Dozens of trade unions have called on Chancellor Rishi Sunak to urgently reform the country’s “unfair” and “unproductive” trade rate system.
In a statement, the Confederation of British Industry (CBI) and 41 business groups, representing a total of 9 million employees, urged the Treasury to tackle the issue in this month’s budget.
The signatories warned that the government would fail in its campaign to level the country and achieve net zero if it did not significantly change business rates, levies on non-domestic properties such as shops and warehouses.
He said the “outdated” tax contributed to the demise of high-street stores across the country and discouraged green investments.
“If a business invests in solar panels, or other plant and machinery to improve its assets, this increases their bill of rates,” the statement said.
Industry groups said the system in its current form is “uncompetitive, unproductive and unfair” and does not compare favorably to property taxes in other countries such as Germany.
As a means of aiding the UK’s economic recovery, trade unions called for a “modern system that rewards investment, zero turbo charges and kickstarts growth for the next decade”.
To this end, he called for increasing the frequency of reappraisals and reducing business rates to build a “green” model.
CBI Chief Economist Rain Newton-Smith said action on the issue was “very necessary” to revive the economy.
He argued that improving fundamental trade rates would help the country achieve higher wages, productivity and skills in the future.
Michael Howes of the Society of Motor Manufacturers and Traders agreed that the system is “an overhaul”.
“The current system, whereby anyone looking to invest in new equipment – particularly green technologies – sees their business rates rise, there is a perverse disincentive to invest and improve productivity,” he said.
Meanwhile, British Property Federation head Melanie Leach said the current approach poses “a significant risk” to high street businesses and is hindering the ability to modernize city centres.
Speaking at the Labor conference last month, Shadow Chancellor Rachel Reeves said her party would slash trade rates.
“We will do the biggest overhaul of business taxation in a generation so that our businesses can lead the pack, not look for opportunities elsewhere,” she said.
Credit: www.independent.co.uk /