Midland businesses ‘will see taxes fall’ Javid: Rate changes will give Midlands ‘the edge’
CONTROVERSIAL changes to business rates will mean thousands of businesses across the Midlands face lower tax bills, according to Local Government Secretary Sajid Javid.
They will save almost £230 million between them, he claims.
Mr Javid, MP for Bromsgrove, highlighted the savings for Midlands businesses as the Chancellor faced a rebellion from his own MPs over the changes.
He spoke as Greater Birmingham Chambers of Commerce backed calls for a rethink over the new rates which could see some businesses, particularly in the south of England, face higher bills.
Rates are being updated for the first time in seven years to bring them into line with property values, but backbench Tory MPs have warned that this will hit some firms with ‘eye watering’ increases, and will badly hit small businesses, including those trading on the High Street.
But Mr Javid, along with Chief Secretary David Gauke, have written to Tory MPs complaining there has been a “relentless campaign of distortions and half-truths” about the move, in an attempt to stave off a rebellion over the busi- ness rates revaluation. Latest figures from the Department for Communities and Local Government show businesses in the West Midlands will benefit from a fall by 7 per cent and the East Midlands will benefit from a three per cent reduction in bills before inflation and transitional relief – a fall of £230 million a year.
Chancellor Philip Hammond this week told Conservative MPs he was “listening” to their concerns.
Rates in Prime Minister Theresa May’s Maidenhead constituency, west of London, will rise by an average of 10 per cent while Chancellor Philip Hammond’s Runnymede seat in Surrey will see increases of about 13 per cent.
But thousands of businesses across the Midlands are set to benefit from a five per cent fall in their business rates, claims Mr Javid. And the tax cut will give regional economies “the edge” to drive growth for the country as a whole, he said.
The revaluation of business rates, which will come into effect on April 1, will mean businesses across the country will get lower bills that accurately reflect changes in their local property market, he claimed. Mr Javid said the move would benefit the Midlands Engine, the Government’s name for the West and East Midlands, Ministers are encouraging the two regions to work more closely together.
He said: “We’re firing up the Midlands Engine with £392 million for transport, jobs and investment. But in order to truly back businesses in the Midlands we need to make sure they’re paying fair rates.
“On average, the revaluation of business rates will reduce bills by an average five per cent for businesses in the region, saving hundreds of millions of pounds each year.”
The Government said that nearly three quarters of businesses across the country will see no change to their bills, or a reduction.
For the minority who will see an increase, there will be a system of transitional relief, to bring it in gradually over five years, Ministers say.
That relief is worth £3.6 billion, and will mean increases in business rate bills will be phased in over the five-year period. This relief is on top of increases in small business rate relief.