BUSINESS RATES RISE

Hornchurch and Rainham MP James Brokenshire has highlighted the pressures on local firms from increasing business rates.  In April business rates are set to jump by 5% despite falling inflation and the downturn in the economy.  The British Retail Consortium has warned that the increase will be “disastrous for the retail sector” adding that it risks leading to further insolvencies and job losses, particularly among smaller businesses.

Raising the issue at Treasury Questions in the House of Commons last Thursday, James Brokenshire asked the Chancellor of the Exchequer how many businesses he expected to cease trading or go out of business as a result of the forthcoming rise in business rates.  The Chancellor Alistair Darling refused to give a number but said that he would be keeping help for small businesses under review.

Commenting James Brokenshire said:

“Many businesses are struggling to keep their heads above water and it is easy to imagine what the impact of this sort of increase in rates will have.  Annual business rate increases are set on the basis of inflation in the previous September.  By a quirk of fate this was 5% in September 2008 - a seventeen year peak.  Since then inflation has fallen rapidly with some experts predicting it may be zero later this year. 

“The Government needs to review this situation urgently and consider what support might be made available for small businesses already facing an extremely challenging 2009.  We need to look at reliefs for empty commercial property as well as ensuring that small businesses are aware of the rebates that may be available to them.  Increasing business rates won’t raise additional revenues for the Treasury if the firms aren’t there to pay them.”

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