The government has asked Sir Michael Lyons to review the funding of local government finance. Rumours abound that one recommendation in Sir Michael’s report, due for publication in December, will be that business rates will revert to local authority control.

The Federation of Small Businesses has launched a campaign across England and Wales to demonstrate the strength of feeling among the business community against such a proposal.

It is gathering signatures from the FSB’s 195,000 members and beyond in a bid to ensure that the jobs that depend on small business success are not lost by going back to what it describes as a “discredited” system of local business taxation.

Control of business rates was removed from local councils in 1990. Before then, local government set business rate levels for their own area which led to wide discrepancies between councils.

Allan Banks, policy spokesman for the FSB North Bucks branch, said Sir Michael faced a difficult task in his review but called on him not to propose measures that would hinder small businesses.

“Our members have long memories and they remember the dark days of the 1980s when some local authorities hammered businesses with outrageous rises in their rates,” he added. “Small firms employ over 12 million people and the success of the UK economy is built on their continued growth.

“The business rates system is far from perfect but having it set at national level ensures that it is a national issue. To allow local government to go back to the bad old days will threaten future economic growth and employment levels. That is surely not in anyone’s best interests.”

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