Suffolk: MP backs call for fairer business rates system

Tim Yeo

Tim Yeo - Credit: PA

A major overhaul of business rates is needed to help get Suffolk’s small high street retailers a fairer deal, a senior MP will tell his government colleagues.

Tim Yeo, South Suffolk MP, is set to use examples of independent shops in the likes of Sudbury and Hadleigh paying huge five-figure annual rate bills – which are higher per square metre than those paid by out-of-town retail giants making bigger profits.

Mr Yeo told business-owners attending a networking lunch in Sudbury he will urge Secretary of State for Communities and Local Government, Eric Pickles, to review the system, arguing the change could play a key role in helping struggling high streets traders to survive.

Critics of the existing system say it bears no relation to a firm’s ability to pay, and while rents have fallen by up to 40% in the past two years, business rates have continued to rise.

The county’s small business owners argue that having two different rating systems, which leave some town centre shopkeepers paying up to 10 times per square metre more than retail park supermarkets often selling the same products, is “inequitable”.

In a further blow, landlords left with empty shops after tenants can no longer afford to keep trading have to pay full rates on vacant premises with a rateable value of more than £6,000, if they have been empty for more than three months.

One shop on Sudbury’s Market Hill previously occupied by health food chain Julian Graves has a rateable value of £20,750, which equates to a £9,337 annual rates bill. The shop has been empty for more than six months.

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Another Hadleigh landlord who slashed rents to try to attract new tenants was faced with a £25,875 annual bill on the vacant shop. He says the rates have deterred new businesses from taking it on.

During a meeting in Sudbury in May, Mr Yeo told traders business rates were not solely responsible for the demise of high street trade and he urged them to “embrace and adapt to changes”.

But at the lunch on Friday, he said upon examination of data provided by local business owners at his request, he now realised that rates were “one of the key considerations” for small businesses.

He said: “There is no magic wand here but I do understand the argument about equity, and it does appear that a big retailer operating on an out of town site gets a better deal than a small retailer operating in a town.

“We (the Government) need to look at the way that the (business rates) burden is shared. I will be going back to Eric Pickles about this exact issue and I will be telling him there needs to be some redistribution of the burden that could provide some relief for people like you.”

Chris Soule, chairman of Suffolk’s Federation of Small Businesses said rates and rents were top of the list of concerns in the county’s small business community.

He added: “The rates are calculated on the rentable value, and rents are going down each year as they should be because properties are not worth as much as town centre trade is diminishing. But rates are not going down with them. So I agree that central Government needs to re-examine how rates are calculated.

David Holland, who owns Curtain Craft in Sudbury’s King Street and has campaigned for a more equitable rates system, said he was “heartened” by Mr Yeo’s comments. He currently pays £8,000 per year in rates and says he can only continue trading because he owns the shop.

He told the EADT: “Some politicians have called for a freeze on business rates, but clearly it’s the actual mechanism by which they are worked out that is flawed.”