Local business rates a 'harmful gimmick', say critics

By agency reporter
October 26, 2011

The Coalition government's plan to "localise business rates" will have potentially damaging effects for local government, small businesses and the environment, says the Green Party of England and Wales.

Critics accuse the Coalition's scheme of being "a superficial gimmick".

The new plans are an example of false localisation, designed instead as a mechanism to further squeeze council budgets and services, say Greens and others.

While the proposals are portrayed as localism, both business rates and the valuations on which rates are based, will be set by central government.

The proposals go further to state that any business rate growth achieved by local authorities below a centrally set growth target - adjusting for inflation - will be kept centrally. Local authorities are actually set to lose out to the treasury - if the treasury's own targets are not met - placing further strain on the provision of already slashed services.

Jason Kitcat, a Green Party Councillor and cabinet member on Brighton and Hove City Council, said: "It's absurd to even call the proposals ‘localisation' when the key variable - the level of tax - will remain out of council control and the growth target will be set nationally for all of England."

"Small innovative businesses, such as new media and sustainability, attract little or no business rates because they are run from home or modest offices. To benefit most under the new scheme, local authorities need to favour large projects like new airports or large shopping centres. This makes a mockery of the Coalition's pledge to support small business and will further choke an already stalling recovery," said Kitcat.

"Business rates need to be set locally so regional authorities can adjust strategies to optimise local talent. Without this, both the local economy and the environment will suffer from corporate cherry picking. These proposals show the superficiality of Cameron's rhetoric, both in his claims to being the UK's greenest government and his support for localism," he added.


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