Bath Voice News: Bath’s MP signs letter to the Chancellor of the Exchequer Rachel Reeves from opposition MPs calling for help for small businesses and retailers ahead of Thursday’s budget over the ‘broken business rates system’

Below is the letter sent by a number of MPs to the Chancellor including the Bath MP Wera Hobhouse.

Rt Hon Rachel Reeves MP, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ

Rt Hon Jonathan Reynolds MP, Department for Business and Trade, Old Admiralty Building, Admiralty Place, London SW1A 2DY

21 October 2024

Dear Chancellor and Secretary of State,

Ahead of the Autumn Budget, we are writing to urge you to take urgent action in support of high streets, town centres and British businesses, by kick-starting a process to replace the broken business rates system and to continue business rates relief in the interim. 

The business rates system is unfair on companies, bad for our local communities and damaging for our national economy. It penalises manufacturers when they invest to become more productive and energy efficient. It leaves pubs and restaurants with disproportionately high tax bills. And it puts brick and mortar shops at an unfair disadvantage compared to online retail giants.

In too many places, pubs, restaurants and shops are being forced to close, taking with them jobs, opportunities and treasured community spaces. And consumers are seeing the cost of this unfair tax passed on to them.

More broadly, this outdated system inhibits business investment, job creation and economic growth, holding back our national economy – yet for too long it has been allowed to continue.

The previous Conservative Government promised a fundamental review of business rates to ease the tax burden in its 2019 manifesto. Yet by 2022, former Chancellor Jeremy Hunt was describing this commitment as “another of the promises I now vainly wish I had not made”. Businesses are tired of being treated with such cynicism and relying on a patchwork of last minute, temporary reliefs. 

While we welcome your Government’s stated willingness to replace business rates with a new system, we worry that unless action is taken urgently, it will be too late for many firms.

We therefore strongly urge you to use the Autumn Budget to launch a process to replace business rates with a fair new system by the end of the next financial year – i.e. April 2026.

As part of this initiative, we also urge you to seriously consider the Liberal Democrats’ longstanding proposal to replace business rates with a Commercial Landowner Levy. The system would be based purely on the value of the land where the business is located. Revaluations should move to an annual basis. And local government must be given a guarantee that their finances will not be adversely affected.

This fair reform would cut tax bills, breathe new life into local economies and spur growth. Equally importantly, it will provide long-term certainty for businesses that currently rely on short-term discounts.

Lastly, as an interim support measure, we ask that you keep in place the existing 75% relief for retail, hospitality and leisure until the new system is in place; and that you freeze at least the small business multiplier for the same period, while fully compensating local government.

High streets and town centres suffered badly under the previous Conservative Government. They finally deserve certainty, stability, support, and a modern tax system that enables them to grow, create jobs, and power economic growth. 

It is imperative that this becomes the last Budget where business rates are a permanent feature of our tax system.

Sincerely,

Daisy Cooper MP

Sarah Gibson MP

Rt Hon Sir Ed Davey MP

Adam Dance MP

Al Pinkerton MP

Alex Brewer MP

Alison Bennett MP

Angus MacDonald MP

Anna Sabine MP

Ben Maguire MP

Bobby Dean MP

Brian Mathew MP

Calum Miller MP

Caroline Voaden MP

Charlie Maynard MP

Charlotte Cane MP

Chris Coghlan MP

Christine Jardine MP

Claire Young MP

Clive Jones MP

Edward Morello MP

Freddie van Mierlo MP

Helen Maguire MP

Helen Morgan MP

Ian Sollom MP

James MacCleary MP

Jess Brown Fuller MP

John Milne MP

Josh Babarinde MP

Joshua Reynolds MP

Lee Dillon MP

Liz Jarvis MP

Luke Taylor MP

Manuela Perteghella MP

Marie Goldman MP

Mike Martin MP

Monica Harding MP

Munira Wilson MP

Olly Glover MP

Paul Kohler MP

Pippa Heylings MP

Rachel Gilmour MP

Richard Foord MP

Roz Savage MP

Sarah Dyke MP

Sarah Olney MP

Steffan Aquarone MP

Steve Darling MP

Susan Murray MP

Tim Farron MP

Tom Morrison MP

Victoria Collins MP

Vikki Slade MP

Wendy Chamberlain MP

Wera Hobhouse MP

Will Forster MP

Zoe Franklin MP

Bath MP Wera Hobhouse