London Mayor Sadiq Khan has joined forces with some of the city‘s leading business and retail lobby groups to criticise the looming business rates revaluation and urge the Chancellor to reconsider the reforms.
Khan has said he was “shocked” by the business rate rises, which he said will see London handed a £900 million business rate hike – which could rise to £1.1 billion – when the revaluation comes into effect on April 1.
He warned Chancellor Philip Hammond the tax changes could force the closure of thousands of London’s small businesses and retailers.
“I was elected on a mandate of being London‘s most pro-business Mayor ever and I am genuinely shocked that the government‘s actions will damage the prospects of so many businesses in the capital, putting many at risk of closure,” Khan said in a statement.
“The very character of our local high streets is under threat – London‘s businesses have been warning about the damaging effect of this skewed and unfair revaluation for months and yet the government blunders on.”
A letter sent to Hammond argues that the scale and suddenness of the business rates hikes will have a negative impact not just on London‘s retail sector, but also its hospitality, leisure and office sectors.
The letter was signed by the Mayor, the London Chamber of Commerce, the Federation of Small Businesses, the Heart of London Business Alliance, and the New West End Company.
They also urged the Chancellor to consider transitional measures to mitigate the impact of business rate rises; look favourably at policies and schemes that will enable businesses to create more income, such as local investment through TIF schemes; and commit to a review of business taxes, including business rates, to ensure that retailers have a system that supports economic growth and produces a high tax take in a post-Brexit economic climate.
Business rates haven’t changed for seven years – they should be reviewed every five – and because rates are tied to rental values, and London rent has surged since the last revaluation, it‘s feared the city will suffer from the reforms.
Heart of London Business Alliance chief executive Ros Morgan said the impending rate changes “threatens London‘s world-class destination status” for tourist shoppers and international investment.
“Following a 47 per cent increase in international tax-free spend across the city in January, London is undoubtedly a driving force behind the UK‘s tourist economy – which is why it is critical government takes the right action in the short and long term to support these businesses in light of the challenges ahead,” Morgan said.
Khan‘s comments, as well as the joint letter sent to Hammond, is the latest chapter in the increasing backlash on the business rates reforms as its starting date looms.
Earlier today, it was revealed that Hammond was reportedly in “listening mode” in response to the controversy, after Conservative MPs in the influential 1922 committee called a meeting with him to prevent a rebellion over the business revaluation.
Yesterday, Sainsbury‘s chief exec