A leading property adviser has accused Labour leader Ed Miliband of “tokenism” over his proposal to reduce business rates for small firms, and equated it to rearranging the deckchairs on the Titanic.
Gerald Eve’s head of rating Jerry Schurder said the proposal “misses the point” and the entire business rates process needs a fundamental review.
At Labour’s conference today, Miliband is due to announce that if elected, the party would freeze the uniform business rate increase for 2015/16 and 2016/17 for all rateable values below £50,000. This would be paid for by reversing the Government’s planned 1% corporation tax reduction for that year.
Schurder said: “I welcome Ed Miliband’s contribution to the debate. But it would have been preferable for the Labour party to give careful consideration to the whole fairness of the rating system rather than make promises that presuppose little further change to a tax that is widely felt to need more substantial reform. This is re-arranging the deckchairs while our high street steams towards an iceberg.”
He said the proposal is “quite clever politically” as it “offers something which applies to most properties but for which the costs are relatively modest”. But he added that “tinkering” will add unnecessary complexity and additional costs for both businesses and local authorities.
He pointed out the rates bills for 2015/16 will already have been issued in March 2015. For bills to be cut only after the General Election would require a statutory instrument followed by the reissue of 1.6m bills and a recalculation of liabilities and monthly payments.
“Will this be worth the effort and aggravation to save an average business only £15 per month?” Schurder asked.
“There is no indication that Labour will commit to continue the enhanced small business rates relief which has existed since October 2010 but is due to expire next April although many people believe the Coalition will extend it. In terms of certainty SMEs would have preferred to have heard that this much more beneficial scheme would be continued by a Labour administration.”
Meanwhile, British Retail Consortium director general Helen Dickinson said: “The UK business rates are the highest property taxes of any EU country and lead directly to vacant shops. A consensus is emerging that the system is no longer fit for purpose and requires total reform.
“We therefore welcome this focus on supporting small businesses and high streets and the recognition that the cost of business rates has become unsustainable for retailers. With more than one in ten shops currently empty across the country, a complete reform of the system is required. We are keen to discuss these proposals in detail with Labour to understand how they might form part of this more fundamental root and branch review.”
