Business Rates: an election issue (not)


This blog has covered the issue of rates on a number of occasions (e.g. rates relief, a levy, some rates and the Grimsey report, the poll tax and business rates) never fully satisfactory, and indeed, re-reading the pieces, with a mounting sense of frustration at the situation.  The last time was in April 2014, and it is clear that nothing has changed since.  The situation has indeed been made worse by the revaluation – though it may not be as bad in many places as it is often portrayed as losers get noisy and winners grow quiet.  Successive governments have proved incapable of weaning themselves off the predictable and expanding money supply from rates, and retailers have borne the brunt of this.

Everyone knows it is a rotten, broken system, but there seems to be little will in politics to give a damn about it. Both the Conservative and Labour manifestos have a paragraph on the rates system, both promising a review in due course. This is simply not good enough, especially in the former case where the Conservatives have been in power for 7 years and have presided over the continuation of an unholy mess.

It is of course perhaps not overstating it to note that politicians at this time of the cycle (i.e. they need your vote, now) are wedded to places.  Towns and high streets are magnets for the kissing babies politician and their absurd placard waving cling-ons; real people are far too dangerous.

But it is in these very towns and high streets that the rates damage is being done.  Why can’t politicians look around and see the devastation their policies and inaction are wreaking?  No, they’d rather just continue protecting  internet businesses and out-of-town, but milking the high street and the social hearts of our communities.

Rates are centuries old in conception.  They are analogues in a digital world.  As someone on the radio said the other day in a different context, the model of taxation based on fixed place and people working 40 hours a week for 40 years of their life in one place is long dead, so why are business and personal taxes still stuck in the past?

And so it is for rates.  Sticking plasters and outmoded approaches should have gone a while ago.  When you next see a politician in a high street wanting your vote, nobble them and ask them about their views on, and solutions for, rates and business and personal taxation.  Do they get why this is a real issue? Don’t get fobbed off with ‘it’s a local government issue’.  If they know what rates are and why this is important, and can be half coherent on what could be done, think about voting for them, for most of them don’t have a clue and are quite content to keep taking the money and push the problem into the long grass.

A longer, but equally irritated piece on the rates mess (‘Houston, we have a problem’) has just been published in our column in Town and Country Planning.  You can download it here, but you should also take a look at T&CP and the other great stuff they produce in there every issue.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Education and Students and a Fellow of the Royal Society of Edinburgh
This entry was posted in Closure, Governance, Government, High Streets, Internet, Internet shopping, Large Store Levy, Mary Portas, Online Retailing, Places, Politicians, Public Health lev, Rates, Regulation, Retail Policy, Retailers, Store Closures, Tax, Town & Country PLanning, Town Centres and tagged , , , , , , , , , , , . Bookmark the permalink.

5 Responses to Business Rates: an election issue (not)

  1. Gordon Bell says:

    I sat next to a gentleman at a lunch one day and asked what he did for a living. He was a Strategic Financial Analyst for the government. Trying to keep the conversation in an area that I might comprehend I questioned him on when we might see some move on the outmoded business rate and in particular retail. As I am not naming him I think I can print his reply. “Don’t quote me on this. Never. Business rates and in particular retail is the most consistent and reliable income government has. Other tax income varies more. They (the government) will circle and consider the issue, however, deem to risky rock the boat, also it’s not a vote winner of looser. So far he has been proved right.

  2. Leigh Sparks says:

    Gordon – this has been the response from the UK government to date, but even they have to realise that in the end this is simply not sustainable and they will kill off the source. That point is accelerating.

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