Liberal Democrats publish plans to cut property taxes by 7% in Newcastle upon Tyne to boost local businesses
The Liberal Democrats have published a comprehensive blueprint for replacing the broken business rates system to cut taxes for businesses
Local Liberal Democrats business spokesperson Cllr Robin Ashby described the plans as "exactly the sort of policy we need to boost local investment and ensure businesses in Newcastle thrive".
The report - Taxing Land, Not Investment - calls for the abolition of business rates and its replacement with a tax on land values, the Commercial Landowner Levy (CLL).
The levy would remove buildings and machinery from calculations and tax only the land value of commercial sites, boosting investment and cutting taxes for businesses.
Liberal Democrats members will debate and vote on the proposals at the party's Autumn Conference in Brighton later this month.
Robin Ashby said: "Time and again I have heard concerns about the devastating impact of business rates on struggling high streets and the wider local economy.
"It is the responsibility of the current Conservative Government to ensure that our businesses are able to thrive, but ministers are not doing anywhere near enough.
"Liberal Democrats demand better. That is why we are campaigning to create the environment needed for local businesses to grow and create jobs in Newcastle
"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 struggling to adapt to the rise of online retail.
"Many of the areas around the country that voted for Brexit feel they have been left behind. In place of policies the Brexiters offer only rhetoric. Great swathes of the country demand better, and this policy offers change to the manufacturing industry and the small towns passed over by economic growth."
The Liberal Democrats have carried out a detailed study of business rates and alternatives. Key recommendations from their report include:
- Business rates should be abolished and replaced by a Commercial Landowner Levy based on the value of commercial land only
- The levy should be paid by owners rather than tenants
- Non-residential stamp duty should be scrapped to improve the efficiency of the commercial property market
- Commercial land should be taxed regardless of whether the buildings above it are occupied; the tax should also apply to unused and derelict commercial land
The report also finds:
- The manufacturing and technology sectors would be the most significant beneficiaries of the CLL, receiving tax cuts of over 20%. Retailers in struggling areas would also receive a boost. Both of these categories are well represented in the North East.
- The CLL would represent a tax cut initially, but is likely to be at least revenue-neutral in the long-term. Redistribution between local authorities would be adjusted to ensure no change in local funding.
By taxing landowners rather than businesses, half a million SMEs would be spared the bureaucratic burden of property taxation. With far fewer plots of land than individual businesses, the CLL would save councils both time and money.