Tory Party Conference – Chancellor taking us back to the good old or bad old days?
The Chancellor has come out fighting at this week’s Conservative Party Conference in Manchester by announcing that powers to set business rates will be devolved to the regions.
I’m not sure if that is taking us back to the good or bad old days but it will certainly keep business rates high in the headlines for some months and even years to come as Local Authorities work out how this translates at grass roots level.
His proposals have been cautiously welcomed by the IOD. Simon Walker, Director General of the Institute of Directors, said: “Businesses are excited about the prospects for devolution, and the promise to devolve business rates will give local authorities a greater stake in the success of their local economy. Businesses have been clear that they want enterprise to be put at the heart of the devolution agenda, and the Chancellor appears to be doing just that.
“We hope this new deal will pave the way for councils to use these new powers to attract businesses and regenerate high streets.”
So, business generally seems to be supporting the idea but there are already rumblings that cash-strapped local authorities could look at this new power as an excuse to hike local taxes. Maybe – but here in the in the North we could see the opposite.
Rochdale has already taken the bull by the horns with a scheme to tempt business back into its town centre. As part of a package of benefits, Rochdale Borough Council (RBC) is offering retailers and businesses a huge 80% off their business rates for 12 months, starting from 1 April 2015, for moving into selected empty units.
If that wasn’t enough to get retailers hammering at the door then the Council is taking matters a step further and offering a 50% business rates discount for 2016 as well. The Council is hoping to appeal to Start Ups, those currently trading outside the town centre but looking for a high street base, or those thinking of expansion but who have been put off by high business rates in the past.
There are currently 23 units that qualify for the special rates discounts and many are close to high street stalwarts such as M&S and JD Sports.
The RBC website proclaims: “The ambitious plan is designed to give businesses huge financial support during their first 2 years of trading, which are often make or break times for entrepreneurs. The scheme will give businesses the chance to share the high street with retail giants JD Sports and M&S for a fraction of the normal cost and be in a town which is benefitting from an ongoing £250M investment programme.”
The Council obviously feels that taking a hit on the business rates now is a worthy loss leader as part of their town centre facelift, but it will be interesting to see if a) it works and b) other hard pressed neighbouring authorities follow suit. We could have a business rates price war on our hands over the coming months and the devolved powers over setting of the business rates will only make it even more interesting.
One word of caution. This is not new it takes us back to the pre 1st April 1990 position when I remember the rate in the pound was £3.76 in Manchester and £3.56 in Liverpool albeit that the valuation date was 1st April 1973. Am I really that old…?
The September Consumer Price Index has been announced at 2.4%.
With Brexit only a few short months away, it seems that most aspects of doing business in the UK will be affected whether significantly or marginally.
Struggling high street retailers may be cheered a little by comments given by business secretary Greg Clark.