HC Deb 09 February 1999 vol 325 cc115-6
10. Mr. David Heath (Somerton and Frome)

What plans he has to reform the uniform business rate. [68273]

The Minister for Local Government and Housing (Ms Hilary Armstrong): In our July White Paper "Modern Local Government

In Touch with the People", we said that local authorities would be given the power to levy a local rate of up to 5 per cent. of the national rate, provided that the local authority had effective consultation arrangements with business, and subject to business agreement on the use of the money raised. We also said that we would consider reducing the rate burden on small businesses. We said that we would first consult on the details; a consultation paper will be issued shortly.

Mr. Heath

I am disappointed by the lack of action on the uniform business rate, which is innately unfair, particularly to small businesses. If the UBR is considered alongside other measures, such as the way in which the Food Standards Agency is to be funded, does it not appear that the Government's policies favour the superstore over the high street shop?

Ms Armstrong

The hon. Gentleman must have been disappointed with my reply, although I made it quite clear that we recognise the problems of small businesses and that we have agreed to consult them. I have already met representatives, and we shall issue a formal consultation paper in the near future. Perhaps the hon. Gentleman would like to respond to it.

Mr. Lindsay Hoyle (Chorley)

Will the Minister consider ensuring that north-west business rates can be spent by the new regional development agencies?

Ms Armstrong

The business rate is an important aspect of local government taxation and of the way in which local government is funded. We want to retain it for those reasons. It ensures that businesses and councils work effectively together, which is essential if local authority areas are to progress. Our White Paper proposals must be properly consulted on, so that we can, with business and councils, find an effective way forward.

Mr. James Gray (North Wiltshire)

Given the current state of farming, will the Minister reconfirm the important principle under which farming businesses are exempt from the uniform business rate? Would she go further by considering the plight of those who breed and manage heavy horses, as people do in my constituency? The horses are essential to organic farming, but breeding attracts the business rate. Will the Minister reconsider that disincentive to green farming?

Ms Armstrong

I have said that we will consult on the proposals in our White Paper. The hon. Gentleman will have noted that it contained no proposal to extend business rates to agricultural land.