Rating Reform (Hansard, 2 December 1987)

§ 9. Mr. McLoughlin
To ask the Secretary of State for the Environment what representations he has received from businesses in the north of England concerning his proposals for a unified business rate.

§ Mr. Chope
There is an enthusiastic welcome for our proposals, which will restore a fair basis of rating and relieve many businesses from the excesses of high-spending authorities.

§ Mr. McLoughlin
My hon. Friend is correct. Is he aware that business people in my constituency are greatly looking forward to the unified business rate? It will save them the problem each year of facing a Left-wing Labour council's rates increases at some 26 per cent. and threats of higher rate levels. Is my hon. Friend aware that my constituents are envious of other counties where rates are considerably lower? Is he aware that rates are an important part of a business's on-costs and that the sooner we have a fair system throughout the country and remove power from the commissars in the town halls, the better?

§ Mr. Chope
My hon. Friend is absolutely right, and I only hope that some day Opposition Members will understand how right he is.

§ Mrs. Margaret Ewing
Does the Minister accept that while there may be a welcome in the north of England for the proposed unified business rate, if he moves north of the border he will find great anxiety, particularly among small businesses, which have already been subjected to three revaluations since 1973? Will he, therefore, look in particular at the proposals and comments made by the National Federation of Self Employed and Small Businesses, particularly those from Scotland?

§ Mr. Chope
That question should really be put to my right hon. and learned Friend the Secretary of State for Scotland.

§ Mr. Gow
What messages of support for the uniform business rate has my right hon. Friend the Secretary of State received from our right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath)?

§ Mr. Chope
I am not aware that any such representations have been made.

§ Mr. Campbell-Savours
While I recognise that business people in Cumbria will pay 20 per cent. less under the unified business rate, is there not a cost? Is it not true that, under the poll tax — the compensating tax; the new rating system in effect—people in Cumbria, particularly west Cumbria, will find that their new rates are double or treble the previous amount? Will not the unified business rate mean that, while rates may be substantially reduced in areas outside the county of Cumbria, we shall lose our cutting edge as a Labour authority with low rating for businesses? Does that not mean that we shall no longer be able to attract business?

§ Mr. Chope
I do not agree with that at all. However, the hon. Gentleman is right in saying that Cumbria is a low-resource area. It has generally low rateable values, and at present it is being subsidised by the people of Birmingham. Often, poorer people in Birmingham are subsidising richer people in Cumbria. We think that that system is unfair, and that is why we want to do away with it.

§ Mr. Burns
Will my hon. Friend tell us whether, once the uniform business rate is in position, there will be any business ratepayer's consultations, as exist at present under the Rates Act 1984?

§ Mr. Chope
We have received representations from the Confederation of British Industry on that subject, and we 923 are seriously considering the future role for consultations. We consider it important that there should be continuing consultation between business and local authorities, because so many local authority decisions will affect businesses.

§ Dr. Cunningham
As the alleged enthusiastic welcome for a uniform business rate does not include the CBI, the Institute of Directors, the National Chamber of Trade, the Forum of Private Business Ltd., the National Federation of Self Employed and Small Businesses or the London Chamber of Commerce, all of which bodies oppose it, will the Minister tell us who supports it?

§ Mr. Chope
The hon. Gentleman misrepresents the position. For example, the CBI has accepted that the new system that we are proposing is a significant improvement on the existing one. Its only quarrel is that it feels that the excess amount by which extra payments have had to be raised from business over the past few years should be removed at a stroke. The proposal has many supporters in business.

§ Mrs. Peacock
Does my hon. Friend agree that, while there is concern in my part of the world about the domestic part of the rate reform, businesses — especially in Yorkshire—welcome the unified business rate because it is likely to lead to a reduction of some 20 per cent. in their rates?

§ Mr. Chope
I am grateful to my hon. Friend for pointing that out. Many businesses warmly welcome the prospect of the stability that will result from the new arrangements and the fact that it will not be possible for business rates to go up by more than the rate of inflation. That is one of the great advantages of the new system.