Business rates system should be axed to ease the burden on high street shops, urges Vince Cable
The 'broken' business rates system should be scrapped to ease the burden on struggling high street shops, the Liberal Democrats have said
Sir Vince Cable, the party's leader and former business secretary, said the system was hurting the economy and gave an unfair advantage to online retailers.
He called for it to be replaced by a new tax which would only be levied on land value – and not buildings and equipment.
At the moment rates are calculated using 'rateable values' based on shop rents, meaning bills can go up if business owners improve their properties.
But Sir Vince said: 'Business rates were a badly designed policy to begin with and have become an unacceptable drag on our economy.
'They are a tax on productive investment at a time of chronically weak productivity growth, and a burden on high streets adapting to the rise of online retail.
'By only taxing land and not the productive capital above it, this reform would remove a major disincentive to investment, boosting productivity and contributing to a necessary revival in UK industry.'
His comments come as pressure is mounting on the Government to review the system, which critics say is helping destroy traditional retailers.
High street shops must pay crippling rates on their bricks-and-mortar premises, while internet giants such as Amazon pay less for out-of-town warehouses.
The Mail has launched a campaign calling on ministers to save the high street by reforming business rates.
In a report, Lib Dem advisers and Adam Corlett, an independent analyst, described the current system as 'broken' and said a land value tax would dramatically reduce the burden on high street shops.
Factories and computing businesses with large amounts of equipment would be among those who benefit the most.
By Matt Oliver for The Daily Mail