Chancellor George Osborne faces pressure to tackle business rates in his Autumn Statement next month, as Labour plans to freeze business rates for small retailers if it comes into power.
At the Association of Convenience Stores conference Labour shadow business secretary Chuka Umunna is today set to say there is nothing to stop the Chancellor matching the offer.
“Business rates have risen by an average of £1,500 since David Cameron became Prime Minister, with another increase of £430 coming next April,” he will say. “This is squeezing businesses on our high streets who are already struggling. So, instead of yet another corporation tax cut for large businesses, we will help you by cutting business rates in 2015 and freezing them in 2016, benefiting 1.5 million business properties.
“In fact, there is nothing to stop George Osborne matching our commitment to cut then freeze business rates in 2015 and 2016 when he delivers his Autumn Statement in two weeks – he should do so and, if he does, we will support him.”
Osborne is set to reveal the Autumn Statement on December 5.
It comes after the British Chamber of Commerce (BCC) has called for Osborne to freeze business rates for the next two years. The BCC also wants the Government to review and reform the business rates system by 2015 to ensure a more “responsive and transparent” system in the next parliament.
BCC director general John Longworth said: “There is no question that the business rates system is broken. This is a tax that hits companies of all sizes long before they a make profit, and acts as a drag on business growth and investment.”
High business rates bills are retailers’ biggest gripe as they believe it stunts growth and creation of new jobs.
Business rates are calculated on September’s retail prices index, which means firms are set to face a 3.2% increase next spring, costing retailers an extra £242m in business rates.
April’s 2.6% rise followed a 5.6% increase in 2012 and 4.6% in 2011.