Daily Mail

Axe business rates system to help shops urges Cable

- 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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