One of my colleagues, Piers McCausland, has written a little piece over on ConservativeHome about the lack of local control of business rates. Assuming many readers of this blog do not read ConservativeHome’s local government pages I have copied the article below.
It raises an interesting point. Part of what makes a successful community are the businesses that settle there, and, therefore, surely the local government should have more control over what they are taxed. Of course, it was a previous Conservative government that centralised control of business rates, partly because they were being abused by some short-sighted councils who saw business rates as an easy and relatively painless source of extra revenue, resulting in excessive rate rises for the area’s businesses.
However, we’re now seeing those very businesses we want to encourage being hammered by central government’s failure to appreciate the impact of the end of transitional relief. The council is doing all it can to help businesses in the recession, but in some cases businesses faced bills that had quadrupled in size before the government belatedly stepped in. Piers raises the case of a launderette on St John’s Hill that faces closure because it just cannot afford the rates bill. I am sure it’s not the only business in a similar situation.
Business rates must return to local control or the Government will tax successful enterprises out of business
Cllr Piers McCausland is a member of Wandsworth Council and argues that the setting of business rates must return to local control.
Small businesses have financed the Government and have helped local councils pull up many rundown areas by their bootstraps. But precisely where these partners have succeeded, they are being pilloried by this Government.
Instead of fiscal sympathy in an economic downturn for those who have successfully regenerated their areas, they have bitten the hand that feeds them. Business rates have climbed into the stratosphere with retailers the hardest hit.
Soon the prosperous tomorrow will be replaced by rows of steel shuttered parades in your ward and wards across the country. For in truth there is precious little many local councils can do, though Wandsworth is proposing a hardship contribution for the hardest hit.
This blight is largely made at the centre with its demand for uniformity in business rates throughout England and Wales.
Businesses with a potentially prosperous tomorrow and “indigenous” businesses alike within these areas are hit.
In my ward, a launderette on St John’s Hill has seen its net business rate skyrocket. Its proprietor for 30-odd years says his margins are so tight it will have to close. The clientele is mainly working class. Where will these people go then?
The answer must be local accountability. The setting of local business rates must return to local control. The quality of local council policy and administration has improved since the early 1980s. It must be given a chance to shine here.