Posted by

Kamala Mackinnon, Campaigns Adviser

09 Nov 2012

Since Parliament returned from recess, we have seen a flurry of legislative activity aiming to help revive the UK economy. The latest in these is the Growth and Infrastructure Bill, which will shortly enter the Bill Committee stage with BCC’s Mike Spicer giving evidence on this next week.

The Bill will provide:

  • Planning permission applicants with the option to apply direct to the Secretary of State if a council has been designated;
  • A postponment of the date on which business rates are revaluated in England to 1 April 2017; 
  • Creation of a new employment status of ‘employee-owner’.

The BCC welcomes legislative measures to promote growth and infrastructure – but believes that implementation must be a priority for both government and for Parliamentary scrutiny. Measures to enable infrastructure development have been passed before, but have faltered on implementation, and that must not be the case this time. The planning system has long been viewed as one of the main barriers to business growth - this is supported by a major survey the BCC undertook to seek the business view of the system in 2011; a total of 5,342 businesses responded. The survey found that the planning system had developed into an overly complex, costly and inconsistent process that discourages investment.

Since the survey was carried out there have been many positive developments that could improve the system for business. But the government can still go further. We would have liked to have seen measures in the bill that would extend the scope of permitted development rights. We also think that the government should be bolder and drop its commitment to maintain the green belt in its current form. Some of the green belt is of little environmental value, and the bill presented an important opportunity to create a new power to revoke greenbelt satus of some sites where there is an overriding economic case for development.

We are presently consulting businesses on the surprise proposal to delay the revaluation of property for Business Rates to 2017. We have already had significant feedback from businesses, surveyors and the property industry expressing their concerns with the delay to revaluation: many of these businesses, particularly outside the capital, are paying rates on values from the peak of the market in 2008.

The government has also missed an important opportunity to ease business costs in this bill; for example unlinking business rates rises from the previous year’s September RPI inflation figure. The 2.6% rise businesses face in April 2013 comes after a 5.6% rise in 2012 and a 4.6% rise in 2011.  Therefore businesses are carrying the can for local funding at a time when council tax is frozen – a situation which cannot continue.

The BCC has given a cautious welcome to the proposals around employee-owner status. However, we would reiterate our belief that this is only attractive to a small minority of companies, and that detailed consultation is required for the policy to have a practical impact.