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Leeds council leader backs Leeds West MP Rachel Reeves’ calls to end business rates

Words: Richard Beecham, local democracy reporter

The leader of Leeds City Council has backed shadow chancellor Rachel Reeves, after she announced Labour Party plans to scrap business rates in a speech this afternoon.

Leeds West MP Reeves told Labour Party conference that many businesses were “struggling”, and that a “cliff edge” in rates relief loomed. She called for the scrapping of high street rates by 2023, which would be funded by an increase in tax on online businesses.

leeds civic hall

Leeds City Council leader James Lewis has welcomed the plans, claiming they would not put extra strain on local authority finances.

Business rates, which are taken from high street businesses, are currently a big earner for local authorities like Leeds City Council, which is expected to take in around £158m from a pooled fund for West Yorkshire.

Coun Lewis (Lab) said: “It’s great to hear Rachel getting to grips with the challenges facing businesses on our high  streets and start ups in Leeds successful tech sector.

“Bringing business rates upto date and encouraging investment without costing the council a penny will make a real difference.”

At a speech at the Labour Party Conference, Ms Reeves had said:

“They are struggling right now, with a cliff-edge in rates relief coming up in March.

“The next Labour government will scrap business rates.

“We will carry out the biggest overhaul of business taxation in a generation, so our businesses can lead the pack, not watch opportunities go elsewhere.

“And here is our guarantee: the system we replace it with will incentivise investment, feature more frequent revaluations, and instant reductions in bills where property values fall, reward businesses that move into empty premises, encourage, not penalise, green improvements to businesses, and no public services or local authorities will lose out from these changes.

“Labour’s approach will be based on working together, with businesses, workers and public bodies all pulling together in a national endeavour to rebuild Britain and to seize the opportunities of the future.”

Under the plan, the party said it would freeze business rates until 2023, and make further rates relief available to smaller businesses. This would be paid for by an increase in digital services tax on online businesses to 12 per cent.

She added: “(It would) Make sure online companies who have thrived during the pandemic are paying their fair share of taxes too.

“Our whole system of business taxation is not there, and it is not fit for purpose. How can it be when bricks and mortar high street businesses are taxed more heavily than online giants?”

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