CBI's John Allan Argues For Immediate Business Rates Reform

The CBI President used a speech in London to call for an immediate review of the business rates system.

In a speech at a CBI conference dedicated to addressing the challenge of business rates, CBI President John Allan could not have been clearer about member experiences of the current system. 

“The business rates system has – over time – become uneconomical, unsustainable, and frankly, unintelligible," he said. "In short, it’s a system in need of reform.”

He argued the case for serious reform on two fronts. Firstly, the long gaps between revaluations means rates don’t reflect property values – punishing areas of the country that are already struggling, but also eventually undermining those that are on the way up.

“It’s the way that business rates currently work against the economic cycle that makes the tax uniquely damaging,” he explained. “Just compare this approach with other types of tax. Fuel duty, or corporation tax, for example. They increase when business is booming in proportion to the amount of fuel you buy, or profit you make. It’s a much fairer system. One that doesn’t reinforce economic disparities – like the current business rates system does.”

Secondly, he argued the system makes businesses less likely to invest in growth:

“If you’re a climate-conscious business owner and you want to improve your office, or your energy supply with solar panels – or new energy-efficient lightbulbs. Whether it’s a large capital investment, or several smaller upgrades to existing property, any real efforts to invest will see your business rates rise.”

With business rates playing a role in Debenhams collapse – and the high number of firms that try to appeal their business rates each year – Allan highlighted just how little confidence there is in the system.

And referring to government’s “warm words and small solutions”, he said tweaks over the years have only served to reinforce the idea that business rates are a high street issue rather than a problem for our whole economy.

Instead he urged both the Conservatives and Labour party to make good on their manifesto promises to undertake a comprehensive and independent review.

Read the full transcript of John's speech here 

Source : Insight DIY Team and CBI

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