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More broadly, this outdated system inhibits business investment, job creation and economic growth, holding back our national economy – yet for too long it has been allowed to continue.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