Business secretary Vince Cable has backed calls for the Government to review its decision to delay the rates revaluation for two years.
The Government plans to postpone the rates revaluation due in 2015 to 2017. The planned 2015 revaluation would have meant business rates being calculated at 2013 rateable values. Under the Government’s plans, the 2017 change will be calculated at 2015 rateable values, which are likely to be higher than those in 2013, therefore costing retailers more.
The move has been condemned by many retailers who believe the 2015 revaluation is necessary to enable business rates to be readjusted downwards in line with today’s economic conditions.
In leaked private emails between Cable and a resident of Twickenham, Cable’s constituency, the business secretary said in a letter dated January 14 that he hoped the pre-legislative process would “hopefully prompt fresh thinking among my colleagues”.
In an earlier letter, dated December 3, Cable said: “I am suggesting in Government that we revisit the issue.”
Cable’s office has since confirmed he asked officials to look into the issue.
Labour MP for Rochdale Simon Danczuk today said: “For once Vince Cable is speaking up for business across the country instead of playing Tory politics.
“The decision to postpone this year’s revaluation was made purely as a sop to the City and it will mean that places like Rochdale end up subsidising Bond Street.
“Businesses in Rochdale are paying rates based on a 2008 evaluation that was close to the peak of the property boom. Property values here have fallen by up to 40% since then.
“The Business Secretary recognises this and says we need a revaluation to make sure we don’t tax people out of business. But, incredibly, he’s being blocked by Eric Pickles’ department, which hasn’t got a clue about achieving growth and is more concerned with maximising tax revenues and shoring up Tory heartlands.”
The decision to delay the revaluation of business rates has been condemned as a “tragedy for the high street” by Mary Portas and a policy that “embeds injustices in the current system” by the British Property Federation.
Retail Week and the British Retail Consortium (BRC) are lobbying the Government to freeze business rates this year in the Fair Rates for Retail campaign. Retailers face a £175m business rates bill in April, which follows two consecutive years of big business rates increases, totalling an additional £500m in rates on their bills.