CBI boss calls for review of “broken” business rates system

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Business rates
// CBI president calls for an independent review of the business rates system
// John Allan will tell a meeting that business rates have been partly to blame for the spate of high street closures

The leader of the Confederation of British Industry (CBI) is calling for a reform of business rates, saying the system is “uneconomical, unsustainable and unintelligible”.

According to The Guardian, John Allan is poised to tell a CBI conference today that the “broken system” is partly to blame for recent spate of retailers collapsing, including Debenhams.

He is also expected to highlight how thousands of retailers and other businesses try to appeal against their rates, which suggests a lack of confidence in the system.

In addition Allan – who is also the chair of Tesco – will tell the conference how part of the problem was uncertainty around when the next business rates revaluations take place.

“The last revaluation period was extended from five years to seven,” he said.

“We can now expect revaluations every three years, but in practice, any longer than one year means business rates lag far behind economic cycles and – over the years – the significant rises in UK property costs.

“The result is a system that rewards those places already on their way up in the short term, but eventually pulls the rug from under them, and one that punishes those areas that are already struggling, with boarded up shops an all too common sight.”

Allan complained that the government had only “tweaked” the system in recent years.

“The more sticking plaster we add, the greater the signal that the system is broken and in need of a fundamental rethink,” he said.

Financial Secretary to the Treasury Mel Stride said: “Business rates help fund our vital public services and the local amenities and services that are so important to all of us.

“Following our review of business rates in 2016, we’re introducing reforms that will make the business rates system fairer and lower business rates bills by £13 billion over the next five years.”

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