NON DOMESTIC RATE POUNDAGE (Hansard, 30 November 1994)

§ Viscount Ullswater

The 1995 revaluation will not lead to any significant change in overall rateable values in England. We therefore propose to set the poundage for England next year at 43.2 pence, in line with the increase in the RPI in the year to September 1994.

However, the revaluation will result in significant local and sectoral shifts in rateable values. The Department of the Environment's consultation paper, published last month, outlined proposals for transitional arrangements to phase in the effects of these shifts on rate bills. In the light of responses to that paper, and the generous package of support announced by the Chancellor of the Exchequer today in the other place, we now propose that no business will face year on year increases of more than 10 per cent., after allowing for inflation. For property with a new rateable value of less than £10,000 (£15,000 in London), the maximum real increase will be 7½ per cent., while for many small shops combined with living accommodation, the corresponding limit will be 5 per cent.

We estimate that nearly 1 million smaller properties and a quarter of a million larger properties in England will benefit from relief. One-third of beneficiaries will be shops. A further 170,000 properties will see reductions in their bills as a result of the revaluation. We are sure this will be widely welcomed by the business community.

The Exchequer contribution will cover part of the cost of the scheme. The remaining element will be met by limiting real reductions in rates bills, as proposed in the consultation paper. For 1995–96, the limits will be 10 per cent. for small properties and 5 per cent. for large ones.

Other details of the scheme will be as proposed in the consultation paper. Regulations giving effect to these changes will be laid before Parliament shortly.