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LGA responds to Chancellor's business rates announcement

One year ago, we campaigned for councils to be able to retain 100% of business rates growth. On Monday, the Chancellor's announcement to action this dominates news headlines.

Responding to the Chancellor's announcement that councils will be able to retain all of their business rates income, Cllr Gary Porter, Chairman of the Local Government Association, said:

"The announcement by the Chancellor is great news for councils and shows that the Government has listened to the arguments set out by local government. The LGA has long-argued that the current system of business rates needed reform so councils could effectively support small businesses and boost high streets.

"Councils have been hugely restricted in their ability to introduce local discounts with government setting the charge and keeping half of business rates income. With greater local control, councils will have flexibility to reduce business rates for the types of shops and businesses that residents want in their high streets and neighbourhoods.

"Councils and businesses both agree that business rates should be a local tax set by local areas. It is right that all of the money which a business pays is retained by local government and this will be a vital boost to investment in infrastructure and public services.

"While this is good news for councils and businesses, local authorities will face almost £10 billion of cost pressures by 2020 so we will now seek to work with government about how this proposal can be introduced more quickly.

"We would expect measures to ensure local areas with less ability to generate business rates income do not suffer as a result of these changes and all councils are also given leeway to vary business rates up as well as down.

"Councils currently have to fund half of all business rates refunds but, by 2020, they will be liable for 100 per cent under this new system. This makes reform of the appeals system even more urgent to protect councils from the growing and costly risk and appeals and ensure businesses are happy with what they pay."

Detail

One year ago, we called for councils to be able to retain 100% of business rates growth in our 100 days campaign; one year on, the Chancellor has now actioned it.

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