The Association of Convenience Stores (ACS) has welcomed the announcement of a Communities and Local Government Select Committee inquiry into the Government’s proposals to devolve rate setting powers to local authorities.
The inquiry will examine the Government’s proposals to allow local authorities to retain 100% of the full stock of business rates by 2020, to cut business rates, and for directly elected mayors to add a premium to business rates to pay for new infrastructure projects.
ACS chief executive James Lowman said: “We welcome this inquiry, and hope that it will ensure that proper scrutiny is given to the Chancellor’s proposals on business rates devolution. We have significant concerns about plans to allow mayors to raise business rates to fund infrastructure projects.
“Businesses are already being hit with the removal of the £1,500 retail rate relief, and these proposals only serve to bring further uncertainly to the future of business rates while opening up the possibility that struggling businesses could have to pay higher rates bills.
“The existing discretionary rate relief powers are not being used by local authorities and we are as yet unconvinced that further devolution would have a positive impact. The wider business rates system is in need of reform which cannot be achieved solely through devolution of powers.”
Since the election earlier this year, ACS has repeatedly called on the Government to introduce meaningful reform of the business rates system which includes the following measures:
• changing the business rates system to incentivise investment so entrepreneurs aren’t penalised for making improvements to their business;
• removing more of the smallest businesses out of the rating system altogether to give start-ups, family businesses and entrepreneurs a chance to invest and reduce the administrative burden on the Valuation Office Agency; and
• reviewing individual rating schemes that are not based on property values to ensure that all business types pay their fair share.