care costs.

The bottom line, however, is that we can do that in a sustainable way only by addressing the huge deficit left by the Labour Government. The economy is turning the corner and the deficit is down by a third. Some 1.4 million private sector jobs have been created in three years by the Government, and interest rates remain at a near record low, benefiting families and businesses.

We still have much to do to address the issues that Labour left us, but this evening I assure the House that the Government are listening to those concerns and will take further action as finances allow. I ask the House to support the Government amendment.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.