Clive Betts – 2016 Parliamentary Question to the Department for Communities and Local Government

The below Parliamentary question was asked by Clive Betts on 2016-03-22.

To ask the Secretary of State for Communities and Local Government, under what criteria local authorities will be compensated for the change in the updating of business rates from RPI to CPI.

Mr Marcus Jones

Our business rates tax cuts provide significant support to local businesses.

The Small Business Rate Relief measure announced at the Budget which starts in 2017-18 will mean 600,000 of the smallest businesses will not have to pay business rates. We will compensate local authorities, in full, for the loss of income as a result of this measure, in the same way as we have done for every other reduction to business rates we have made since the introduction of the business rates retention scheme.

In addition, from April 2020, the annual indexation of business rates will be changed from RPI to be consistent with the main measure of inflation, currently CPI. The impact on local authority revenues, post-2020, of this and the other changes announced at the Budget will be considered as part of the Government’s work with the sector on implementing 100 per cent business rate retention.