Government Must Rethink Business Rates

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Business Rates are responsible for many businesses struggling to trade across the city, and the MP for York Central, Rachael Maskell, is calling on the Government to overhaul the proposed changes which the Government are planning to bring in with effect from 1 April.

In the last year the MP has been working with groups of traders across the city and many of these have expressed concern that the high cost of business rates is damaging their businesses in the current economic climate. Many of these companies also face competition from internet based companies which trade on line and it is felt there is not a level playing field. 

Traders in Acomb have explained to the MP that Acomb, a once thriving shopping centre, is on the decline with independent businesses closing and shops being replaced by a mix of charity shops, bookmakers and takeaways. In Acomb and other parts of the city the situation is made worse because business rates are based on over inflated property rental costs and do not represent the amount of footfall on the high street. Often the landlords do not even live in York and operate through agencies.  Business owners have explained that the cumulative cost of running a business is prohibitive for many and too many outlets are let to a narrow group of traders and charities, rather than a wide range of independent businesses which local communities need if they are to thrive and prosper. 

Ms Maskell has written to Ministers and also met with them to raise her concerns about the changes to the business rate system and to say the Government’s plans could see problems escalating rather than getting any better.  Ms Maskell has held public meetings in Acomb, met with representatives from the Valuations Office and the Federation of Small Businesses and she has asked questions in Parliament to try to help. Recently, she learned of a York pub which is facing a 600% increase. Other business owners have contacted her to say a sharp rise in business rates could force them out of business altogether and bring about boarded up shops and empty high streets.

Rachael Maskell MP says:
“It is completely wrong to see businesses which have traded in York for many years forced to close or relocate due to rising business rates. If more shops have to move out of town, this impacts in all sorts of ways. Our high streets contain more empty shops and boarded up buildings and no one wants to see this.  High streets are more than just a place to shop, but a central part of any community, where groups of shops are struggling this has a negative impact on the whole community. There will be an increase in congestion across the city as people seek out greater choice if local high streets can no longer provide this.

“From questions I have put direct to Local Government Ministers, and the Chancellor of the Exchequer, it seems that my work behind the scenes is paying off and the Government may make some movement at nextweek’s Budget.

“We know that our businesses play a vital role in our dynamic, historic and vibrant city-centre – not least in providing employment but in keeping York distinct with independent shopping and unique character; unlike other cities. At the moment, many are under threat from increased rates.

“Labour have a five point plan on business rates and this would help many businesses in our city. This includes including setting up an emergency transitional relief fund for businesses facing “cliff edge” increases in their rates; revising the appeals process  to ensure businesses get a fair hearing; bringing forward CPI indexation so that businesses aren’t paying more because of inflation; excluding new investment in plant and machinery from future business rates valuation; introducing more regular valuations to stop businesses facing periodic, unmanageable hikes; and implementing a fundamental reform of the business rates system to better reflect the structure of the retail sector in the age of online shopping.

“York businesses are fed up of the business rates rollercoaster - we need stability and fairness to be at the heart of the Government's business rates agenda. This is why I am calling for the Government to completely overhaul their proposals before the Budget next week."

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