Freeze business rates for two years, firms urge Chancellor

Dec 04, 2013

Every year thousands of companies across Milton Keynes are affected by spiralling business rate bills which they say prevents growth and slows down the recovery of the local economy.

Milton Keynes Chamber is joining the British Chambers of Commerce campaign in urging the Chancellor to carry out an extensive review of the current business rates system and to reform the framework by 2015.
 
Chief executive Paul Griffiths (pictured) said: “Business rates hits companies of all sizes long before they make a profit and acts as a drag on business growth and investment.
 
“They are fixed no matter the stage of the economic cycle, company performance or ability to pay. Companies have had no choice but to absorb these annual increases.”
 
Occupiers and owners of commercial and industrial property pay business rates to the local authority at a rate set by the government.
 
Companies have already had to absorb the 2.6% rise in April 2013, which followed a 5.6% rise in 2012 and a 4.6% rise in 2011.
 
Mr Griffiths said: “It is clearly an issue which has been raised repeatedly by companies in our Quarterly Economic Survey where it has been cited as one of the most common factors affecting trade.
 
“We need a new framework that is fair, more flexible, transparent and responsive to changes in the economic environment.
 
“Milton Keynes Chamber knows this costs money but there is scope to do it within the government’s fiscal plan. That way, businesses can put more money into driving economic growth, which benefits companies far more than the cost to the Treasury.”
 
  • Analysts expect the government to revise its estimate of undelying public borrowing downwards from £120 billion to as low as £105-110 billion. "More importantly, we expect this £5-10 billion undershoot to persist in future years as the recovery continues to outpace previous expectations," said Michael McLaughlin, tax partner at business advisers PwC in Milton Keynes.
"Banking this borrowing undershoot and delivering a broadly fiscally neutral Autumn Statement package would be the prudent thing to do. The UK economic recovery is still at a relatively early stage and the situation in the Eurozone remains fragile."
 
The Chancellor faces the task of balancing prudence against concern at the rising cost of living – heightened by the increase in energy prices – and the relative fall in real wages.
 
Mr McLaughlin said: "For businesses, our hope – and what we hear consistently from companies large and small – is for as much stability as possible. A clear path for the future, rather than piecemeal changes, has the best chance of improving confidence and in turn business investment – the one missing piece of the growth story so far.
 
"This will be the most optimistic Autumn Statement the Chancellor has delivered. Economic recovery is gathering pace, boosting tax revenue, while government spending appears to be growing more or less in line with plan so far this financial year."
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