Business West, the organisation behind the Swindon Initiative, is urging Chancellor George Osborne to reform business rates in his Autumn Statement today. Business rates have emerged as the key issue identified by business groups for reform, which they argue would deliver a much-needed boost to firms as the economy starts to recover.
The CBI also wants the Government to commit to full reform, and in the short term to cap the annual business rates increase at 2% while also introducing an incentive for businesses to move into vacant property to boost local high streets.
The plea for business rates reform tops a wish list focusing on seven key areas that affect business in the region. 
Business West managing director Phil Smith said: “There is no question that the business rates system is broken. This is a tax that hits companies of all sizes long before they a make profit, and acts as a drag on business growth and investment.
"Firms in our region and beyond have been crying out for relief from these burdensome taxes for years, but so far their pleas have been ignored.
“The Chancellor should use the Autumn Statement to announce a two-year freeze on business rates. We need a new framework that is more flexible, transparent and responsive to changes in the economic environment. We know this costs money, but there is scope to do it within the Government’s fiscal plan. That way, businesses can put more money into driving economic growth, which benefits UK plc far more than the cost to the Treasury.”
Business West’s Autumn Statement Wish list contains:
- Clarity over Energy Bills
Lack of domestic energy production is both a threat to UK energy security and the key factor in recent cost increases. Business West encourages the Government to re-think its energy strategy. More specifically, the Energy Companies Obligation (ECO) will now be spread over four years rather than two, which will cut annual spending on energy efficiency in half, thus reducing the cost to the supplier leading to a reduction in energy bills. However, further clarity is needed; businesses need clarity over pricing and therefore consistent energy prices are of high importance.
- Provisions to increase apprenticeships
The Autumn Statement needs to announce measures to facilitate increases in the number of apprenticeship programmes. Youth unemployment is a key barrier to economic growth. Labour market estimates from the Office for National Statistics (ONS) for July to September 2013 show that total UK unemployment stood at 7.6%, with a youth unemployment rate of 22.2%. This imbalance is also evident in the South West with total unemployment at 6.4% and youth unemployment at 20.5%. Apprenticeships are the way forward, acting as a bridge in the skills gap and providing individuals with the skills necessary to grow within an organisation or to make them more attractive to future employees. There is a need for measures to be in place to make these schemes readily available on a wider platform, such as tax breaks for employers taking on young people or removing National Insurance contributions for under-25s.
- Increased Housing Supply
There is a shortage of supply in the UK's housing market, therefore the Autumn Statement must include provisions to enable housing development. For example in the South West there is a need to enable the provision of 26,400 new homes in Bristol, 9,900 in South Wiltshire and 11,000 in Bath and North East Somerset during the years 2006-2026, which have been targeted by the respective Core Strategies of these areas. In light of the recently perceived housing bubble, an increase in housing supply is also needed to improve the affordability of housing to the working population of the UK. To address this, the Chancellor should include tax breaks and incentives for construction of new homes, such as a cut VAT on all domestic building work to 5%. The Autumn Statement should also provide clarity over the extent and timeframe of the Help-to-Buy scheme to avoid a possible distortion in the housing market.
- Freeze on Fuel Duty
Transport is crucial to facilitate business, with fuel prices adding uncertainty to costs. The Chancellor stated at the Conservative Party Conference in Manchester last month that there would be a freeze on fuel duty for the rest of this Parliament ‘if there is a way to pay for it’. There is a need for the Chancellor to officially confirm this promise in the Autumn Statement. If this freeze is confirmed it will provide clarity over costs, giving businesses confidence to invest in the future and therefore stimulating economic growth.
- Better Access to SME Finance
There has been a good focus on supporting measures for SMEs to access finance by this Government and we welcome the recent £250m of additional funding to the British Business Bank and the re-focus of the Bank of England's Funding for Lending Scheme on business credit. However, there are reports that borrowing costs are rising for many firms and that the benefits of credit accessibility are still mostly being felt by the mortgage market and among large firms. Therefore further measures must be implemented to ensure SMEs get the funding necessary to enable growth. SMEs account for the vast majority of the private sector in the UK so the availability of finance to these businesses is critical to stimulate further economic growth.
- Investment in Infrastructure and Services
Investment in transport has been proven crucial in sparking economic growth and is a vital element in attracting and maintaining investment in specific areas. Therefore, the Autumn Statement should allocate further funding for transport schemes to attract investment and regenerate areas in need. Examples of this can be seen in Business West’s latest Quarterly Economic Survey which found that:
- 48% of businesses surveyed in Gloucestershire stated that improvements need to be made to the A417.
- 29% of businesses surveyed in Swindon and Wiltshire stated that improvements need to be made to the A303.
- 32% of businesses surveyed in Bath, Bristol and North East Somerset stated that improvements need to be made to the A4 between Bath and Bristol.
Investment in such local transport improvements is the key to unlocking the growth potential of these areas. The function of local government is essential in providing key services and infrastructure developments. These are a key enabler of economic growth, facilitating the working population and business needs. Local governments are already stretched due to cuts in previous budgets, with local government networks and organisations stressing that further cuts this year could force local services beyond breaking point.
