“Any local area will be able to cut business rates as much as they like…”
Councils now keep half of the £26bn raised by business rates, with the rest sent to Westminster.
“Scottish councils already retain all of the business rates they collect and the power to reduce business rates bills is being devolved this month”.
Speaking at the Conservative Party’s annual conference in Manchester on 5 October 2015, George Osborne has set out a four-point plan to “get Britain building” using funds raised from the sale of Government land assets and investment of local authority pension funds.
“Our recent survey found that 92 per cent of council leaders and chief executives thought they should have control over setting business rates, so they will welcome this news”, House added.
But business rates expert, Paul Turner-Mitchell, warned it could be a “disaster” for companies in the North if it meant cash-strapped councils were tempted to raise rates to pay for services.
Cities with mayors, however, such as as London, Manchester and soon Sheffield will have the power to apply an additional premium for infra-structure programmes on businesses. “More than 60% of IoD members back local politicians being given the power to set business rates”.
Meanwhile, John Cridland, director-general, of the Confederation of British Industry (CBI), the UK’s biggest business lobby group, said the “devil would be in the detail”. Rates are charged regardless of whether a business is profitable or not, unlike corporation tax.
The Chancellor added: “This is what our plan means”. The structure of the tax is unpopular with many high-street retailers as it falls most heavily on firms that occupy more expensive town centre property and takes little or no account of their profits or turnover.
Lee Perkins, managing director of Sage United Kingdom and Ireland, has long called for a review into this “outdated” tax on business, which he says is “riddled with disparities dependant on where you are based”.
“Not only will it create better incentives for councils to encourage local economic growth, it will also instill discipline as their decisions will affect where businesses locate and the wider prosperity of the area”.
Infrastructure projects across the United Kingdom, including high and low carbon developments, could soon be fast-tracked following the announcement the government is to launch a new National Infrastructure Commission (NIC) to help minister’s prioritise which projects should proceed.