In an open letter to The Rt. Hon. John Denham MP, Secretary of State for Communities and Local Government, Joanne Cash speaks out against the proposed business rate increase for London between 2010-2014.
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Rt. Hon. John Denham MP
Secretary of State
Communities and Local Government
Eland House
Bressenden Place
London SW1E 5DU
22nd September 2009
Dear Secretary of State
Response to consultation paper on transitional arrangements for the non-domestic rating revaluation 2010 in England
I am writing regarding the proposed business rate increase for London between 2010-2014.
The proposal to increase London business rates by such a disproportionately large amount appears unfair in light of the recent experiences and current situation of many small businesses on Westminster North. The burden could be spread more fairly around the country. Such a large rise (more than double the next region and several times more than most) is bound to be construed as punitive to London’s businesses and their contribution to this country’s economy. I also believe the rates proposal will hit London’s small businesses hard and those in Westminster North especially hard.
The transitional arrangements proposed for 2010 ‘to offer greater protection to small properties’ would set the rateable values thresholds for 2010 at £25,500 in Greater London. However, this threshold for relief will exclude large numbers of small shops in the Westminster North area where rateable values are higher than average. Ironically these values are often higher because of the hard work the proprietors of these businesses have put in, alongside Westminster Council, to improve their area. Even allowing for the fact that the valuation takes April 2008 as its base the thrust of this proposal is effectively penalising those local business people who have helped to enhance their location.
There is a second problem that disproportionately affects businesses in this area. This April saw the end of the transitional relief from the 2005 revaluation and this had disastrous consequences for many small businesses in this area. Even with the staged increases from 2005-2009, many businesses in this constituency were nowhere near the new rate and faced bills that in some cases doubled overnight. Most had rateable values well over the threshold for Greater London and as a consequence many business people here faced great distress. Combined with the recession it was a ‘double whammy’ many could not cope with, as many empty shop fronts and ‘to let’ notices show. The Government responded eventually with the deferral scheme but it was too little too late for many. The cash flow of a small business is not structured to deal with large rate increases followed some months later by complex and bureaucratic relief that has to be applied for, too often the damage is already done.
I have talked these Government plans through with a number of local business representatives and, on their behalf, ask you to review, as part of this consultation, what happened this spring and ensure lessons have been learnt. I believe the current proposal would simply see the whole disaster unfold again in a few years' time, with terrible economic consequences.
To summarise; I oppose the increases proposed in the consultation paper as unfair to London businesses. The proposals do not make sufficient allowance for the special circumstances facing many small London businesses in areas like Westminster North.
Yours sincerely
Joanne Cash
Conservative Parliamentary Spokesman for Westminster North
