An industry group has warned Whitehall not to turn business into a ‘cash cow’ as part of the overhaul of business rates.
A Government consultation on its plans to allow local government to retain 100% of the business rates raised locally by 2020 closed yesterday.
The London Chamber of Commerce and Industry (LCCI) welcomed the proposals but warned London-based businesses must not be turned into a ‘cash cow’ by councils.
Noting that 74% of the capital’s businesses were in favour of business rates being retained by London authorities, the LCCI said they are not convinced there should be an additional business rates infrastructure levy on London businesses.
The city’s business sector was already paying a levy to help fund Crossrail, they said.
The industry group also made a number of recommendations which it claimed would help the reforms work.
They argued a proportion of retained business rates should be earmarked for economic growth - in extra support for SMEs, for instance - and they suggested making available enhanced transitional relief to alleviate the expected negative impact of the rates revaluation.
The LCCI also proposed Government should consider 'uncoupling' London from the national valuation system that gives London's businesses what they characterise as ‘an unfair deal’
Chief executive of LCCI, Colin Stanbridge, said the consultation of 100% retention ‘comes at a time of wider uncertainty’ with 44% of the capital’s businesses voicing concerns over the revaluation of business rates next month.
He said this ‘may result in many negative impacts across the capital.’
‘It is important that businesses in London, in particular SMEs, that are being asked to pay higher rates than the rest of the country can see that in doing so they benefit from investment in helping them set on ongoing investment in their surrounding environment,’ Mr Stanbridge said.
He stressed the LCCI was not looking for ‘special treatment for London’ and only wanted to warn against the risk of ‘businesses shutting up shop or moving out of London altogether.’
‘We need to be wary of potential pitfalls including business being viewed as a 'cash cow',’ added Mr Stanbridge.
