Baroness Scott of Bybrook (Con)

I will continue. When my noble friend Lord Davies of Gower tabled a purpose clause on the Terrorism (Protection of Premises) Bill, the noble Baroness, Lady Suttie, argued that it was unnecessary because it restated some of the language in the Long Title of the Bill. In contrast to the amendment that we are debating today, my noble friend Lord Davies’s amendment included a legal duty on the Secretary of State, as well as establishing a purpose clause giving it legal effect. This is all water under the bridges, though, and we hope that our friends on the Benches to my left will not criticise our use of purpose clauses when scrutinising future Bills. As I say, we on these Benches are very comfortable with purpose clauses which seek to probe the intentions of the Bills that this Government are bringing forward, so I welcome the noble Lord’s amendment. As the noble Lord, Lord Fox, says in his explanatory statement, there is a real question mark over the Bill’s impact on the Government’s plan to deliver on their stated aims of protecting our high streets and encouraging investment. Later in this Committee, I will seek to probe the impact of the Bill on larger anchor stores, which are often the key drivers of the footfall on our high streets and keep smaller businesses alive. I will also seek to understand more fully the impact that the Bill will have on the retail and major food shops, including supermarkets, which people across the UK rely on. We know that the Government’s original intention was to hit international businesses that have large, warehouse-style business premises, such as Amazon and other international tech giants, but it is not clear that the Bill achieves that goal effectively. There is a risk that the increased costs of multipliers will be passed on to consumers in very unexpected ways. The higher multipliers that the Bill will introduce are a tax on business. We need to understand better what impacts this business tax will have on jobs, growth and prices. The impact assessment that the Government have published to date is utterly inadequate. Although I am really very grateful to the Minister for his engagement on the Bill so far, I feel that we will need to hear much more detail from the Dispatch Box on the real-world impact of the Bill if we are to proceed with it. I turn to my stand-part notice, which seeks to question whether Clause 1 should stand part of the Bill. Clause 1 sets out the Government’s intention to create a system whereby hereditaments over the value of £500,000 pay at a higher multiplier. What they have failed to include in any part of the Bill, or indeed in the Explanatory Notes, is an explanation of why £500,000 was chosen as the threshold for the higher multiplier. Indeed, £500,000 seems entirely arbitrary, and the Government have not explained why that is the number. As was mentioned by several noble Lords from across the House at Second Reading, the Bill raises more questions than it has answers, and there is a complete lack of clarity. Not only do we not know why the threshold is set at £500,000, but we also do not know what the actual multipliers will be. The Government’s choice of setting the threshold in this way means that many businesses on our high streets will be forced to pay this higher multiplier. I agree that the business rates system needs reform, but I do not for a second think that this Bill achieves the reforms that our high streets need. There is an understanding across the board that businesses that operate online and occupy out-of-town warehouses should pay a larger amount of business rates, and such reforms have been nicknamed an “Amazon tax”. But the Bill does not achieve that on its own terms. We know that thousands of large shops will be caught by this threshold, and we cannot support a Bill that risks a decimation of our already struggling high streets across the country simply because the Government have failed to do their homework and have got their numbers wrong. We will be probing the Government’s proposed threshold as the Bill progresses. It is the job of Ministers to get this right, and we will be listening carefully to the Government’s responses to this challenge. The Labour manifesto committed to reforming the business rates system and to “level the playing field between the high street and the online giants”, so why does the Bill not do that? The arbitrary threshold set by the Bill will damage many high-street businesses and, coupled with the reduction of retail, hospitality and leisure relief, will not fulfil the Government’s claims that they intend to reduce how much in business rates these businesses actually pay. Again, the Explanatory Notes reference the higher multiplier as applying to “distribution warehouses … used by online giants”, but simply including a cut-off of £500,000, while it will tax online giants, will not protect other businesses. Although the majority of the businesses with a rateable value over £500,000 may be warehouses, not all of them are. Through a failure to target the policy effectively, the Bill is likely to have unintended consequences that will have a ripple effect on other businesses on our high streets. It is important to look at this Bill in the context of the wider decisions that this Government have made that force businesses to have higher costs. The Government have increased the minimum wage, which we support, and they have increased the employer national insurance contributions—a hidden tax, a job tax, that will hit the retail sector with a bill of £2.3 billion a year. Although this Bill alone may not cripple businesses, when considered with the other taxes that the Government have imposed on businesses, it very well could be the thing that forces businesses to close on high streets up and down the country. I thank the noble Lord, Lord Fox, who has provided a good contribution to this debate, and I hope that the Minister will consider the concerns that we have both raised.