View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
  2. Economics
2 December 2014

The Autumn Statement is George Osborne’s last chance to help the “go-getters” on the high street

Taking a million small businesses out of paying business rates altogether would send out a powerful message. 

By Bill Grimsey

Over three and a half years ago, with the economy tanking, David Cameron did what all panic-stricken Prime Ministers without a real strategy do. He picked a fight. In this instance, he declared war on the “enemies of enterprise”. Pen pushers, ridiculous rules and regulations, and anything else that stood between the “go-getters” and genuine economic recovery would be ruthlessly taken down to let a dynamic tide of enterprise burst through the bureaucratic dams.

But for all his fighting talk neither Cameron or George Osborne have laid a glove on the biggest enemy of enterprise on the high street: the Valuation Office Agency (VOA). This little known quango sets business rates, which have become the bane of small high street retailers and are responsible for thousands of closures across the country.

It’s not just the fact that business rates have ballooned by 25 per cent since 2008 that makes the VOA an enemy of enterprise. Or that this tax has no bearing on a business’ ability to make a profit and that we now pay the highest property tax in Europe. It’s the fact that this shadowy quango is completely unaccountable and not fit for purpose. It’s still slowly ploughing through a heavy backlog of thousands of appeals against firms disputing their tax bills and its failure to carry out a much needed revaluation of business rates last year to make sure the tax is in line with current property values has ensured that unfairness is embedded in the system.

In this parliament alone over £5billion has been added to the business rates bill. Traders have had to bear the biggest increase in over 20-years and many know their rates bill is hopelessly out of touch with their property value. Quite often when they appeal against their bill it takes so long for the VOA to process it that they’ve gone bust long before a judgment is reached. And, because of the postponed revaluation, businesses all over the country are sometimes paying as much as three times their rent in business rates.

Businesses readily accept that they’ve got to pay tax. But all they ask is for it to be fair – and when a Rochdale fish and chip shop pays £6,000 in rent and has a business rates bill of £19,000 then this tax has lost touch with economic reality.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

And that’s why nothing less than an urgent commitment to a revaluation and a total overhaul of this archaic tax is needed when George Osborne delivers his Autumn Statement this week.

We know that the economic recovery that’s slowly taking root is far from even. Hundreds of town centres blighted by empty shops, pay day lenders and charity shops all over the country is testament to this. Oxford Street and Westfield can’t be the sole yardstick of economic recovery. We need to give every high street a fair chance of finding its feet and allowing prosperity and enterprise to take root. Only by making sure bricks and mortar business entry costs are realistic enough to attract investment and encourage entrepreneurs to take a chance will this happen.

Last week research from the RSA showed a large downward trend in UK small business survival rates. Over half of small businesses don’t make it beyond their first five years. These are the ‘go-getters’ that Cameron rhetorically championed back in 2011. Is the government really doing enough to support these people? With a recent survey showing that over half of UK small businesses are disillusioned with government then it’s hard not to conclude that Cameron’s rhetoric means very little when it comes to real policy support.

This week, though, there’s a chance that the government could finally shake off criticism from Tory MPs like David Davis that the likes of Cameron and Osborne are too close to big business and only care about crony capitalism. But to do that Osborne will have to do something bold. Reforming business rates is just the start. Taking a million small businesses out of paying business rates altogether would send out a powerful message. It would make Cameron’s words about being on the side of ‘go getters’ actually mean something.

This can be done without a huge cost to the Treasury by streamlining the VOA, getting rid of the monster of administration that’s been created and introducing fairer, annual revaluations like they have in Holland.

If action like this were taken then Cameron could rightly claim to have taken the fight to the enemies of enterprise and given small businesses in every town across the country a better chance of succeeding. There is no point in flexing your muscles if all you’re going to do is put your hands back in your pockets and turn your back on the problem. We’ve heard a lot of talk from this government about being on the side of go-getting entrepreneurs. Now it’s time they walked the walk.

Bill Grimsey is Labour’s high streets adviser

Content from our partners
Inside the UK's enduring love for chocolate
Unlocking the potential of a national asset, St Pancras International
Time for Labour to turn the tide on children’s health

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU