A Senior Conservative MP is calling for radical changes to business rates in a bid to help support struggling small and medium-sized enterprises (SMEs).
Sir Geoffrey Clifton-Brown has spoken up about the issue of expensive business rates at a time when shops of all shapes and sizes on Britain’s high streets are facing increasing financial strain.
In the last 18 months, more than 8,000 shops across England and Wales have been forced to close their doors, while one in eight shop units are now empty.
Sir Clifton-Brown said that the existing business rates system had a major role to play in this issue, particularly when it comes to putting financial pressure on smaller businesses.
He said that the current system favoured larger firms with “significantly higher” turnovers, but was punitive for small businesses and that this practice was unjust.
In a recent debate at the House of Commons, the Senior Conservative MP used the example of multinational banking giant HSBC, which is eligible for substantial relief on six of its key London properties, to illustrate his point.
He said that in order to make the system fairer, the Government ought to consider introducing a business rates “personal allowance” for SMEs, which would work similarly to the income tax personal allowance.
“To reverse the decline of our high streets we must ensure that competition is fair in every respect, and if the rates system is making it unfair, we should look at reforming it,” he told the Commons on Monday night.
In response to the concerns raised, Treasury Minister Mel Stride acknowledged that Britain’s high streets were facing “one of the greatest challenges of our times,” and pointed out that the Government had previously attempted to explore alternatives to business rates on many occasions, to no avail.
“High streets face a variety of challenges, of which business rates is but one,” he said.
“One of the greatest challenges they face is the change in how we are now shopping, with just over 18 per cent of all retail now going online.
“That tells us that high streets will need to transition, reinvent themselves, change and come up with new ways to serve their local communities and drive traffic into our high streets.”