In a crucial day for the future of Ed Miliband and the Labour Party, it was a surprise to see his plans to freeze business rates chosen as today’s big speech trailer.
But sure enough, a few hours later, Miliband took to the stage in Brighton and spoke up for hard-pressed businesses, which are facing another hike in tax costs that many already blame for the rash of boarded-up shops haunting the coalition’s efforts to secure economic recovery.
And while it might seem an unlikely rallying call for a Labour leader once famously branded ‘Red Ed’, it shows just how much momentum is building towards a change in the business rates system. The move was broadly welcomed by retail leaders, who would have been none too encouraged by a report also out today from PWC showing the rate of shop closures had showed from 20 a day last year to 18 a day – not much to smile about there.
But there were also questions about how far Labour would go and whether this was a move which would simply set small retailers against the big boys.
The CBI expressed concern that large businesses, on which so much of the recovery depends, would be hit under Labour plans to fund the move with a rise in corporation tax.
Others expressed their hope that Labour’s idea would not only include small one-man-and-his-dog-type operations, but also corner-shop chains and even convenience stores run by the likes of Tesco and Sainsbury’s.
Labour estimates its plans would help up to 1.5 million businesses – but whether the plans for an initial cut in 2015 followed by a freeze are intended to apply to shops run by the big four is an open question. To use the most-overused phrase of recent times, the devil will be in the detail.
Perhaps the real significance lies in the growing consensus that change is needed. Among the groups pressing for radical moves to cut the impact of rates include the BRC – representing more than 90% of food retailers – the ACS, the CBI, high-streets tsar Mary Portas, and now the Labour Party. Former Wickes and Iceland boss Bill Grimsey added his voice to the debate, describing today’s speech as a significant step on the road.
“You would never normally expect a political leader to talk about business rates in their annual conference speech,” he pointed out. “But business rates have become one of the most out of touch, out-dated and unfair taxes and that’s why they’ve been pushed up the agenda. Politicians can no longer ignore the damage that business rates are doing to high streets. They have to act.”
There is a growing confidence among campaigners that the government will soon stop trying got hold back the tide and admit the need for change. The Future High Streets Forum, which includes representatives from Tesco and Boots, is due to meet in the next few weeks to discuss its plans for a widespread reform, although even its own members admit that it is the Treasury – not the DCLG, which hosts the talks – that matters most.
Coming up with a new rates system will take months. But it would be no surprise if within weeks there were indications at least that the idea of rates reform is more than just a Labour Party headline maker.
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