I campaigned hard for a business rates review, and even tried to claim credit for it — or at least for its pro-northern bias — when details emerged last September. The smallest enterprises are exempt and the provinces will gain some benefit; but it’s clear that new rateable values from 1 April will impose undeservedly harsh rises on mid-sized businesses in London and the south-east. I’m even feeling a twinge of sympathy for Victoria Beckham, whose Dover Street boutique reportedly faces a 415 per cent hike. Philip Hammond, meanwhile, is in ‘listening mode’ — not least, we might imagine, when accosted by furious shopkeepers in his Runnymede and Weybridge constituency — and is expected to introduce extra reliefs in his Budget next week.
But he won’t back down from his defence that the review is ‘revenue neutral’, redistributive in a good way, and adverse only for businesses in prosperous areas. Well maybe, but I suggest he considers two points. First, business rates are a charge for local services, not a tax, and no business person will ever be content to pay more for deteriorating infrastructure and policing. Secondly, a smarter calculation of ‘revenue neutrality’ would take account of profits generated, jobs created and benefits unclaimed in thriving towns and high streets. On that basis, the Treasury would be better off if there were no rises in business rates anywhere.
This is an extract from Martin Vander Weyer’s ‘Any Other Business’, which appears in this week’s Spectator