As has widely been discussed in the press, all businesses in England will soon start receiving rates bills based on a new valuation of their premises, something that is carried out by the independent Valuation Office Agency (VOA). While it is normal for these revaluations to occur every few years, considerable and genuine concern has been raised, across a range of sectors, that this could have a disproportionate impact on many small, independent businesses, particularly in London and the south-east, where land values are especially high.
Indeed, given the nature of the market in London, we have a situation where our capital is the only region to experience a net increase in its business rate bills. Rateable values in London have increased from all sectors by 24% – from £16.3 billion in 2010 to £20.3 billion – and in the Borough of Bromley alone by just under £75 million over the last five years. In practical terms, that results in an increased and unfair tax burden on many business owners.
That is why I have been calling on the Government to take further steps to help small, independent businesses in areas like ours, building on the help the Chancellor announced in the Autumn Statement last year. In particular, I have been pushing the Treasury to give businesses more time to adapt to and manage this increase, as well as calling on Ministers to implement a sliding scale of transitional relief, which, unlike the current package on offer, will ensure no businesses face a cliff-edge, or a considerable hike, in their bills.
In the long-term, I have been very clear that we need a proper structural review of the whole system. The tax is frankly out of date and does not reflect modern business practices. For example, due to how they operate, online retail giants like Amazon will see very little change in what they pay, whereas small businesses, like those on our highstreets, will comparatively face a much larger increase.
As co-chair of the APPG for London, I first wrote to the Chancellor about this problem last November, a copy of which I have attached at the bottom of this page. I have also discussed it over the past week on a number of radio shows:
In a welcome statement on Wednesday, the Communities and Local Government Secretary, Sajid Javid, announced that the Government will be looking at what more can be done to help businesses before the Budget, which takes place on 8 March. He also agreed to meet with me, Bromley Council and local business representatives to discuss a constructive way forward on this. That is something I am currently in the process of arranging.
During the debate on Wednesday I also wanted to highlight a number of other issues related to local government finance which, if reformed, could help well-run, efficient councils like ours. In particular, I discussed the need for local authorities to be able to generate more income locally, and how better cooperation between councils and local health services can improve outcomes for residents. My speech can be read in full here:
|APPG for London to Chancellor - Business Rates Revaluation - Nov 2016.pdf||234.84 KB|