Axe busi­ness rates sys­tem to help shops urges Ca­ble

Daily Mail - - News - By Matt Oliver City Cor­re­spon­dent

THE ‘bro­ken’ busi­ness rates sys­tem should be scrapped to ease the bur­den on strug­gling high street shops, the Lib­eral Democrats have said.

Sir Vince Ca­ble, the party’s leader and for­mer busi­ness sec­re­tary, said the sys­tem was hurt­ing the econ­omy and gave an un­fair ad­van­tage to on­line re­tail­ers.

He called for it to be re­placed by a new tax which would only be levied on land value – and not build­ings and equip­ment.

At the mo­ment rates are cal­cu­lated us­ing ‘ rate­able val­ues’ based on shop rents, mean­ing bills can go up if busi­ness own­ers im­prove their prop­er­ties.

But Sir Vince said: ‘Busi­ness rates were a badly de­signed pol­icy to be­gin with and have be­come an un­ac­cept­able drag on our econ­omy.

‘ They are a tax on pro­duc­tive in­vest­ment at a time of chron­i­cally weak pro­duc­tiv­ity growth, and a bur­den on high streets adapt­ing to the rise of on­line re­tail.

‘By only tax­ing land and not the pro­duc- tive cap­i­tal above it, this re­form would re­move a ma­jor dis­in­cen­tive to in­vest­ment, boost­ing pro­duc­tiv­ity and con­tribut­ing to a nec­es­sary revival in UK in­dus­try.’

His com­ments come as pres­sure is mount­ing on the Govern­ment to re­view the sys­tem, which crit­ics say is help­ing de­stroy tra­di­tional re­tail­ers.

High street shops must pay crippling rates on their bricks-and-mortar premises, while in­ter­net gi­ants such as Ama­zon pay less for out-of-town warehouses.

The Mail has launched a cam­paign call­ing on min­is­ters to save the high street by re­form­ing busi­ness rates.

In a re­port, Lib Dem ad­vis­ers and Adam Cor­lett, an in­de­pen­dent an­a­lyst, de­scribed the cur­rent sys­tem as ‘bro­ken’ and said a land value tax would dra­mat­i­cally re­duce the bur­den on high street shops.

Factories and com­put­ing busi­nesses with large amounts of equip­ment would be among those who ben­e­fit the most.

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