The CBI has urged the Chancellor, George Osborne to reform business rates to help small businesses and boost the high street.
The CBI director general, John Cridland argues that business rates are continuing to go up and use an outdates system that needs redefining to “ensure windows are opened up, not boarded up”.
Mr Cridland says the current system blocks much-needed investment and he has called on Mr Osborne to limit the rise in business rates to 2.0 per cent next year.
Normally business rates go up by the level of the Retail Prices Index (RPI) measure of inflation from the previous September. This year it was 3.2 per cent but the CBI wants the increase to be less this year and for there to be a full inquiry into reforming the tax.
The CBI has sent through a “wish list” to the Chancellor ahead of his Autumn Statement on Wednesday December 4th.
Mr Cridland has also called for a 12-month holiday on business rates for firms moving into empty premises. He says this will speed up the economic recovery and reignite confidence in the high street.
The UK economy is growing this year but mainly due to the growth in the housing market and consumer spending.
The government wants a more balanced type of growth with contributions from trade through higher exports and businesses to invest more.
Mr Cridland said business investment is required to help create jobs, improve living standards and drive the economic recovery.
The CBI also called for the government to continue its deficit reduction policy, saying the job is only half complete.
Mr Cridland said: “At the heart of our realistic package of measures for the Chancellor is an overhaul of the business rates system, which will boost the high street, manufacturers and factories. We want to ensure windows are opened up, not boarded up.”
The CBI said the current business rates system is “uncompetitive, distortive and too complex.”
The organisation says that a short-term cap would help firms struggling to keep trading and signal that the government is serious about tackling the problems of the high street and providing practical help.
The CBI estimates a reduction to 2.0 per cent in business rates next year would cost the Treasury just £327 million.
In its submission to the Chancellor, the CBI said: “Government should also consider introducing an incentive to move into vacant property, such as a one-year rates holiday, until full reform of the system is possible.
“This would help to break the cycle of decline that empty shops can create,” it added.
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