Monday 20 March 2017
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Scale of businesses forced to make cutbacks as a result of new business rates revealed
The potential impact of the revaluation of business rates which come into force next week can be revealed by the latest survey from London Chamber of Commerce and Industry (LCCI).
It shows that 60 per cent of London businesses facing an increase in rates are having to make negative plans such as reducing staff numbers, scaling back of recruitment or capital investment, downsizing or relocating.
Although some businesses will benefit from transitional relief announced by Philip Hammond in the Spring Budget, LCCI believe the scale of the cutbacks could be devastating for London.
Chief Executive of LCCI, Colin Stanbridge said:
"There was a huge amount of worry before the budget about the hikes in business rates in the capital. In response all that has really been done is for the Government to announce just enough to show that they recognise that in many cases the rises are unfair.
"However the reality is that the scale of worry and negative planning that is happening among London business far outweighs this paltry offering.
"We still need a full scale review of the business rates system and we need it before we see businesses folding or moving outside of London."
The poll of more than 500 businesses conducted before the budget by ComRes, on behalf of LCCI found that among those businesses whose rates are increasing (202 businesses):
- 27% plan to reduce in capital investment
- One in five plan to reduce recruitment (22%) or downsize (20%) as a consequence
- 18% plan to reduce staff numbers
- 17% intend to move activities out of London
- 17% will reduce investment in training
- 13% will relocate activities within London
- Just 40% said they would not make any of these changes
The survey also found that larger businesses (with ten or more staff) were more likely to reduce overall staff numbers (27%, compared to 15% for smaller companies).
NOTES TO EDITOR:
1. London Chamber of Commerce and Industry (LCCI) is the capital's largest and most representative business organisation, with members ranging in size from multi-national companies to SMEs and sole traders.
2. Colin Stanbridge, Chief Executive is available for further comment and interview.
3. ComRes surveyed 504 London business decision makers online between 14 February and 2 March 2017.
Data was weighted to be representative of all London businesses by company size and broad industry sector.
ComRes is a member of the British Polling Council and abides by its rules. Data tables are available at www.comresglobal.com
4. The Spring Budget was announced after the polling had been completed.
5. The figures are based on Parliamentary statistics of more than 1 million businesses in London.