LOCAL SMALL FIRMS TO BENEFIT FROM LIBERAL DEMOCRAT PLANS

12.00.00am UTC (GMT +0000) Wed 23rd Mar 2005

Around a thousand businesses in Leeds North West constituency would save more than £600 a year on their annual rates bill under proposals unveiled from the Liberal Democrats.

Welcoming the launch of the Liberal Democrat Manifesto for Business, Cllr Greg Mulholland, Liberal Democrat Parliamentary Spokesperson for Leeds North West, said:

"This is great news for local small firms, who are getting a raw deal from the Labour Government.

"Small businesses currently pay much more of their turnover in business rates than larger companies. This is just not fair. The Liberal Democrats will introduce a Business Rates Allowance that will deliver relief on business rates for smaller businesses, saving them, on average, over ?600 a year.

"We will also slash the red tape, bureaucracy and over-regulation that are holding local businesses back. No new regulation will be passed until there is a full published assessment of its costs and necessity. Instead of bureaucratic central government business support schemes we will provide businesses with advice and support accessible on the ground where they operate.

"And we will equip school leavers with the kind of skills local employers really need. From the age of 14 we will give pupils greater choice on how they continue their education, including the option of taking up an apprenticeship or other accredited workplace training scheme."

Notes

(1) The Liberal Democrats propose reforming the business rates system to allow firms with a rateable value of less than ?25,000 to claim a business rate allowance of up to ?1,500. This means a saving of ?628.50 a year for the majority of small businesses. This will be funded by a corresponding rise in rates liability for businesses with a total rateable value above the allowance threshold. This would be applied by adding a supplement to the rate paid per pound of rateable value for larger businesses. This would ensure that the supplement would be proportionate to the size of the business, so those falling just outside the ?25,000 threshold would face much less of a liability than the very largest businesses. Initial calculations based on our estimates suggest that the levy on larger businesses would be around 1p extra in the pound. We believe this is fair because under the current system small businesses pay much more of their profits in business rates than larger businesses.

(2) The estimate of around a thousand businesses in Leeds North West benefiting from the Liberal Democrat business rate relief proposal has been calculated as follows. Government figures show there are 1.35 million business properties with a rateable value of less than ?25,000 across England. Divide that by the number of parliamentary constituencies in England (529) and you get an average of 2,552 per constituency. However not all business properties with a rateable value of less than ?25,000 will be occupied by small businesses with a total property portfolio of less than ?25,000 (e.g. some of these properties might be small units occupied by larger companies). We have estimated that 42% of them will be eligible for our scheme - the same proportion as the proportion of business properties with a rateable value under ?10,000 that are eligible for the Government's own, less generous, rate relief scheme (applying only to businesses with a rateable value under ?10,000). 42% of 2,552 comes to a rough estimate of 1072 eligible businesses per parliamentary constituency.

(3) The full Liberal Democrat manifesto for business can be viewed on the Liberal Democrat website: http://www.libdems.org.uk/media/documents/policies/BusinessManifesto.pdf