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The government’s plan to allow councils to retain business rates shouldn’t be used as an opportunity to increase rates, says the British Chamber of Commerce (BCC).

Commenting on the announcement made by Nick Clegg at the LGA Conference on localising business rates, BCC director general David Frost said, ‘The plans to allow councils to retain business rates are a step in the right direction, and will enable communities to benefit from their own success. Giving councils the freedom to lower rates will help them attract thriving businesses to their areas, which in turn will boost enterprise and growth.

‘However, this must not be used as an opportunity to increase rates, which could see us return to the days of councils using rates to subsidise lower council taxes.’

Frost added that a national cap must be implemented to prevent the system from being misused, and that firms must be reassured that business rates will not be set above the current uniform rate.

He continued, ‘Retaining business rate revenues will promote a pro-growth and pro-business attitude among councils. Together, with new powers to borrow against those revenues to finance infrastructure projects, these plans have the potential to really drive economic development at a crucial time for the UK economy.

‘But we have heard a similar rhetoric from the government on these issues before. Now is the time to act on these promises and create the right conditions for the UK economy to thrive.’

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