Cross-party MPs have given the green light to Sir Michael Lyons plans for a supplementary business rate – but with some minor amendments. The Communities and Local Government Select Committee this week issued reports on supplementary business rates (SBR) and council tax benefit. The SBR was one of the proposals to be endorsed by the Government when it was mooted by Sir Michael in his report on local government finance in March. According to the committee, the Government should back the proposals – and councils should be able to cut as well as increase business rates. However, its members suggest it should include a requirement for the business community to agree the introduction, rate and the purpose of the levy. For larger rate increases, the business community should be balloted. LGA vice-chairman, Sir Jeremy Beecham, said the current business rates scheme was over-centralised and ‘undermined' local democracy. ‘It is good news that the Government is doing something about it. This suggests that central control over local funding is being loosened,' he said. In its proposals for London, the select committee went further than the Lyons review, which called for a capital-wide levy under the Greater London Authority. Committee members have called for boroughs to be able to raise their own rates, and give them the power to veto the GLA. London Council's chairman, Merrick Cockell, said: ‘I am delighted the select committee has endorsed our view that any more moves to introduce a supplementary business rate should include a local element.' Not everyone is happy with the plans. British Retail Consortium director general, Kevin Hawkins, said the Government was being ‘spectacularly naïve' if it thought the power would not be abused. ‘Giving local authorities the power to directly tax businesses is like setting Pooh Bear loose on the honey reserves,' he said.
