No interest group bleats more consistently than the business lobby. It is the Kevin and Perry of public affairs. Flouncing around, tossing its fringe, harumphing at every government announcement, greeting change with a whiny “it’s not fair”. And little sign of it growing up and moving on after eleven years of devolution. Living with Kevin and Perry would almost be preferable.
The latest wheeze is to clog up the business rates revaluation process with appeals. Every 5 years, the value of business properties is assessed and rates recalculated accordingly. It is a retrospective process, looking at the average value over the previous five years and that sets the level at which occupiers, owners, tenants etc will be expected to pay their rates for the next five years. As with most systems it is far from perfect but it does try to factor in an element of fairness, ensuring that good times and bad are factored in. Each revaluation produces winners and losers.
Business “leaders” though are complaining that this revaluation was conducted in 2008, after five years of growth in property values, and just before the financial crash and the recession. Consequently, many revaluations have increased the amount of business rates due. But because the value of business property is much lower now than in 2008, people are being asked to pay rates that are apparently over the odds. Which of course isn’t fair. So anyone disgruntled with their new valuation is being urged to appeal. A third more than usual already have.
What’s my problem? Well since you ask, how about the attempts to constantly shift the system in their favour with little thought of the consequences and impact elsewhere? Let’s call it the theory of Thatcher’s children in action, where there appears to be no society, only a collection of individuals.
Rates were last revalued in 2008 and an average assessed over 1998-2003 when no doubt property values were significantly lower. So the actual rates being paid in the last five years were probably much lower than the property’s actual value. In short, many businesses were quids in, could make more profit and pay less dues. Were businesses urging the Scottish Government to review the “unfair” system then? When business was booming did the lobby urge businesses to save for a rainy day in rates levels? Did they take up a voluntary collection and present the Scottish Government with a cheque showing their commitment to fairness in the system? No, of course not. The system is only “unfair” when it appears to be loaded against them.
Apparently the big hikes in rates being faced by many businesses threaten to derail the economic recovery. Sorry to be the one to let you of all people know, business leaders, but we are facing much bigger threats than this. Everyone, not just business, is facing extra costs and pressures on their incomes. Undoubtedly any added financial burdens are unhelpful, particularly to struggling small businesses. But the Scottish Government has already put in place measures to help them. It also claims that over 60% will either face no increase or actually will see their rates go down. Because that is the seesaw effect of revaluation.
Clogging up the appeals process might seem like a jolly wheeze to inject a little fairness but all it will do is make the system more inefficient and costly. If more appeals are received there will be few savings in the next few years to be made from assessors’ departments. That adds to the general bottom line of the public sector. And all the while “business” will be shouting for the public sector to become more efficient and more like them, when their actions would speak so much louder than their empty words.
Perhaps worst of all is that some of the businesses involved in this charade are not businesses at all. They are local authorities and quangoes. So we have the unedifying process of parts of the public sector pitted against each other in the drive for efficiency savings. It’s the kind of public sector cyclical inefficiency that must be junked in the re-imagining of public services that everyone keeps saying is so necessary and also desirable.
As with most self-centred adolescents, every drama is easily and readily turned into a crisis. Next, business will be claiming that the revaluation of business rates ruined their lives…..
Isn’t it time we just started ignoring their antics, the one tactic known to work, or at least save the sanity of parents of teenagers?