Magazine article Public Finance

Labour to Review Business Rates, Says Umunna

Magazine article Public Finance

Labour to Review Business Rates, Says Umunna

Article excerpt

Labour is re-examining the level of business rates and the way they are set, shadow business secretary Chuka Umunna has revealed.

In an exclusive interview with Public Finance ahead of his address to the CIPFA conference, Umunna said Labour could not yet commit to retaining the coalition government's business rate reforms. He also spelt out a number of ways that Labour would promote economic growth, including 'reinventing' the Department for Businesss, Innovation and Skills and other Whitehall departments.

Under the rate changes introduced in April this year, local authorities will keep 50% of business rate growth in their areas.

Umunna has asked the British Retail Consortium to submit a report on the new business rate arrangements for Labour's policy review. This will examine 'both the level and the way in which it is set', he said.

Asked if he thought the coalition's reforms had encouraged local authorities to boost growth, Umunna said rates remained 'the number one issue' for many businesses in the UK.

Labour was therefore examining how the tax operated, he added. Although he would not now commit to specific reforms, he said firm policy proposals would emerge before the 2015 general election 'We're looking at it overall at the moment, and we will give a more definitive indication of our priorities, and how we see business rates working, at the time of the next general election.'

Umunna's address to CIPFA delegates will be on 'designing the future state' and he shared with PF the Whitehall reforms being considered by Labour.

He said the party wanted to enhance the role of the public sector in fostering the conditions for prosperity and growth.

Criticising the government's economic policy, he said there was both a short-term need to 'get the economy moving again', and a medium-term requirement to 'reconfigure our economy so that it is fit for the future'.

To do this, the Department for Business, Innovation and Skills would be 'reinvented' to play a 'powerhouse' role in boosting the economy, including creating new government-backed plans for industries that would get state support.

He said Labour wanted to make the department a 'strong advocate' for what firms need from the public sector, and would work across Whitehall to support sectors of the economy that would be the focus for future growth. He compared proposals to 'pick' sectors to the pre-Olympics strategy of focusing on sporting events where the UK had a competitive advantage.

However, for such an approach to work, he said government needed 'commercial acumen and nous', which was currently missing due to a lack of real business experience across the civil service. ? think the state needs to be acting in a more entrepreneurial fashion. …

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