Redditch property agent John Truslove has slammed the Prime Minister for putting votes before judgement on the vexed issue of business rates.
He hit out following a recent report from MPs claiming the system was no longer fit for purpose and needed a complete overhaul.
The MPs want the current review, set up by Chancellor George Osborne, to look at the merits of giving retail its own business taxation system. They called for the debate about the future of business rates to be extended to consider whether retail taxes should be based on sales rather than the rateable value of a property.
“British retail is a global success story, but its traditional home, the high street, is struggling under a system of business rates that comprises one of the highest forms of local property tax in the European Union,” said Adrian Bailey, the committee chairman and Labour MP for West Bromwich West. “A system of business taxation based on physical property is simply no longer appropriate in an increasingly online retail world. Business rates are not fit for purpose and minor administrative changes will not alter that.”
A discussion paper is promised for later this spring.
“I understand where the MPs are coming from even if I don’t wholly agree with them,” said Mr Truslove.
“I believe the absolute fundamental point is that the Prime Minister has to personally think harder about important issues – with business rates being a good example. What David Cameron seems to do is, taking the analogy of the ship’s captain, immediately there is a storm, he goes below and radios for help rather than trying to safeguard the ship himself as a first priority.
”He always seems more mindful of votes won and lost than reality.”
Mr Truslove went on: “The current business rates system is fundamentally sound and logical.
”The rateable value is the assessment of the annual rent a normal occupier would be able to pay. The rent is a market-driven item and is a function of the level of profit that the average business makes when occupying the property in question. All perfectly logical.
”The fundamental flaw is when the rent alters over a short period, say two years, but the rateable value is only altered every five years.
”There is a clear disconnect, and this, scandalously, has been exacerbated by the Chancellor’s decision to postpone the revaluation of 2015 to 2017. Effectively, rateable values are still based on 2008 figures, before the recession really hit hard.
”So, dead easy Mr Cameron, reinstate the 2015 revaluation. Outside Greater London, rateable values will fall considerably and this is entirely fair.
”But, and a very big but, this would result in a significant reduction in the Government’s financial take, unless they greatly increase the current rates in the pound, and this would be a political hot potato.
”So once again it’s back to votes!
“What a dishonest way to run Britain plc.”
