Sir Michael Lyons must resist relocalisation of business rates to bail out town halls.

Ahead of next week’s Lyons Review into local government financing the British Chambers of Commerce (BCC) is renewing its call for Sir Michael Lyons not to relocalise business rates back into the hands of local authorities, and also resist the urge to slip in extra charges through the back door.

The BCC has written to Sir Michael Lyons highlighting the local government communities failure to address businesses major concerns about:

-          Accountability

-          Value for money

-          Fairness & certainty

-          A workable system of equalisation given different Local Authorities’ tax bases.

Quite simply, there has been no coherent model or plan made clear by local government in favour of relocalisation.  Instead, when studying their views, it soon becomes clear that rather than resolving issues to do with equalisation, distribution and the devolution of powers from the national to the local level, their plans would mean confusion and yet more town hall bureaucrats – and of course more money from already over burdened businesses.

The BCC is also today calling on Sir Michael Lyons to resist taxing business through the back door.  A number of taxes such as a ‘bed tax’ on hotels and ‘tourist taxes’ have been mooted during the lengthy consultation period, all of which would have a negative impact on the competitiveness of UK businesses.

David Frost, Director General of the British Chambers of Commerce, said:

“What would a business get in return for paying more tax to its local town hall? 

“Businesses simply do not trust local authorities to use business rates as anything other than a cash cow to be milked in order to keep the council tax down.  Rates were taken away from local authorities because they were not delivering anything and their argument to get them back has been far from convincing.

“It is also important that Sir Michael Lyons does not sanction back door raids on businesses through the mooted ‘bed tax’ and other new charges on business or development.  Through high levels of corporation tax and burdensome regulation business is already paying its fair share and should not be penalised further to bail out local councils.”