David Morris is Member of Parliament for Morecambe and Lunesdale.
One of the things any MP has to get used to is to being challenged about what they’ve done before entering Parliament. I’ve got a few things I can point to. My time in the music industry always gets people’s attention. But I’m much prouder of setting up, from nothing, a small chain of hairdressers.
It was hard work, but then starting a business is never easy. It means long hours, plenty of stress, and some of the red tape and taxes you have to deal with certainly don’t make life any easier. From the experience I also know better than most how much business rates bills matter. For small businesses, and in particular those just starting up, getting any tax bill can be a nerve-wracking experience.
Now I wish business rates weren’t necessary, and the system is not perfect. But there are vital local public services to pay for, and business rates provide the best part of £25 billion towards them. Replacing them with another tax wouldn’t offer any easy answers either. Any shake-up would have its own problems, and that’s why business groups themselves told the Government that it should stick to what we have when the Treasury recently reviewed the business rates system.
Of course that doesn’t stop us from making changes to back those most in need of support, and I’m delighted that the revaluation will bring good news to many small businesses. In the midst of all the debates that have been going on one of the stories that hasn’t been told enough is the £6.7 billion package of business rate cuts which will mean 600,000 small businesses will no longer have to pay any business rates at all.
That’s no small achievement. That is the biggest cut to business rates ever made, and a huge number of small business for whom business rates will be a thing of the past. This is something it takes a Conservative government to deliver, and something we should be immensely proud of.
The debate hasn’t focused on these cuts though. Instead it’s been focused on the issue of the independent revaluations that are being made alongside them. These are a necessary part of the system. As local markets change it’s important for rates to reflect that those changes. This will mean that businesses in those areas where values aren’t growing as fast as others will see their rates bill come down, reducing their burden and giving them the support to grow. With the last revaluation done back in 2010, we’re now well-due another one.
For the majority of business this is actually good news. It will mean either a reduction or no change to the bill that they face. It’s good news for businesses in my local area too, with the average amount that ratepayers have to pay in Morecambe’s local authority, Lancaster City Council, falling over six per cent on average as a result of this revaluation. This will give an important boost to the high streets in our area, and make life that little bit easier for would-be job-creators looking to start their own business.
Inevitably with revaluations there will be losers as well as winners. The law says that revaluations can’t be used to deliver a tax rise or a tax cut – they have to be fiscally neutral. That’s why there is a £3.6 billion scheme of transitional reliefs which place an upper limit on the rises that can be imposed, and ensure large rises are phased in gradually, not made all at once.
Clearly some are still worried though, and it’s welcome news that the Communities Secretary, Sajid Javid, recognised the particular difficulties facing a number of businesses when he announced yesterday that alongside the revaluation they’re looking closely for the upcoming Budget at what further support can be given for those businesses that would see the steepest increases.
Sajid and I both joined Parliament back in 2010 and, while he’s faced some opportunistic criticism of late, it could hardly have been missed that ever since he joined Parliament he’s been tirelessly on the side of businesses. I know he can be relied upon to stand up for the job-creators that form the bedrock of our economy.
Working together with the Chancellor, this makes a strong, pro-business, Conservative team on the case. They are delivering the biggest ever cut to business rates, taking hundreds of thousands of small businesses out of the tax altogether. With their many years of combined business experience, and strong record of support for British employers, they are exactly the pair we need, and can rely on, to ensure the revaluation is fair, with the necessary support in place for businesses that at the heart of communities up and down the country.