On business rates, the Government have announced a support package for all businesses worth £4.3 billion over the next three years. We have introduced permanently lower multipliers for eligible retail, hospitality and leisure businesses, including those on the high street. In addition, every pub and live music venue will get 15% off its new bill from April. The Government will also bring forward a high streets strategy later this year.
Many retail, hospitality and tourism businesses in my constituency traditionally give young people their first job, but with the Chancellor’s jobs tax, the unemployment rights Act and now huge increases in rates, many of those businesses are struggling to survive, so they just cannot afford to take on those young people. Does the Minister accept that his Government are the reason that youth unemployment is now higher in the UK than in the EU for the first time since records began?
One reason we have a challenge with youth participation in the labour market is the broken welfare system and the broken support system that we inherited from the previous Government. The proportion of young adults who are not in education, employment or training is broadly unchanged since the general election. It is too high, and it has to come down. That is why we are reforming our system and providing more support through actions such as our jobs guarantee. That is the right approach, as is the approach we are taking on business rates.
I recently hosted a hospitality roundtable in North East Fife. In an area that boasts such attractions as St Andrews and the East Neuk, one would expect to find an industry in rude health, but that was not the case. Indeed, one business could not attend because it was taking difficult decisions in relation to the business that day. The Minister has outlined a number of things that are in the purview of the devolved Government, and I will be taking those up with the Scottish Government. As a Scottish MP and a Scot representing Scottish businesses, however, I am looking for things that the Government can do on a UK level. The Liberal Democrats have been proposing an emergency VAT cut for hospitality businesses for some time, so why will the Government not consider that?
Business rates are a devolved matter. The changes that we have announced and the support that we have put in will have consequentials for funding for the Scottish Government. VAT is a broad-based tax that raises a significant amount of revenue for the Treasury. That is important in ensuring that we can manage our public finances and bring in the revenue to be able to get borrowing down, which this Government are doing and previous Governments failed to do. When the Liberal Democrats last had the chance, their choice was to put up VAT rather than cut it.
Many businesses in Winchester that I speak to on a regular basis talk about higher energy costs and national insurance rises, and many bring up the increased red tape that has resulted from the Conservatives’ failed Brexit project. Businesses in Winchester say that they want growth, not continued red tape. About two weeks ago, I spoke to one such business, RJM International, located just off the high street. For some reason, the Government refuse to even consider reducing trade barriers to the EU by having a bespoke customs union, but industry wants it and the public are increasingly supportive. Why will the Government not even assess the economic case for a customs union and why are they clinging to a failed ideology at the expense of growing our economy?
That was rather a long question.
This Government are fully committed to resetting our relationship with the European Union. As the hon. Gentleman highlighted, the previous Government did as much as they could to damage that relationship, damage our productivity and damage our working relationship with our nearest partners. We are seeking to change that: we are negotiating a sanitary and phytosanitary agreement; we are looking at electricity and energy; and we are looking at what more we can do to deepen our trading relationship, which will be good for productivity and jobs. People said that we could not make progress with both the EU and the United States, but we did not have to choose: instead, we are making progress with trading partners across the world.
Property valuations in York are particularly high, making it very difficult for businesses, not least this year and certainly over the next three years. Will the Minister say exactly when he will launch his consultations on pubs, on hotels, on business rates and on high streets? Would he be willing to come and meet businesses in York to hear why they are struggling with the decisions made by this Government?
We will be working across Government on the high streets strategy. Treasury Ministers will be working with colleagues in the Ministry of Housing, Communities and Local Government and the Department for Business and Trade. We will make progress on that in the coming weeks, with the strategy to report by the end of the year. We are in the process of working on the details of plans for the review of the pubs and hotels valuation methodology, and I will be happy to engage with my hon. Friend and Members from across the House to get that on a firmer footing for the future.
The Government’s business rate relief package for pubs has been hugely welcome, but other high street businesses in the retail, leisure and hospitality sectors are struggling. Will the Minister consider increasing the small business rate relief threshold to encourage growth and hiring? Over half the high street small businesses surveyed by the Federation of Small Businesses said that they would be in position to invest in or grow their businesses if the threshold were increased.
Around one in three businesses continue to benefit from the small business rates relief and do not pay any business rates at all, with an additional 85,000 benefiting from reduced relief as that is tapered away. At the Budget, we also announced changes to small business rates relief so that we can provide an additional two years of support for those businesses seeking to expand into a second property, to support those businesses to grow and to support their communities and jobs.
Traders like Sukibinder Singh, who owns Little Italy in Dudley, tell me how low footfall, empty shops and shoplifting are putting people off coming to the town centre. Will my hon. Friend set out what action he is taking on business rates and targeted reliefs to help bricks-and-mortar businesses to compete and prosper?
I thank my hon. Friend for her representation of Little Italy in her fantastic constituency. We are working on the high streets strategy. She is right to highlight that with long-term trends, whether the impact of the pandemic or of the shift to online retail, we need to look at this as a whole. On taxation and business rates in particular, we have for the first time provided a wedge in the tax system so that the rate that online giants pay for their warehouses is a third higher than the rate paid by the smallest businesses on the high street. There is a significantly higher multiplier for the larger businesses on my hon. Friend’s high street than for the smaller ones, but we will keep looking at the issue and at what more we can do to support businesses across the tax system.
I call the Liberal Democrat spokesperson.
Small businesses are the backbone of our economy, but the Federation of Small Businesses is warning that they will face a cost cliff edge in April because of the cumulative impact of all the new taxes and responsibilities put on them at the same time. During the course of the Finance Bill, we Liberal Democrats have repeatedly called for an assessment of the cumulative impact of taxes on hospitality and small businesses, including business rates. When the Government bring forward their high streets strategy, will it include an assessment of the cumulative impact of all tax changes—yes or no?
When we bring forward the high streets strategy, it will look in the round at what more we can do on regulation, licensing and the decisions that are made in the Treasury to continue to support small businesses and those on our high streets. That is incredibly important, and we will continue to look at that closely.