It’s time to de­mand a rev­o­lu­tion

Country Life Every Week - - Letters To The Editor - Fol­low @agromenes on Twit­ter

THERE comes a mo­ment when we have to give up on re­form and de­mand rev­o­lu­tion. It isn’t some­thing that Agromenes nor­mally pro­poses, but Phillip Ham­mond’s first Spring Bud­get is the last straw. Al­lot­ing £300 mil­lion to a hard­ship fund for those hit by Busi­ness Rate hikes and a spe­cial deal for pubs is sim­ply stick­ing plas­ter for a sys­tem that is clearly bleed­ing to death.

Busi­ness Rates are no longer a sen­si­ble way to raise money for lo­cal pur­poses. They were orig­i­nally de­signed to en­sure that those who made money in a com­mu­nity should be levied for the ser­vices that were lo­cally pro­vided. Lo­cally set, lo­cally levied and lo­cally spent: it was a log­i­cal and wholly de­fen­si­ble sys­tem. Reg­u­lar and in­de­pen­dent up­rat­ing was the way in which the bur­den was shared and the rate­able value did pro­vide some rea­son­able sur­ro­gate for abil­ity to pay.

On a prac­ti­cal level, none of these con­di­tions now ob­tain. The Busi­ness Rates are largely fixed by na­tional reg­u­la­tion, largely col­lected for the Trea­sury and largely dis­trib­uted ac­cord­ing to a na­tional for­mula. In gen­eral, all busi­nesses put money into a pot, have no con­trol over where it goes and are sub­ject to rat­ing reval­u­a­tions that re­sult in huge win­ners and losers on a ba­sis that is at best opaque and, at worst, ut­terly in­com­pre­hen­si­ble.

It’s a bad deal for all those who are caught by the re­quire­ments, but what makes it worse is that the deal loads on busi­nesses costs that are not borne by their com­peti­tors. The lo­cal shop­keeper pays his rates, but his mail-or­der com­peti­tor doesn’t, yet ev­ery mail-or­der house ben­e­fits from law and or­der, trad­ing stan­dards, ed­u­ca­tion and roads, all of which are pro­vided, at least in part, from the Busi­ness Rates.

Re­tail traders in cities and mar­ket towns are strug­gling to com­pete. That ex­cel­lent chain John Lewis, owned and op­er­ated by its staff, has had to cut dra­mat­i­cally this year’s pay­out to its part­ners, so dif­fi­cult has trad­ing be­come. All over the coun­try, in great cities as well as small vil­lages, pubs, garages and shops are clos­ing, their demise has­tened by the Busi­ness Rate sys­tem. No one wants peo­ple to be favoured sim­ply on grounds of tra­di­tion, but this is about fair­ness. We all should be an­gry when some are charged, but oth­ers get away with pay­ing prac­ti­cally noth­ing.

Such a sit­u­a­tion is the an­tithe­sis of a free mar­ket. Shack­ling one group while ad­van­tag­ing its com­peti­tors should be wholly un­ac­cept­able to a Tory chan­cel­lor, yet Mr Ham­mond’s Bud­get only talked of gen­eral con­sul­ta­tion on Busi­ness Rates and there is no hint that he’s en­vis­ag­ing the nec­es­sary rev­o­lu­tion. Coun­try peo­ple, in par­tic­u­lar, should be con­cerned at this. The present sys­tem is dam­ag­ing ev­ery­where, but it’s par­tic­u­larly de­struc­tive in ru­ral ar­eas, where there are al­ready so many other fac­tors that un­der­mine the abil­ity of busi­nesses to sur­vive.

Prop­erty should no longer be the ba­sis upon which lo­cal taxes are levied. The bur­den of pay­ing for ser­vices should be placed on sales. Whether we take Brexit as an op­por­tu­nity to im­pose ad­di­tional VAT or to in­sti­tute a sim­ple ser­vice sales tax, the key fac­tor is to en­sure that the new ar­range­ments are fair to all.

There would be no Busi­ness Rates, but the equiv­a­lent to­tal would be raised on ev­ery­thing you buy, whether by mail-or­der or from the lo­cal su­per­mar­ket. Small busi­nesses and start-ups would be ex­empt in or­der to main­tain ru­ral ser­vices and en­cour­age the en­tre­pre­neur, but, oth­er­wise, there would be a level play­ing field, de­mand­ing no com­plex reval­u­a­tions. This con­cept may be rev­o­lu­tion­ary, but its time has come.

‘The bur­den of pay­ing for ser­vices should be placed on sales

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