Our high streets, pubs and local businesses are what give London its character. But from rising rents to Brexit uncertainty, it’s an incredibly difficult time for people who work hard running small businesses, and many have contacted me worried about their future in south London.
Instead of giving firms the helping hand they need, the Tories are planning the biggest business rates increases for seven years this April. And it is small firms in London who will be the biggest losers - businesses will pay based on how much their property is worth, rather than how much money they make, so inner London areas such as Southwark and Lambeth, where property values have increased dramatically, will be particularly badly hit.
At the last revaluation in 2010 no businesses faced an increase of more than 12.5% in the first year, but under this Government’s plan many in south London are facing cliff-edge rises - firms in Southwark will have on average 29.6% added to their bills.
The Federation of Small Business warns that micro businesses employing fewer than 10 people will have to find £17,000 a year on average to cover business rates from April. One constituent who runs a photography business in Peckham tells me he just does not know what to do to cover the shortfall, and it is likely he will close his business after four years, potentially declaring himself bankrupt in the process.
For independent cafes and pubs that just get by each month, these increases are simply unaffordable. It is not right that internet giants such as Asos and Amazon who have large warehouses outside of city centres get a cut in their business rates, at the same time as some south London pubs could be hit by a 40% rise.
Public service providers, such as Southwark Council will also be hit – having to pay an extra £1.25m to the Government for their own offices at a time when the Council is struggling to fund social care and emergency housing.
The Government say they plan to reform business rates so that local councils keep 100% of the revenue, but this will be in exchange for other government funding. Currently 70% of the growth in business-rate revenues will be kept by central government.
I along with my Labour colleagues Neil Coyle MP, Helen Hayes MP and Southwark Council will be writing to the Chancellor to urge him to listen to London businesses’ concerns. Business properties with a rateable value of less than £15,000 will receive 100% relief, but this urgently needs to be raised to a more realistic level to reflect London’s inflated property market.
In the longer term, this outdated system must be reformed to reflect today’s economy, ease the burden on high streets and ensure online businesses pay their fair share. From Brexit to business rates, many of businesses’ most pressing concerns are currently going unanswered. Labour will continue to hold the Government to account, call for an emergency transitional relief fund and stand up for local traders.