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Business Rates, the Unnecessary Evil

It’s often the case that a business will find the perfect location for their expansion, strike an attractive rental deal and then be hit by an extortionate business rate bill.

Yet the one bright spot in this common business gripe was the powers enshrined upon local councils by the Coalition government to enable them to cut their rates charges in order to help local businesses become more competitive.

The Localism Act of 2011 was supposed to enable this with chirpy Eric Pickles, the Communities secretary promising that it would prove a powerful magnet for local authorities to attract entrepreneurs

However the deal was that councils had to fund any business rate discounts from their own finances, which as everybody that has received a council tax bill for 2014/15 will know that like everyone else’s, their budget has been under pressure during this parliament.

Friend of Business Juice, Margot James, MP for Stourbridge, and PPS to Lord Green, Minister for Trade and Investment, asked local councils as to whether they had ever taken advantage of this new power.

Astonishingly, of nearly 200 responses, only 23 councils admitted to ever having done so with 168 confirming that they had never progressed any such policy.

In conclusion Margot said:

“It is very concerning that so few authorities are using these powers.

“We need to see more local authorities exercising these powers to reduce business costs at a local level.”

Defending their abject failure to act, Sharon Taylor, chair of the finance panel at the Local Government Association said:

“Businesses benefit from many of the services run by councils, who are trying to protect services despite a 40 per cent cut in funding since 2010.”

Anyone who has ever had the misfortune of trying to make sense of extortionate business rates will recognise this hard headed and unhelpful response. Indeed it is very much a moot point as to what benefit businesses receive from their local authorities. It is also ironic that in defending their members unwillingness to act the Association cites financial constraints, seemingly blissfully unaware of the recessionary climate of the past 6 years and the everyday sacrifices UK SMEs have to make to stay in business.

Margot has proved a huge supporter in our campaign for greater fairness in the business energy market, we hope her tenacity and enthusiasm for helping UK business brings the full pressure to bear on Britain’s miserly local authorities.


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