UBR backtrack rejected

The row over government proposals to give councils limited powers to set their own business rates deepened this week after taxpayers roundly rejected the plans.

Business responses to the proposals, which are due in by Monday, are expected to firmly oppose any change to the present system installed by the last government eight years ago.

The Confederation of British Industry, which is expected to oppose local control of business rates, said: ‘We are still not convinced the government’s proposals are the best way forward.’

Richard Baron, deputy head of the Institute of Directors’ policy unit, said a return to the pre-1990 system of local rates would be a step backwards for business. ‘Giving control over rates to local authorities would not contribute to local democracy, it would merely risk burdening businesses, leading to unemployment,’ he said.

‘It would damage the economy without benefiting local government. Businesses pay about #15bn a year to local authorities through the national rate already, plus additional support collected via national taxes.’

Mark Bradshaw, director of operational resources at the British Retail Consortium, agreed. ‘We want to keep the main advantages of the current UBR. In any new system we would need to recognise that any supplementary rates would have to be tightly controlled and the business community would want to be involved in how the increase would be spent,’ said Bradshaw.

Anthony Brittain, director of tax and accounting at the British Property Federation, said: ‘While we understand the proposals are part of a wider review to try to stabilise local democracy, businesses think that is best achieved by retaining the present system.’

The Local Government Association was disappointed with the ‘narrow view’ of the responses. ‘We’ve had discussions with businesses during the consultation. They recognise the proposals are a useful step towards change and help authorities respond to the needs of businesses,’ said John Blundell, the LGA’s chief economist.