Baroness Neville-Rolfe: Lower taxes will unleash UK enterprise and high streets are crying out for action on Business Rates
Former Minister and Tesco Director, Baroness Neville-Rolfe, writes ahead of her debate in the House of Lords on "Creating an environment which encourages business growth and job creation, especially in relation to the tax system".
I am moving a motion in the House of Lords today about recognising the benefits of an environment which encourages business growth, especially in relation to the tax system.
There are many good points about the Lords. In general they do a fine job in tidying up legislation and in our debates we identify and discuss many of the problems with which the nation and our society are faced. Yet I have been struck by how little attention we give to business. The same is true of the Commons. Yet we all know that business – industry, manufacturing, commerce, agriculture, construction, services etc – provides the jobs and the resources essential for comfort and for public expenditure on everything ranging from schools to defence. Of course Conservatives in Parliament are less culpable in this respect than members of other groups, but even they are less enthusiastic about business than I would like to see.
Hence I will be reminding ‘noble lords’ that it is much better to increase the size of the cake than to concentrate exclusively on dividing it up.
I will be mentioning the dreaded word - Brexit – but only to suggest that the failure to conclude matters, and the resulting uncertainty, is itself now one of the main factors holding business back. There is nothing markets like less than uncertainty.
I shall also be drawing attention to many areas which contribute to economic success notably education, where progress has been made in recent years; the continued need for fiscal responsibility, - the candidates for party leader have not covered themselves with glory in this respect; the need to keep regulations simple wherever possible, - I will cite the length of the tax code; the need for steady progress on infrastructure and other matters. But I will speak mainly on tax.
Now it may be true that changing the tax system cannot actually encourage enterprise; but it is certainly true that a bad tax system can discourage it. And small business is particularly important to a vibrant economy.
I will advocate a low tax culture. If we adopt such an approach then not only are we taking the correct moral stance, but we will boost the economy directly. Lower taxes boost growth.
On specifics in one debate one cannot cover everything, but I will mention in particular Stamp Duty and Business rates.
On Stamp Duty on land transfers I think it is widely recognised that the increases introduced by George Osborne went too far and are now inhibiting workers from moving. Some amelioration is needed.
The case of Business Rates is even worse. The nature of retailing is rapidly changing with online growing at the expense of the High Street. Yet the Business Rates system requires the tax yield to remain virtually constant despite the bankruptcies of major companies which are now a common occurrence. Radical action is needed to stop this and the take from the tax must be reduced.
It is also clear that HMRC will need to look to online services to contribute more to the public coffer at an early date. The matter is complicated, not least because of the international mobility of online businesses, and careful thought is needed on how this is done.
But to conclude we need to unleash enterprise across the economy. We need lower taxes; and our high streets are crying out for action on Business Rates now.
Baroness Neville-Rolfe is a Conservative peer