At the CBI’s annual conference, we saw all three political leaders set out their stall to business ahead of the general election, which we later saw formalised in their party manifestos. Business rates formed an integral part of their package to business, with each party acknowledging the system was broken and in need of reform - a result of continued campaigning efforts by the CBI.
These announcements mark a significant step change for the future of the business rates system. It is great news for business to see all three parties focusing on fundamental reform rather than sticking plasters - a message the CBI has been continuing to push.
While there is consensus that something needs to change, the way to fix the broken system is slightly different for each party:
- Conservatives – Launch a fundamental review at their first budget with the aim of cutting the burden of tax on business by reducing business rates. They will also extend the retail discount to music venues, small cinemas and pubs in a bid to support the high street.
- Labour – Review the option of a land value tax on commercial landlords as an alternative to business rates. They will also exempt new capital from business rates in the steel industry to support the green industrial revolution.
- Liberal Democrats – Replace business rates in England with a commercial landowner levy based on the land value of commercial sites rather than their capital value. This would shift the burden from tenants to landlords.
Whether through a review or by replacing the system entirely, these announcements make it increasingly likely that we will see some significant action on business rates in 2020, a move business has been waiting to see for many years.