The move was cautiously welcomed by some agents, but others said they feared it would lead to a significant increase in bills for high street shops.
Under the plans, announced at the Conservative party conference this week, councils will be able to keep all of the £26 billion raised annually through business rates.
They will also be allowed to reduce business rates by as much as they want, but can only raise rates if they have an elected mayor.
Rates can only rise by 2% and the money raised from this increase must be spent on infrastructure.
Nick Harding-McKay, from Balham-based Travel Designers, warned that the government was “playing Russian roulette” by making business rates subject to the political control of local councils. “Businesses don’t vote so when it comes to election year, councils can put up business rates and cut council tax to please their voters,” he said.
“Councils might think businesses can afford it but the margins are very thin in travel. I might have to cut my marketing budget and that will mean fewer bookings. The current system isn’t broken, so why fix it?”
Dave Batley, of Savvi Travel, agreed, admitting he was worried councils could use the ability to set business rates as a “cash cow”. “I think I will end up paying more than I do now although there’s a possibility rates could come down,” he added.
“What’s going to happen to small business rate relief – is that going to stop?” Other independent agencies were more cautious in their reactions to Osborne’s announcement. Gemma Antrobus, managing director of Haslemere Travel and chairman of Aito Specialist Agents, was “cautiously optimistic” about the business rate change.
“It sounds like a good idea but it has to be managed well locally by councils and the situation will be different for each area,” she added. “I don’t think it will cause businesses to move to the next county if it has lower business rates, but it might be part of the decision-making process for new businesses.”
Steve Pattenden, from Double S Travel, added that Osborne’s move “could help as long as councils have got the ear of local businesses”.
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