Business rates system broken, says CBI leader

John Allan, president of the CBI, will tell a meeting that business rates have been partly to blame for the spate of high street closures.

Thousands of firms try to appeal against their rates, suggesting a lack of confidence and the need for a “fundamental rethink”.

Mr Allan will tell a meeting in London that part of the problem was uncertainty around when the next rates revaluations take place.

“The last revaluation period was extended from five years to seven. We can now expect revaluations every three years, but in practice, any longer than one year means business rates lag far behind economic cycles and - over the years - the significant rises in UK property costs.

“The result is a system that rewards those places already on their way up in the short term, but eventually pulls the rug from under them, and one that punishes those areas that are already struggling, with boarded up shops an all too common sight.”

Mr Allan said businesses installing energy-efficient measures such as solar panels face an increase in their rates.

He complained that the Government had only “tweaked” the system in recent years, adding: “The more sticking plaster we add, the greater the signal that the system is broken and in need of a fundamental rethink.”