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Independents give mixed reaction George Osborne's business rates reform

Independent retailers have raised concerns over the news this week that local councils will be given control of business rates in a complete overhaul of the system.

Chancellor George Osborne announced this week that by 2020 councils will be allowed to retain the £26bn raised through the tax each year and will be able to set their own business rates.

Under the existing system, central government takes a cut of the income generated before distributing the rest to local authorities.

Trade bodies cautiously welcomed the reform, on the proviso that rates are set in partnership with local businesses.

The British Retail Consortium called for more detail on this and how the wider review of business rates, which was announced in March and is due to report by the 2016 Budget, is progressing.

Independent retailers Drapers spoke to were equally wary.

William Coe, managing director of the six-store Coes department store group, said: “On the plus side, if the council is business-minded and works in partnership, it should be a good thing. 

“My only concern is the impact rising levels of rates might have on BIDs [business improvement districts] in towns where there is a certain level of competition for income – businesses can only fund so much.”

Deryane Tadd, owner of Drapers Awards-winning indie The Dressing Room in St Albans, said devolution seems like a good idea in principle, but feared it could be “shambolic”.

“How are they going to spend the money? Will local governments have the expertise in place to put it to good use?

“We need to see some benefits from it. It seems like a great idea but it remains to be seen how it will work in reality.”

Simon Poole, managing director of menswear brand and retailer Luke, which has five stores, said: “The rates are dramatically out of proportion and they are just shifting the onus onto councils, who won’t want to lower them. It’s not a good thing.

“The government should have taken ownership of the situation and done the revaluation [which has been pushed back from 2015 to 2017]. It’s the retailers who are losing out.”

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