The business rates debacle reveals a Government reluctant to act on a crisis facing firms, says NEIL CRAVEN: And that doesn’t bode well for Brexit

The business rates debacle reveals a Government reluctant to act on a crisis facing firms, says NEIL CRAVEN: And that doesn’t bode well for Brexit

Neil Craven is a senior business reporter and retail correspondent at the Mail on Sunday.

The business rates farce has now descended into outright chaos. I’m here to say we were all warned.

Since 2012, I and other business journalists have been scripting the iniquities of this crumbling system which has caused so many firms to stumble and fall.

Five years of warning that this has been coming. That the delay in the revaluation would hurt. That the phased transition over the next two or three years would hurt those already overpaying.

Business rates: Most likely those who will bear that pain of any PR-spun fiddles will be those whose voices are the quietest – small firms, probably not based in London

My concern now is not over what effect this atrocious system will have on the country in the short or medium term – there is, I’m afraid, only pain to be borne by someone, whatever the Government does in the coming weeks.

Fiddling with this system – which the Government will undoubtedly have to do to make it look like it is taking action – can only serve, once again, to kick the can down the road.

Most likely those who will bear that pain of any PR-spun fiddles will be those whose voices are the quietest. Small firms. Probably not based in London.

Most likely based in the North or on the fringes economically, furthest from the seats of power and well beyond the cares of the most powerful lobby groups.

No, my concern – my hope – is whether, finally, this will serve as a long-overdue wake-up call. Whether the Government will make any meaningful changes in the long-term.

I would hope that at least the Government admits it has got things wrong. And it can do that by ordering a long-term review.

Because the only way to salvage anything from this crisis is to tear up the current system and start again.

To start afresh with a blank piece of paper and draw up a tax system for commerce and local government funding requirements which fits the modern era.

Having a tax based on property values in today’s business world is like having a personal tax based on your shoe size.

I have already seen comments in some quarters about other forms of tax, possibly based on a sales tax (consumers and retailers won’t like it – so the Government will never do it) which sounds workable. Or perhaps a simple extension of corporation tax.

Extending VAT also sounds like an equitable solution – but again would not be popular and easy for big lobby groups (who, again, wouldn’t like it) to undermine.

Options: Instead of business rates, retailers could be charged a tax based on sales

But a serious overhaul could also include a seriously extended transition time – so that those who were to bear more of the burden in the future would have time to stomach the new reality, perhaps even over a decade or more.

Whatever the solution, change is necessary. Necessary because this Government needs now more than ever to show us all that, when it can see when things are going wrong, it should pause for breath.

The Government needs to show that it can listen; it should be preparing business for Brexit, not hamstringing it.

It needs to acknowledge it can see a mess when it falls headlong into it – and that it is willing to admit that it’s covered from head to foot.

If it can’t do that now, at this moment, then please god help us in two year’s time. Because Brexit has all the potential to be business rates multiplied by ten.

And if it Brexit does not go to plan, we need leaders who are prepared to take swift action – use levers and controls to which only they have access.

Because the next debacle of this nature could be far more disastrous for the business and economic interests of the nation.

Comments are closed.