HC Deb 19 November 1996 vol 285 cc822-4
6. Mr. William O'Brien

To ask the Secretary of State for the Environment what plans he has to review the application of non-domestic rates procedure to assist businesses in difficulties; and if he will make a statement [3123]

Mr. Curry

Local authorities have the power to grant up to 100 per cent. relief to any business that suffers hardship. We will shortly commence a review of that provision, beginning with a detailed analysis of the way in which local authorities use it.

Mr. O'Brien

The Minister will be aware that rates take a large percentage of small businesses' profits and that new businesses have difficulty starting up because of the rate element. Will he extend to urban areas the relief for post offices and shops that is being implemented in rural areas? Will he also consider the problems facing small garages and public houses, which suffer an injustice because their rates are assessed on turnover rather than profit? He knows perfectly well that local authorities cannot afford to give rebates to the extent that he has suggested because of the Government's standard spending assessment; it is for the Government to find resources to help those businesses out of difficulty. Will he accept that the responsibility is his? Will he do something about it?

Mr. Curry

The hon. Gentleman will know that there are rural areas as defined in the Local Government and Rating Bill in metropolitan areas, so an area that meets the criteria will benefit from all the advantages that the Bill will bring. The local authority will have the discretion to grant relief up to 100 per cent. to pubs and other businesses, both as a hardship relief and if so doing would serve the interests of the community.

Mr. Nicholas Winterton

Does my right hon. Friend accept that rural petrol stations are a vital service and that thousands of them have closed in recent times, not least because of the business rate? Bearing in mind the fact that the Government receive the total income from the non-domestic rate, does he believe that the Government should be obliged statutorily to make provision for extra allocation to local authorities that give assistance to petrol stations in rural areas?

Mr. Curry

Under the Bill, local authorities will be able to grant discretionary relief to garages if that is necessary in the interests of the community. If the garage serves as a general store, it will get the full relief, and 75 per cent. of all discretionary relief will be paid by the Exchequer.

Rev. Martin Smyth

I appreciate the concept of discretionary relief, but the problem is that it may not be given. Should not a principle be established that, in development areas, businesses that have been hit should be re-rated immediately and we should not continue to extract from them money that they are not earning? I am thinking particularly of areas such as Sandy Row in my constituency where, for 20 years, through dithering in the Department, businesses have been hampered.

Mr. Curry

Perhaps the hon. Gentleman will accept that it is always a great mistake to allow a long time to pass without revaluation. After all, before the revaluation of 1990, there were 17 years without one, which led to an enormous number of appeals when it finally took place. It is important to keep the lists up to date; then, everybody knows where they are and the changes that take place have a greater chance of being widely accepted.

Mr. Pickles

Does my right hon. Friend remember a time when businesses in trouble removed roofs to avoid penal rates of local taxation imposed by the Labour party? When the economy started to improve, those factories were in no position to provide jobs, leaving civic leaders to whinge about the number of cinemas in their towns, as the hon. Member for Sheffield, Attercliffe (Mr. Betts) did earlier.

Mr. Curry

I do indeed remember those circumstances; there was a migration of business from some of the places that most needed the revenues, jobs and the income they bring. That is why the Government changed the business rating system to give businesses a chance even where local councils were not prepared to give them one.