Andy Burnham’s Business Rates Gamble is a Busted Flush!

Every entrepreneur knows you can plan for high taxes. What you can’t plan for is politicians constantly changing the rules. That’s why Andy Burnham’s proposal to hand local politicians more control over business taxation should ring alarm bells.

Level playing field

For decades, businesses have operated under a national business rates system. You may not enjoy paying the bill, but at least the rules are the same whether you’re in Newcastle, Birmingham or Bristol. That’s called certainty, and certainty is what encourages investment. Give councils the power to set their own business taxes and that disappears overnight.

One authority cuts rates to attract investment. The next raises them to plug a hole in its finances. Two identical businesses, just a few miles apart, suddenly face completely different tax bills simply because they’re on opposite sides of a council boundary. That’s not competition that’s confusion.

Another layer of uncertainty

Businesses don’t make decisions for next month. They sign long leases, recruit staff and invest hundreds of thousands, sometimes millions, based on what the future looks like. The more unpredictable the tax system becomes, the more likely those investments are to be delayed, cancelled or taken elsewhere.

Let’s be honest, employers already have enough on their plate. National Insurance has risen. Wage costs are climbing. Energy bills remain stubbornly high. Adding another layer of uncertainty is the last thing Britain needs.

Political Football

Andy Burnham argues that local leaders know their economies better than Whitehall, and on that point he’s right. But understanding your local economy isn’t the same as setting business taxes. Councils should compete by delivering faster planning decisions, better infrastructure, safer town centres and stronger apprenticeships, not by turning business rates into a political football (there’s enough of that going on at the FIFA World Cup).

Business owners already take enough risks. They shouldn’t have to gamble on which side of a council boundary they happen to trade from. Britain doesn’t need a postcode lottery for business, it needs certainty.