Retailers face a “midsummer murder” if the Government presses ahead with a postponement to business rates revaluation by two years.
In a debate in the House of Lords last night, Lord Smith of Leigh argued that the postponement, which is part of the Growth and Infrastructure Bill and will see the next rate revaulation move from 2015 to 2017, would not benefit retailers.
He explained that figures from a Colliers International mid-summer review last year showed retailers could experience a 19% drop in business rates if the revaluation was to go ahead as planned in 2015. Meanwhile, business rates in the West End are estimated to surge 26%, therefore fairly distributing the rates across the UK.
He said: “If the Government go ahead with this delay, the retail sector might well refer to this as a midsummer murder.”
But the debate concluded by the Lords agreeing to the postponement and it will now go through to the committee stage before heading for a third reading.
In the debate, Lord McKenzie of Luton said he was “suspicious” the move was a “political decision” given that the 2015 revaluation would take place immediately before the next election.
The Government’s decision to postpone the revaluation has been condemned by many retailers who believe the 2015 review is necessary to enable business rates to be readjusted fairly, as they believe many businesses will benefit from a fall in rates in line with today’s economic conditions.
But the Government believes that data based on Valuation Office Agency figures shows that 800,000 businesses would benefit from the rates delay.
The Earl of Lytton attacked the Government’s claim of those who would benefit. “This simply was not correct,” he said. “Even on a reworking of the Valuation Office Agency’s figures, one could not arrive at that figure; it just does not make sense.”
But Baroness Hanham reiterated the Government’s position. She said the postponement would create certaintly for businesses so that they could concentrate on growth.
But business rates expert Jerry Schurder, Gerald Eve’s head of rating, said he was “surprised” the Baroness mentioned the 800,000 businesses that would benefit “because it doesn’t stand up to scrutiny”.