An influential Labour Party advisory group has proposed a radical policy shake up of business rates legislation that would see a percentage of the tax levied on property owners and “not just the occupying business”, BDT understand.
Labour’s High Street Advisory Group, which was set up by Shadow Secretaries of State Chuka Umunna and Hilary Benn to draw up a series of recommendations to boost UK High Streets, has been circulating its The Future of High Streets & Town Centres report to the Party as its annual conference began yesterday in Manchester.
The advisory group is made up of former Wickes and Focus chief Bill Grimsey, retail consultant Jane Bevis, the chief executive of the Camden Town Business Improvement District (BID) Simon Pitkeathley, BID expert Jamie Licko and Jamie Mitchell, former managing director of Innocent Drinks and now chief executive of organic farm Daylesford.
Among the findings are recommendations aimed at producing a “more market responsive business rates system” that would create yearly assessments and would also look at how to better balance taxation burden amongst property and business owners.
Among the recommendations, which have been seen by bdt, is a proposal to “consider levying a percentage of the tax on property owners and not just the occupying business”.
While it is not clear that the recommendation will end up in the Labour Party manifesto it will likely spark concerns among property developers and landlords about the introduction of a fresh tax if a Labour government is successful at next year’s General Election.
It is understood that already at this week’s Labour Party Conference fringe groups have discussed the issue, arguing that it would be more equitable for property owners to pay the tax as ultimately it would be passed on to tenants in a way that landlords felt was acceptable.
Liz Peace, chief executive of the British Property Federation, said: “Whilst we are in agreement that the business rates system needs fixing, and that it is in need of a ‘root and branch reform’, we would question the overall economic benefit of burdening landlords with the tax as well as occupiers. Business rates are currently out of sync with the economy, and it is their value, not who is paying them, that needs fixing. Allowing business rates to rise and fall with the wider economy is the only way to ensure they remain affordable and do not hold back investment in the built environment.”
The other recommendations are:
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22nd September 2014