Phil Wrigley, chairman of New Look, the fashion chain, said: “When the government behaves in a random and selective fashion there has to be a debate, and we have to make clear the damage it is doing to the economy and to jobs. At best it is opportunistic – at worst it feels like a squeeze that is close to theft.” Wrigley added: “It is very strange that the government is taking money deliberately from some industries and giving it away to others.”
I received my Non Domestic Rates bill this morning – and as promised by the Government it was 5% higher than last year.
For those of you unfamiliar with Rates, it is a charge based on your business premises – like council tax for your shop or factory. Like your council tax, only much more expensive. To give you some idea how much more expensive, there is a flat above my shop, which naturally is exactly the same size as my shop. It is in Council Tax band B I think – so has a bill of £1,108.21 per annum. For that the residents get their bins emptied every week, they get to join the library and have full access to the Council’s services. And, get this, they get a degree of control over how their money is spent because they get a vote.
So, if the council tax for the upper floor of the building is £1,108, how much do you think the rates are for the lower part of the building; my shop?
Before you guess, bear in mind that I don’t get my bins emptied ever. In fact, I don’t even get given a bin. Nor can I join the library, or access the councils other services, and the business permit I have to buy to park at work costs exactly twice as much as the residents pay for the same thing. Also, not only do I not get any say in how the money is spent as I don’t live here and therefore can’t vote, the council can’t even tell me how it is spent, let alone consult me on it. I know because I asked them.
So what are you guessing – remember the flat is the same size, and the residents pay just over £1,000 in return for lots of services. Unless you pay rates I’ be surprised if your guess was anywhere near the £6373.25 I have just received a bill for. That’s 5.75 times more than the residents pay.
Quite why the government has decided to impose this increase in the teeth of the worst recession since the 1930’s is open to debate- the Chancellor seems to have made no attempt to justify it whatsoever. As the man from New Look says, the government seems to have a policy of taking money from some industries and giving it to others, but the rationale behind this is sketchy. For example, Jaguar Land Rover (number of employees in Britain 15,000) has recently received £300 million from the government. Woolworths (number of employees close to 30,000) was allowed to go bust, and take Zavvi with it.
I have written to Kevin Barron to ask for his views or justifications for this increase on the fixed costs of businesses in a recession, and will let you know what he says.