Running a business is hard enough without having to second guess what your local council might decide to charge you next.
For years, businesses across England have operated under a national business rates system. You might not like the bill when it lands on your desk, but at least you know the rules are the same whether you’re opening a shop in Newcastle, expanding into Birmingham or taking on premises in Bristol.
That’s how it should be. That’s why I worry when I hear Andy Burnham talking about handing more control over business taxation to local politicians. He presents himself as a fresh face with new ideas, but scratch beneath the surface and I see the same old Labour instinct to give politicians more control over business. That’s not progress. It’s taking us backwards.
On paper, giving local communities more power might sound like a good idea. In reality, it risks creating a postcode lottery for entrepreneurs and making it even harder to invest with confidence.
If local politicians are given the power to decide how much businesses pay, what happens next?
“We’ve already got enough costs landing on employers. National Insurance has gone up. Wage bills have increased. Energy costs remain high for many firms. Inflation might be easing, but running a business certainly isn’t getting any cheaper.”
One council cuts rates to attract investment. The neighbouring authority puts them up because it needs more money. Suddenly, two identical businesses a few miles apart are paying completely different amounts in tax.
That’s not competition. That’s confusion. I’ve spent my entire career building businesses. One thing I’ve learned is that entrepreneurs don’t expect life to be easy. We know there will be setbacks, rising costs and economic uncertainty. What we do need is consistency.
Businesses make decisions years ahead. They sign long leases, invest in equipment, recruit staff and commit millions of pounds to new locations. Those decisions shouldn’t be influenced by whether the local council changes its mind after the next election.
Investment follows certainty, because the more unpredictable you make the tax system, the more likely businesses are to delay expansion, cancel projects or simply invest somewhere else.
We’ve already got enough costs landing on employers. National Insurance has gone up. Wage bills have increased. Energy costs remain high for many firms. Inflation might be easing, but running a business certainly isn’t getting any cheaper.
The last thing entrepreneurs need is another layer of uncertainty. Supporters of greater local control will argue that councils know their own areas best. In many cases, they’re right. Local leaders understand their communities far better than Whitehall ever will.
“There are plenty of ways councils can compete. Better infrastructure. Faster planning decisions. Cleaner high streets. Safer town centres. Support for skills and apprenticeships. Those are the things that encourage businesses to put down roots and create jobs.”
But understanding your local economy isn’t the same as having the power to set business taxes.
If every authority starts taking a different approach, companies operating across several towns and cities will face a patchwork of different costs and different rules. That’s more bureaucracy, more administration and more time spent dealing with paperwork instead of serving customers.
Surely that’s the opposite of what any government should want. If ministers genuinely want to encourage growth, they should be making Britain simpler for business, not more complicated.
The best way to attract investment isn’t by asking entrepreneurs to study dozens of different local tax policies before deciding where to expand. It’s by creating a stable environment where businesses know what they’re signing up for wherever they choose to invest.
There are plenty of ways councils can compete. Better infrastructure. Faster planning decisions. Cleaner high streets. Safer town centres. Support for skills and apprenticeships. Those are the things that encourage businesses to put down roots and create jobs.
Turning business rates into a local political football isn’t one of them. Britain needs more entrepreneurs, more investment and more companies willing to take risks.
Let’s not make that harder by replacing one national system with hundreds of local ones. Business doesn’t need a postcode lottery, it needs certainty.
