The burden on business
Business leaders and MPS from all parties have condemned a planned hike in business rates, warning that it would devastate the high street and force thousands of small businesses to close. Critics claim some firms could face rises of up to 400% over the next five years. It will be the first revaluation of business rates in seven years: the increases are scheduled to take effect in April. More than 500,000 enterprises will be affected, including shops, pubs, restaurants, nurseries and GP surgeries.
Attempting to head off a backbench revolt, Communities Secretary Sajid Javid told Tory MPS that the Government’s critics were peddling “distortions and half-truths”. Average bills, he said, would actually fall by up to 11% everywhere outside London. But his own figures came under fierce attack, with allegations that he had overstated the number of council districts where rates would drop.
What the editorials said
The business rate is an indefensible tax system, said the Daily Mail. Based solely on the value of a company’s floor space, it’s an archaic levy that takes no account of income flow. The revaluation will be a huge blow to high-street businesses, while favouring out-oftown hypermarkets and giant online retailers who don’t need expensive town-centre sites – they are in line for a £200m tax cut. It’s “madness”. The hikes make a nonsense of the government policy of fostering our struggling villages and urban communities, said The Daily Telegraph. They may bring in an extra £1bn for the Treasury, but they will hurt the very people – the “just about managing” – whom the Prime Minister claims to champion.
The Government has only itself to blame for this upheaval, said the Daily Mirror. The revaluation should have occurred two years ago – there’s meant to be one every five years. But in 2015, the Tories cynically postponed it to avoid angering voters before the election. So the hike is far steeper than it need have been, and our leaders must face the consequences.