Restore tax-vote right- BRC tells Lords

8 June 2009

Re-writing a bill so it removes retailers' right to vote on new business taxes is unacceptable.

The British Retail Consortium (BRC) says an amendment exempting Crossrail funding from a requirement to ballot businesses before introducing Business Rate Supplements (BRS) must be changed.

The BRS Bill reaches its Report Stage in the House of Lords today (Monday). In its briefing paper for peers, the BRC is urging them to strengthen the requirement for ballots so that there is always a business vote on any BRS proposal rather than allowing this Bill to introduce an exemption for Crossrail.

Stephen Robertson, British Retail Consortium Director General, said: "Crossrail is much needed and long overdue but proportionally retailers will end up contributing far more than they can ever hope to get back. It's outrageous that the law is being written specifically to deny them their say. What are politicians afraid of?

"Business Rate Supplements are open to abuse and this will be the worst example.

"Safeguards for businesses should be increased not removed. The Bill should make ballots compulsory in all circumstances."

The power to set Business Rates was taken away from local authorities almost twenty years ago to prevent excessive rises. The BRS Bill will leave central Government controlling the established Business Rates system but will give local authorities the power to charge a supplement on top. So, for the first time since 1991, local authorities will be able to raise taxes directly from businesses in their areas.

Retailers already pay over £5 billion a year in business rates. The BRC has long warned that giving local authorities the power to charge extra on top will lead to unfairness and uncertainty for the business community.

Retailers already pay more than any other sector in Business Rates. Across the UK the supplements would add an extra £160 million a year to their tax bills. They pay 25 per cent of business rates despite representing only 8 per cent of Gross Domestic Product.

Independent research by Oxford Economics shows the Crossrail BRS will add £34 million a year to London retailers' tax bills from April 2010. When the project is finally operating (2017 at the earliest) their gain will be worth only £15 million a year. Some of that will merely be business diverted from outside central London. And any retailer no longer trading when Crossrail is finally finished will never receive the benefit they have paid for.

BRS is earmarked to raise £3.5 billion towards the £16 billion estimated cost of Crossrail.

The BRC has called for sufficient safeguards to ensure local authorities only use a BRS to pay for genuinely business-boosting infrastructure projects, not simply to fund general expenditure. In particular, there should be a business vote on any BRS proposal (not only where the supplement funds more than one third of the project) and a clear framework for holding local authorities to account over what they deliver in return for the money.

Those safeguards would be seriously undermined by removing the right to a vote from London businesses forced to fund the Crossrail project.

---

Press releases, papers and documents published on this page are the intellectual property of an organisation unrelated to ePolitix.com. We promote their parliamentary and political campaigning activities as they are subscribers to the ePolitix.com service.

As such, ePolitix.com does not edit, endorse, or attempt to balance the opinions expressed on this page. The content of press releases and other such types of content are the responsibility of the originating organisation.