Business Rates


Further to my recent letter spelling out how Dorset is likely to fare badly from the government's plans to allow housing associations to sell their housing stock, comes further potential bad news for areas such as ours.

Experts have warned that a radical new plan by the Chancellor of the Exchequer, George Osborne, could result in cash pouring into Britain's richest local government councils, leaving the poorest ones destitute. The Chancellor brought delegates at the recent Tory Conference to their feet recently by revealing he will hand control of all £26bn in business rates, currently being received by the national government, to local councils.

 

His 'devolution revolution' means a grant which previously put the money where it was needed most, will be axed - instead allowing prospering towns to boost their coffers. For example, Westminster City Council in London would rake in £1.6 billion a year while Coventry City Council in the West Midlands would take £118m, despite having more residents. Rural North Dorset District Council, by comparison, would receive less than £13m per year!

 

To make matters worse for poorer areas, richer councils will be also be able to cut business rates, with the Chancellor saying: "It's up to them to decide whether they can afford it."

 

Economists and political experts have all said the plan is liable to wreck Britain's most vulnerable towns without proper safeguards. The Conservatives have said that a system of safeguards will be extended, but have not given any more detail - and there are no guarantees that some councils won't be left worse off.

 

By devolving business rates in this way the Chancellor is starting a race to the bottom, where neighbouring communities will be trying to undermine each other rather than working together for their mutual interest. In my view, without the right safeguards in place, it will be the poorest areas - such as North Dorset - that will be hit the hardest.

 

Hugo Miéville

North Dorset Liberal Democrats 2015 parliamentary candidate

 

Uploaded: 24th October 

 


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