Long heralded as the party of business this thin veil of misrepresentation for the conservative party is being lifted, they are the party of corporations not businesses in our community. When the business rate review is going to hit our small businesses in town centres the hardest whilst subsidising multi-national out of town developments like Amazon in Rugeley at the expense of the owner, proprietor cafes and shops on Market Street in Hednesford.
Here is some background as to why the Green Party is the only party for SME’s and if you want to support a party which will fight for sustainable, local solutions tackling climate change and social inclusion by promoting policies for a sustainable society. Look no further than the Green Party of England and Wales, working hard for our community in Cannock Chase.
Business rates are a property tax paid by occupants of non-domestic properties, with the amount charged determined by multiplying the ‘rateable value’ of the property – which is set (in England & Wales) by the Valuation Office Agency (an agency of HMRC) – by a ‘multiplier’, expressed in pence per pound of rateable value. Business rates are a fully devolved matter, with the multiplier being set by the UK Government in England, by the Scottish and Welsh governments in Scotland and Wales, and by both the Northern Ireland Executive and district councils in Northern Ireland. (Rates for domestic properties were abolished and replaced by Council Tax in 1991).
In England, rateable values are updated every five years, to reflect the changing property market. By law, this is done in a revenue-neutral way, overall, so there are always winners and losers. However, the Coalition Government controversially delayed the latest revaluation, from 2015 to 2017, with the result that businesses in areas where property prices have risen sharply since the financial and economic crash of 2008, such as London, now face steep increases from 1 April, while those in areas where property prices have fallen, such as the north of England, have in effect been paying too much for the past two years. And, while the revaluation will be phased in, the maximum rise from 1 April has been set as high as 42%, for business occupying high-value property.
Furthermore, many online retailers, such as Amazon, will benefit from the revaluation, because their out-of-town warehouses have either fallen in value, or have increased in value by much less than the properties of businesses in town centres. This has fuelled suggestions that the business rates system is fundamentally unfair and need of serious reform.
On 22 February, during Prime Minister’s Questions, Green Party MP and co-leader Caroline Lucas urged Theresa May to help small businesses facing steep increases in their rates from 1 April. In response, May appeared to hint at a change of policy, and extra money, to provide “relief” to those businesses hit hardest by the changes. However, the Prime Minister’s official spokesperson quickly clarified that no extra money would be forthcoming, prompting Caroline to say:
“Proposed business rate hikes are set to devastate small businesses across the UK, yet the Prime Minister couldn’t confirm today that she’ll offer them a helping hand. The Government’s policy on this issue is in utter chaos – with hints from Theresa May that she’d consider taking action only to be shut down moments later by her own spokesperson.”
Later the same day, communities secretary, Sajid Javid, indicated that the chancellor, Philip Hammond, will announce extra help for small businesses adversely affected by the revaluation in the Budget on 8 March, as part of a “longer-term re-examination of the business rates system”. However, the Government has already conducted two major reviews of the system, leading to a number of reforms, including a controversial new appeals system, from 1 April. In a letter to the chancellor, Caroline Lucas has called for an extension of the current Small Business Rate Relief, including increasing the threshold for 100% relief to £15,000, tapering to at least £18,000.
The Green Party has long advocated (including in its 2015 general election manifesto) replacing both business rates and Council Tax with a Land Value Tax – a system of local taxation in which the landowner pays a proportion of the rental value of the land itself, but not of buildings or improvements upon it, in each tax year. Similarly, the RSA think tank has recently called for the Government to consider whether business rates could be replaced with “a levy based on company turnover, or looking to the future, a levy based on the value of land (a Land Value Tax)”.