On Tuesday Jake Berry MP welcomed the localisation of business rates by repeating verbatim the announcement made by the Communities Secretary Eric Pickles.
What was not mentioned was that councils don’t get to keep all the business rates they collect, only a portion of any growth.
Beneficiaries of the scheme will be councils like Westminster City that already has more start-ups annually than Birmingham, Cardiff and Manchester combined.
Councils that, through no fault of their own, don’t have sites to develop will see little benefit from this incentive.
Amongst businesses there will be winners and losers too. Manufacturing and small businesses are likely to lose out to businesses that generate higher rates like supermarkets.
Local retention of business rates also allows for Tax Increment Financing (TIF).
This means local services are paid for by borrowing against future business rates.
So any extra money councils get to keep will be used to pay interest on its increased debt burden.
Tom Evans, Darwen Labour Party Parliamentary spokesperson.
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