The word is that the Conservatives are now contemplating backsliding on their Business Rates review in the face of a growing backlash.
Sign of things to come if the Conservatives don’t get a grip of business rates? Cross Street empty shops – more about high rents and rates than whether the road is open to cars or not.
Conservatives introduced the changes to help rebalance the economy and have been assuring everybody for months that 75% of business wouldn’t be affected or would see their rates drop. In January, Andy Boddington, Lib Dem County Councillor for Ludlow, exposed the massive detrimental impact the changes were going to have on the retail economy of Ludlow. You can read his blog posts on the subject here: April business rate hike could permanently damage the retail economy of towns like Ludlow, and here: Mixed fortunes and trouble ahead after changes to Ludlow’s business rates. His research was picked up by the local press and radio, and then the national media picked up the issue facing Ludlow.
This has developed into a national problem reported widely by the national media. Reports are that the Chancellor is now facing a backlash from Conservative MPs who have been feeling the heat from Business facing extortionate rises.
Andy’s figures make grim reading for Ludlow and the other Market Towns of Shropshire. Massive, punitive business rate rises are not just a story for urban areas in Shropshire. The pain is also being felt in rural areas too. If the Conservatives continue to get this wrong then more shops and business will close and cease trading. Cross Street’s empty shops are that way because of high rents and rates. Spending £50k on bollards or removing the bollards won’t help get those premises filled. Street Scene enhancement and realistic rents and rates would make a bigger difference. Let’s hope Cross Street isn’t the tip of an iceberg.
Whittington and West Felton businesses are also feeling the pinch as they face their new rates in April. In the SY11 4 postcode district, which is almost exactly the same as the County Division boundary for Whittington Division, the average business rate change for 195 businesses is a 38% rise. Some businesses can have a compound effect where they have a cash machine on the premises. Such businesses can get charged business rates for the main business plus a separate bill for the cash machine itself.
A few lowlights:
- average business rate change for 195 businesses is a 38% rise
- The biggest % rise is seen by Rednal Karting with a whopping 223% rise
- Mile End filling station is going up by 71%
- The Ironworks is going up by 58%
- Holiday cottage businesses are going up by 113%
- Brynallt Kennels facing a rise by 98%
- Workshops are facing a rather modest rise of 33%
- Shops face a rise of 209%
- Hairdressing & Salons face a rise of 210%
Shops face a rise of over 200% in business rates
Over the last few days, there have been reports about how the Government is going to make appealing harder. However, businesses have been telling me that they have huge issues with appealing already and that Shropshire Council isn’t very helpful and somewhat obstructive in the process. Shropshire Council is only the collection authority but surely they can be more sensitive and direct businesses to where and how they can appeal.
There was already huge disquiet with Business rates and the inherent fairness of the valuations. At Rednal Karting they would like a fairer assessment. When they compare themselves to other similar Karting venues they are severely penalised and have been frustrated in getting the valuation appealed.
If the Government does back down it would be welcome but if it is simply a tweak of the transitional arrangements that wouldn’t be a satisfactory outcome. The current suggested transitional arrangements are geared towards larger businesses. Business Rates need a comprehensive root and branch review to make sure that the system is fair to everybody, not just those at the top and the bottom.
In the post-Brexit world, we need to be doing more than ever to support the economy and help businesses make the transition thrive, not penalising businesses.