The steady rise in infections in many parts of England this week meant new restrictions to curb the spread were unavoidable. The Chancellor’s more generous job support for those under strict restrictions should cushion the blow for the most affected and keep more people in work.
However, many firms, including pubs and restaurants, will still be hugely disappointed if they have to close their doors again after doing so much to keep customers and staff safe.
But while these reactive support measures will help protect lives and livelihoods through the autumn and winter, broader steps will be needed to secure a long-term economic recovery.
Make no mistake, businesses are being challenged like never before. The resurgence in Covid-19 and its inevitable restrictions, plus the looming Brexit finale, represent an unprecedented twin threat to future prosperity.
With no timescale known for an end to the first of these problems, and ‘no deal’ still a frighteningly real prospect for the other, it’s proving impossible for businesses to plan too far ahead right now.
But not all problems are as new as these – or as difficult to solve. Indeed, one of the most long-term and recurring frustrations for the business leaders I meet across the Yorkshire and Humber, is the issue of business rates.
Business rates are – and should remain – an important source of revenue in England, for both central and local authorities. Companies recognise this. But they welcome Government moves to reform a system which was introduced 30 years ago, and which has seen little genuine evolution since – other than to creep upwards to the current European-high rate of nearly 50p in the pound. The rates system in its current form is out-of-date, unsustainable and in urgent need of remodelling. That much is acknowledged by all parties. And the time to act is now.
Without reform, business rates will continue to rise. And analysis published this week by the CBI and Avison Young reveals that would amount to an additional burden for business of a further £6bn over the next five years.
At a time when so many businesses are scrapping simply to survive, that could well spell the end for swathes of our region’s industry.
The CBI is advocating a major reform which would see the Uniform Business Rate frozen at 49.9p for the remainder of the current revaluation period (up to 2022/23) and then reduced to 44p – still higher than many other countries and well above the 35p level at which rates were first introduced in 1990.
We also believe revaluation timescales should be delayed to ensure assessments properly reflect the economic situation of a post-Covid world, and also believe reliefs should be properly targeted to support the most vulnerable businesses.
The Government accepts action is needed – and it was therefore no surprise that business rates relief was one of the first levers they reached for in the initial package of coronavirus support measures. But wholesale change is overdue, and its need has been dramatically accelerated by the economic damage done by the pandemic.
This must be the moment were we finally rethink the future and instigate meaningful change towards a fairer system which encourages investment and supports the levelling-up agenda.
The latest GDP figures released this week show we are rebuilding our economy, but progress is slow and obstacles remain.
Reducing the business rates burden can help stimulate much-needed growth in Yorkshire and the Humber and beyond.