Revaluation of business rates by the Government in the capital is ‘short-sighted' and ‘hugely damaging', London Councils has warned. The comments follow details of the business rate revaluation, published by the CLG. In March, a damning letter was written to the chancellor, Alistair Darling, by London Councils' chairman, Cllr Merrick Cockell, in which he highlighted the ‘crippling effect' of business rate rises during the recession. Cllr Cockell said the ‘dramatic' increase was ‘contrary to the Government's commitment to support smaller businesses.' He also warned the chancellor the rate revaluation would be based on values dating from April 2008 – months before the credit crunch took its toll – and since then, the capital had ‘borne the brunt' of the downturn. Cllr Cockell believed a ‘considered dialogue' was needed to avoid the rates rise having the same effect as the previous revaluation, which ‘badly disadvantaged' London. Therefore, rate rises would be set by an artificially-high figure, without any relation to a current fair rental value. Cllr Cockell said: ‘Forcing London's businesses to pay rates based on pre-recession values is short-sighted. Introducing inflated rates at this time will really hamper their recovery.' London Councils has also called on championing the £2bn small business rate relief scheme to assist those finding it hard to raise the cash. Local government minister, Rosie Winterton, claimed that the majority – 60% – would pay less. However, she has said the relief scheme would help those set to struggle. ‘The revaluation will make sure each business pays its fair contribution and no more – it will not raise a single extra penny for government,' Ms Winterton said.
