Derek presses home need for reform of business rates system

Twice in a matter of days in Parliamentary debates, West Cornwall MP Derek Thomas has pressed home the need for a reform of business rates.

Speaking first in a debate on the Retail Sector, which has seen the loss of 21,000 jobs across the UK in the first three months of the year, Mr Thomas called the current system of business rates “indefensible” and “outdated”, adding that the system reflected a business building rather than the business itself, causing significant harm to the high street.

Noting that some businesses in his constituency had seen “extraordinary increases”, Mr Thomas said: “In St Ives, we have seen the rate re-evaluation, high rents often charged by absent landlords, and a quick rotation of businesses that come into town thinking that St Ives is the place to be in business and will pay whatever rent is asked for.

“For several stores, that has led to year-on-year increases since 2016. Despite the voluntary support available from the local authority – they have not benefited.”

Mr Thomas made three “urgent requests” of the Government: to halt the increases above the consumer prices index that businesses are facing; for measures to allow town councils to retain 1% or 2% of the business rates collected in their area to support the high streets  and a commitment to scrap business rates altogether – perhaps with a transaction tax replacing it.

Just a few days later, at a debate on business rates led by York Central MP Rachael Maskell, Mr Thomas repeated his demand for a percentage of business rates to be used to support high streets and also highlighted the issue of holiday let ownership.

“If someone has a property that they own and which they choose to use as a holiday let, it can be registered as a business and they can avoid paying council tax altogether and then claim small business rate relief,” he argued.

“We have a cross-party campaign in Cornwall on this issue. The real tragedy is that it is possible for a second-home owner to advertise his property as available for rent and also claim small business rate relief.

“There is an opportunity for the Government to close the loophole and collect more tax, completely fairly.”

Treasury Minster Mel Stride responded to Mr Thomas’s speech by saying he would meet him to discuss issues about holiday lets and also listen to individual cases of businesses paying differing amounts of business rates.

Mr Thomas said he would continue to press the Government to change the current system of business rates.

“I was very glad to have the opportunity to make the case for reform of the business rate system twice in a week and I will continue to press for change whenever there is an opportunity.”