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Business leaders pile on pressure for radical reform of 'unintelligible' rates system

PUBLISHED: 00:10 08 May 2019 | UPDATED: 07:52 08 May 2019

A 'broken' business rates system is partly to blame for shop closures, say business leaders   Picture: DAVE VINCENT

A 'broken' business rates system is partly to blame for shop closures, say business leaders Picture: DAVE VINCENT

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Suffolk and Essex leaders are calling for radical reform of the UK's 'broken' business rates system as business lobby group the CBI slams the current system as "uneconomical, unsustainable, and unintelligible".

In a speech to business leaders in central London, CBI president John Allan is set to argue that the current property tax system causes uncertainty, entrenches regional inequalities and deters investment.

John Dugmore, chief executive of Suffolk Chamber of Commerce, agreed that the rates regime was "no longer fit for purpose" and was causing "perverse and negative outcomes" especially for high street businesses already struggling with the impact of new technologies and changing consumer habits.

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"Business rates are one of a number of input taxes which weigh down companies' longer-term growth and employment generating potential," he said. "Thanks to pressure from our national body, the British Chamber of Commerce, and others, the chancellor heeded calls for help by cutting bills for the vast majority of high street firms during last year's autumn budget.

"However, Suffolk Chamber will continue to call for fundamental reform of the broken business rates system to alleviate the pressure on all businesses."

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David Burch, director of policy at Essex Chambers, said it was an issue which his members raised "more of less every week", whether they were large or small.

"It seems to be something that's definitely having an adverse effect on them," he said. "It's true to say it's partly the reason for the closure of retail outlets of all types which we have seen up and down the country."

He echoed calls for a review of the system "preferably sooner rather than later", but acknowledged that government was currently bogged down in its Brexit woes.

"The political system is so bound up with Brexit now what we are not seeing is any creative thought about what the UK economy should look like post-Brexit," he said.

"It (rates) is something that's holding back business development and business growth and leading to the closure of businesses."

Mr Allan is set to argue in a speech on May 8 that long gaps between revaluations means punishing areas of the country that are already struggling, as well as undermining those on the way up.

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