As regular readers will know, I have put supporting a healthy local economy at the heart of my work locally. So I am pleased that since 2010, the unemployment claimant count in South Shropshire has more than halved, and average wages have increased by £50 a week. There is no question that putting in place a strong economic plan, with the right conditions to allow business to thrive, is creating jobs and making life easier for local families across the Ludlow Constituency.
So I welcome cuts in Corporation Tax from 28% to 17% by 2020, and efforts to expand export markets, through the new Department for International Trade. Many local businesses already have a thriving export business, and I encourage those that do not to visit the new department's website, at www.gov.uk/government/organisations/department-for-international-trade, to find free information and advice on how to develop exports.
But I am aware of the challenges some South Shropshire businesses are facing from the current business rate review. Revaluations usually happen every five years, which allows business rates to be adjusted to reflect changes in the property market across England. The last revaluation came into effect in 2010, based on valuations in 2008, so it is not perhaps surprising there will be some significant changes. Rateable values are linked to the open market rental value, as estimated by the Valuation Office Agency independently of government.
The most recent revaluation comes into effect from this April under which nearly three quarters of businesses in England, including the majority in South Shropshire, will see no change or even a fall in their rates. This is due to the Government introducing a permanent 100% increase in rate relief for small businesses – so from April this year, businesses with a rateable value of £12,000 or less will pay no business rates at all.
But in South Shropshire some businesses located in areas where rents have been increasing (such as Ludlow town centre), and some businesses dependent on property (such as equine businesses with stables), with rateable values above this threshold (or the £15,000 taper threshold) are facing unexpectedly significant rises. This can be due to estimates made by the Valuation Office of increasing rents in the area or assumptions about the profitability of the business. It seems these assumptions may not reflect the reality on the ground.
I have met traders to discuss this and am concerned about the fairness of some of these proposed increases, as South Shropshire seems to have been disproportionately affected. So I have raised this issue with both the relevant Minister and the Valuation Office Agency. I have also written to the Chancellor to make him aware of my concerns.
Meanwhile, I am urging affected businesses to consider appealing the Valuation Office Agency’s valuation to provide actual rental and other evidence. This can be done online, at www.gov.uk/correct-your-business-rates. Unsuccessful appeals can be also challenged at Tribunal at no additional cost, with more information available at www.valuationtribunal.gov.uk.
South Shropshire’s economy is growing, but attempting to levy unsubstantiated rates increases on some businesses has the potential to put jobs at risk and slow our long term growth. So I will continue to work with local traders to press for fairer taxes for local businesses.
Philip Dunne MP