HC Deb 12 February 1990 vol 167 cc56-7W
Mr. Austin Mitchell

To ask the Secretary of State for the Environment if he will estimate the increased rate levy on business under the uniform business rate over previous rate charges on business in(a) central London, (b) outer London, (c) the west midlands and (d) the south-east; and what research studies he has commissioned into the economic and social consequences of taking out these extra sums each year on (i) prices in the areas concerned, (ii) rents and (iii) attraction of the areas to inward investment.

Mr. Chope

As a result of the 1990 revaluation and the introduction of a uniform business rate on 1 April, the aggregate change in rate bills before taking account of the transitional arrangements will be:

  1. (a) Inner London—an increase of £610 million.
  2. (b) Outer London—an increase of £20 million.
  3. (c) West Midlands—a reduction of £220 million.
  4. (d) South East—an increase of £250 million.

The total amount payable by businesses as a whole will be broadly the same in real terms in 1990–91 as in 1989–90: but there will be a shift in the burden of rates of around £900 million from the north and the midlands to London and the south.

This will give a boost to existing businesses and stimulate investment in areas such as Grimsby, where rates will fall on average by 21 per cent. in cash terms without transition.

Because at national level the effect of the new system is broadly neutral the changes will not be inflationary. Where properties face large increases in rate bills there will be consequential downward pressure on rents.