COMMENT: Haringey will suffer from hike in business rates
- Credit: Archant
Warnings that higher business rates will lead to devastating impacts on small businesses are falling on deaf ears.
While huge retailers such as Amazon, Sports Direct and Asos face reductions in their rates, many small, local and cherished businesses will have to find a lot more money just to stay afloat under government plans.
The plans aim to revalue business rates based on the assumed annual rental value on the open market of business properties. The problem is the proposal inequitably hits hardest areas where property values have increased dramatically, and so the capital is the only English region where the total sum collected in business rates will increase following the revaluation.
London as a whole will register an 11 per cent increase in its tax bill. It is not just numbers on a page; the tax bill will be the “biggest blow to independent shops since the financial crisis”, according to Mary Portas, the retail guru.
The government will argue that most businesses up and down the country will see a rate fall. That may be true, but what consolation is it to businesses in London that will be destroyed?
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Elise Café in Hornsey is not sure how it will manage next year, estimating an increase of 17 per cent. “It’s frightening to see more and more small businesses closing their doors. I’m worried that Crouch End and Hornsey will lose its character when the only businesses to be able to afford the rents and rates will be huge corporations,” the owner Claire told me.
Yet the government is ploughing on, despite estimates that one fifth of businesses facing higher rates may have to close their doors, according to the Federation of Small Business.
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And when these businesses disappear, they will simply be kicked out and replaced by huge chains. Is this what prime minister Theresa May meant when she said she wanted a society and economy that “works for everyone”?
Successful businesses in my own constituency of Hornsey & Wood Green will decide enough is enough. Dunn’s Bakery, a family-run business based in the heart of Crouch End serving its artisan craft baking since 1820, says it will be unable to reinvest or grow, having to pass on price increases to customers.
Another, Railway Tavern, a prized pub in Crouch End, is anxious about finding the money to remain open, and if it does, will not be grow thanks to the punitive tax.
More generally, “Haringey is in serious danger of losing its vital support system of micro and small businesses,” Raul Mancera, North East London Chair, Federation of Small Businesses tells us.
Nothing is immune: Retailers, pubs, restaurants, shops, theatres and clubs will all be harmed under the plans. It’s no wonder that one leading business group has called the system “painfully out of date”.
Labour wants to help businesses with a fund worth £150m a year for the next three years, and eventually aims to reform the system.
But if instead the government ploughs ahead, businesses face a cliff edge which they simply cannot afford to back away from. If we want to kill London’s high streets, this will do it.