"Breathe new life" into local high streets and Newcastle City Centre, Liberal Democrats demand of Chancellor

March 11, 2020 12:22 PM

Cllr Robin AshbyAhead of the budget, the Liberal Democrats are calling on the Chancellor to scrap business rates, replace them with a landowner levy and "breathe new life" into Newcastle city centre and neighbourhood shopping areas. Liberal Democrats councillors in Newcastle are supporting the call and claim that city centre retailers are citing business rates as a major cost pressure.

Acting Leader of the Liberal Democrats, Ed Davey, has warned that "the retail sector sounded the alarm bell on business rates a long time ago and Brexit has made these pressures even worse" and urged the Chancellor to adopt his party's policy in the Budget.

The Liberal Democrats want to replace business rates with a commercial landowner levy, based on the value of the land only. This would take the cost off businesses and help support high streets. By taxing landowners rather than businesses, half a million small businesses across the country would be spared the burden of property taxation.

The proposals would cut taxes for businesses by 7% in Newcastle but as much as 32% in County Durham and 28% in Northumberland - the degree of change reflects each authority's balance between large city centre and retail park retailers, and small independent local businesses.

Newcastle Liberal Democrat Opposition spokesperson on business and development Cllr Robin Ashby (Parklands Ward) said:

"Many retailers and small businesses in Newcastle are under pressure from economic uncertainty, the rise of online retail and the burden of business rates. There are now very clear risks to the retail sector from the effects of coronavirus too.

We are already seeing major retailers like Cath Kidston leaving Newcastle city centre. Business around Grainger Market are feeling the squeeze. On Northumberland Street, the large vacant store next to Primark reportedly has a business rates liability of over £500,000 a year, meaning that no retailers seem to want to take this unit on.

Most significantly, there are reports that shopping centre operator Intu is in serious difficulty. This poses a risk for Newcastle city centre and the council given that it has had a long term partnership with Intu and a major financial dividend from Eldon Square. The council has not yet commented publicly on how it is mitigating this risk."

"Liberal Democrats are campaigning to create the environment needed for businesses to grow and create jobs in Newcastle and across the North East. Our proposal would lift numerous small shops and business out of business rates, giving a significant boost to local shopping areas. In the longer term, we would move to replace business rates with an alternative based on land value tax."

Acting Leader of the Liberal Democrats Ed Davey added:

"The Conservative government has ignored British high streets for too long by allowing the broken business rates system to continue. There is no more time to waste. The Chancellor must announce in the budget that he will adopt the Liberal Democrat policy now rather than simply consult to introduce it in the long term.

"The retail sector sounded the alarm bell on business rates a long time ago and Brexit has made these pressures even worse, as the Local Data Company's closures figures show. Manufacturing faces similar struggles, where Johnson's trade barriers are adding more costs on top of their already high business rates bill.

"The Government cannot afford to let two key sectors of our economy that employ millions get crushed between business rates and Brexit. The Liberal Democrats will keep pushing the Government to take urgent action in the upcoming budget."

The Liberal Democrats locally (at Newcastle City Council meetings) and nationally in Parliamanet and its manifesto have proposed that:

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.
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
Liberal Democrat figures suggest that in our region, the plans would represent the following reduction in average business rate charge:

Newcastle -7%
Gateshead -2% [the Metro Centre's dominance distorts the figures]
Sunderland -18%
North Tyneside -18%
South Tyneside -25%
Northumberland -28%
County Durham -32%