Uniform Business Rate (Hansard, 15 January 1990)

§ 46. Mr. John Marshall
To ask the Chancellor of the Duchy of Lancaster whether he plans to visit the county palatine to discuss the impact of the uniform business rate.

§ The Chancellor of the Duchy of Lancaster (Mr. Kenneth Baker)
I shall visit the county palatinate on 1 and 23 February. On 1 February I shall be speaking at a dinner of the Manchester chamber of commerce and I am sure that there will be ample opportunity to discuss the enormous benefits accruing to businesses in the county palatinate from the uniform business rate.

§ Mr. Marshall
Does my right hon. Friend agree that the uniform business rate is the most effective instrument of regional policy since the war? Will he reiterate the Government's willingness to reconsider the transitional arrangements for small businesses?

§ Mr. Baker
On the first part of my hon. Friend's question, the answer is most certainly yes. There are substantial benefits to businesses in the north—in the whole of the north, not just the north-west—as a result of the uniform business rate. The yield of business rates in the north-west will fall by about £300 million over the coming years, with substantial reductions of about 44 per cent. for factories, 16.5 per cent. for shops and 35 per cent. for offices.
On the question of transitional relief, my hon. Friend knows that arrangements have been made so that no small business will face a rise of more than 15 per cent. in real terms each year as the new uniform business rate is phased in. In London, which is one of my hon. Friend's particular concerns, the limit of transitional relief for small businesses is extended to £15,000 new rateable value as opposed to £10,000 elsewhere in the country.

§ Dr. Cunningham
When the Chancellor visits the north-west, will he talk to Mr. Duffy at his grocer's shop in Adlington, which is in the constituency of Chorley, as the Under-Secretary of State, the hon. Member for South Ribble (Mr. Atkins) is telling him? Mr. Duffy faces almost a doubling of his local tax under the scheme, which is the right hon. Gentleman's own work. When Mr. Duffy's poll tax is added, he will face an increase in his local taxes in excess of 100 per cent. Even allowing for the transitional arrangements, he is likely to pay a minimum of 25 per cent. more, which will be about £500 per year extra. What will the Chancellor say to Mr. Duffy?

§ Mr. Baker
I shall tell the hon. Gentleman what I should say to Mr. Duffy; that if we had kept the rating system, as a result of the overspending plans of Lancashire county council the rates this year would have risen by over one third, which would certainly be a great problem for Mr. Duffy, both as a small trader and an ordinary taxpayer. There is no doubt that this is a fairer and better system of local taxation for businesses and for ordinary community charge payers.

§ Dame Elaine Kellett-Bowman
Does my right hon. Friend agree that in future businesses in Lancashire will be protected from the appalling weight of the burdens thrust on them every year since Lancashire county council fell under the control of Labour, which is probably why the Labour party did not do too well in the by-election in Blackpool on Thursday? As my right hon. Friend has observed, under the old system, the increase this year would have been very nearly one third.

§ Mr. Baker
I agree with my hon. Friend. The advantage of the uniform business rate to businesses not only in the north-west but across the country is that local variations, which are largely due to overspending by Labour local councils, will be a thing of the past. In the Labour-controlled local authority of Manchester, which is one of the jewels in the Labour party's local authority crown, the rate poundage has increased over 10 years by 240 per cent. compound which, after allowing for inflation, is 44 per cent. That is an enormous burden upon businesses in Manchester.