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NEWS STORY
CROSSRAIL FUNDING COULD RISK LONDON RECOVERY
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| July 30, 2009 |
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The recovery of London businesses risks being undermined by the Greater London Authority's (GLA's) plans to move ahead with funding Crossrail using a Business Rate Supplement (BRS).
Reacting to the GLA's Initial Prospectus for Crossrail, published today (Thursday), the British Retail Consortium (BRC) said while Crossrail is much needed and long overdue – retailers will contribute far more than they will benefit from the scheme.
The BRC estimates retailers will pay out a quarter of billion pounds in BRS contributions before they see any benefits from their Crossrail investment – this at a time of tough trading conditions and with consumer confidence at near record lows.
This comes on top of next year's business revaluation – which is expected to raise London's business rates by the largest proportion compared to any other region. Both new cost pressures will apply from April 2010 - further undermining the prospects of a swift recovery.
Stephen Robertson, BRC Director General, said: "Crossrail is a much needed and long overdue project, but London retailers will pay out far more than they can ever hope to get back.
"Requiring retailers to disproportionately fund Crossrail is wrong at any time, but is especially ill-timed given the current tough trading conditions – especially for non-food retailers.
"London retailers will have to fork out for Crossrail BRS from April 2010 – just as they are hit by a massive revaluation bill. But they'll only see any benefits by 2017 at the earliest and will continue funding the project until 2036. Retailers already contribute the largest share of business rates and next year's revaluation is expected to raise London's business rates by the greatest proportion of any other UK region.
"The GLA mustn't pay lip service to the Crossrail BRS consultation process. We expect there
to be considerable opposition to the funding proposals and will be closely monitoring the GLA's response."
Notes to Editors:
- The BRC has consistently opposed the BRS proposals – urging the Government to ensure there are sufficient safeguards to ensure local authorities do not use the tax to simply boost their own coffers.
- When the BRS Bill reached the Report Stage in House of Lords in June 2009, the BRC warned that an amendment exempting Crossrail funding from requiring to ballot businesses before introducing BRS needed to be removed.
- The BRC is disappointed that additional safeguards have not been introduced including failure to deliver:
- A mandatory business vote before the introduction of any BRS
- A clear framework to hold local authorities to account in developing and implementing BRS proposals
- Retailers pay 25 per cent of business rates despite representing only 8 per cent of Gross Domestic Product
Media Contacts: BRC Press Office 020 7854 8924 Out of hours 07921 605544
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