The Chancellor Gordon Brown is being urged by the nation’s retailers to reject a proposal that could harm small businesses.
The British Retail Consortium (BRC) is urging the Treasury to reject calls for control of business rates to local authorities, ahead of the pre-Budget speech.
The group say that such a move would lead to business ‘dead spots’ in deprived and disadvantaged areas.
Business rates represent the third highest operational cost for retailers behind wages and rents.
Currently, businesses contribute £4.5bn to local government finance each year, proportionally three times higher than any other European country, the BRC claim.
BRC policy director Nigel Smith said: “We have seen in the past that when local authorities are given the power to set business rates they invariably give in to the temptation to make unpredictable and unjustified tax increases to cover budget shortfalls in other areas.
“It creates uncertainty in the business community by making it incredibly hard for shopkeepers to budget for future liabilities.
“The only workable system is one that is centrally administered and ensures businesses are protected against unaffordable and unexpected rate increases.
“A return to local taxation will also create retail dead spots, particularly in deprived areas where individual businesses will be forced to carry a proportionally higher tax burden due to the fact that there are fewer businesses in these areas to foot the bill.”
© Crimson Business Ltd. 2006
