Punitive rates deterring budding entrepreneurs
THE Northern Ireland Assembly this week approved a 2.7% increase in the domestic and non-domestic regional rates, which the Department of Finance and Personnel said continued a "real terms freeze" for the fourth year.
Commercial property agent Eamonn Murphy of Murphy Surveyors said the increase could have a detrimental effect on retailers in Northern Ireland, some of which could afford high rents or rates, but not both.
But rates aren't just a big issue in Northern Ireland with MPs in England and Wales deriding the system there as 'not fit for purpose'.
They said it risks destroying the high street unless the Government takes a more hands-on approach to fundamentally overhaul the way the payments are calculated.
A report out yesterday by the influential Business Select Committee said business rates, which are a tax charged on businesses as a proportion of their rent, are putting off future entrepreneurs from opening businesses.
Adrian Bailey, the chairman of the committee, said: "It's ironic. Many high streets have been around for 700 years.
"They survived Hitler's bombs but the Government's lack of action is doing more damage than Hitler ever managed."
The report comes after several months of evidence from retailers, organisations and politicians and was supposed to look at the wider retail industry.
However, Mr Bailey revealed: "We didn't go into the inquiry focusing on business rates, but all the witnesses said it was the biggest problem – all except the Government.
"Ministers refused to address it. It was like the elephant in the room.
"Every other topic was covered except business rates."
The report also criticised the Government's decision to postpone a revaluation by the Valuation Office Agency, which calculates rental values every five years to determine what business rates should be paid.
A revaluation was due in 2015 but this has been pushed back to 2017.
The Government claimed independent research showed that businesses in London – where the recovery is fastest – would be the biggest winners of the valuation going ahead as usual.
But the committee questioned the independence of the research because it was carried out by a branch of the Treasury.