Government U-Turn on Business Rates After Lib Dem Campaign

The Government yesterday announced a complete U-turn on their policy of raising business rates after a campaign led by Winchester MP Mark Oaten and his Liberal Democrat colleagues.

Two weeks ago Mark, and the PPC’s for Winchester and the Meon Valley Martin Tod and Liz Leffman, were contacted by local businesses who had just received notice from the council informing them of steep business rate rises.

The business rate hikes left local enterprises facing steep bill increases that many of them feared they would simply be unable to afford. The move was heavily criticised, especially coming into force during the middle of a recession, and highlighted the difference between Government rhetoric and actual practice.

The rate increases were so steep because transitional relief, a mechanism which acts as a buffer to ensure businesses do not face huge rises from one year to the next, was being phased out for the last year of the current five year rate calculation cycle.

Taking the campaign to parliament Mark wrote to the Secretary of State for Business Lord Mandelson and also tabled Early Day Motion 1164 calling on the Government to extend transitional rate relief and expressing serious concern with the negative affect these rises could have on Winchesters businesses.

Yesterday’s announcement, made by the Chancellor, means the rate rise will be spread over three years and effectively meets the local Lib Dems demand to ease the cash flow to Winchesters businesses.

Speaking on the announcement Mark Oaten said:

“Well I am glad we have got there in the end but I still don’t understand why this was allowed to go on for so long before the Government decided to act. We got as far as businesses getting letters through the door and I don’t know what that says about the Governments ability to keep their eye on the ball.

“As soon as we were contacted by businesses we all knew that this was something we needed to take up immediately and I am very pleased that the Government have seen sense on this finally.

Martin Tod also commented:

“I think local businesses will be breathing a sigh of relief following the Chancellors statement but we have to ask why these huge rate increases were allowed to get so far in the first place.

“Everyone knows that things are very very tough at the moment. Winchester is well placed to weather the financial storm and build for the future but uncertainty over what rates businesses have to pay doesn’t help. I’m happy the Government have seen sense but the fact of the matter is Labour are just not giving businesses the real help they need.

Liz Leffman added:

“It’s no surprise that our local SMEs will be quite unsettled after the events of the last few weeks. Flip flopping on policy and waiting to the last minute is no way to give businesses any kind of confidence in the current economic climate.

“We need to make sure now that businesses know what is going to happen, have some certainty about what their bills will look like, and can be left to get along with running the motor of our local economy.