Lobby groups put business rates back in front of Osborne

Any hopes George Osborne had that the issue of business rates would be kicked into the long grass seems to be fading as fast as UKIP support this week.

He did deliver a sop to businesses in the December Autumn statement with the promise of a review of business rates but things have gone very quiet since then.

As Ed Miliband fights to win over UK businesses in the run up to the election, Osborne and Cameron can't expect an easy ride either with the news that several influential groups have written to George Osborne expressing their fears that the review is being quietly shelved.

The business groups have warned the Chancellor that there must be a thorough review of business rates to "retain the confidence of business".

According to the Telegraph, business leaders are pushing for the review to be led by a senior independent figure who will recommend changes, rather than run as a consultation where vested interests who shout loudest get the Treasury's ear.

The letter to Mr Osborne was signed by a pretty impressive line-up including the British Chambers of Commerce, the Federation of Small Businesses, the British Retail Consortium, the British Property Federation, and the Association of Convenience Stores. The CBI apparently also supported the letter but contacted the Treasury separately.

As well as warning the Treasury that the review must be thorough, the letter says that there's also a lot of uncertainty over the reference that any concessions would have to be "fiscally neutral" – whether this refers to the annual income generated by the tax, the amount each industry pays, or the amount generated over a far longer period of time is unclear.

Whichever way you look at it, the Treasury pockets around £25bn a year from business rates and, despite the current consultation into business rates avoidance, the Exchequer is going to be very reluctant to relinquish any part of that rather substantial tax take that doesn't alienate key groups of voters and is unlikely to provoke a big swing toward Labour to join their one business supporter – er Bill what's his name?

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