Communities and Local Government Committee: Press Notice

Session 2006 - 07 7 August 2007

Publication of Report

Local Government Finance - Supplementary Business Rate

Local authorities should have the power to make local variations to business rates

The Communities and Local Government Committee, a cross-party select Committee, of the House of Commons has today called upon the Government to allow local authorities the power to make marginal local variations, upwards or downwards, to the rates charged to businesses.

In its report, Local Government Finance - Supplementary Business Rate, the Committee says that the Government should look favourably upon proposals put forward earlier this year by Sir Michael Lyons in his report on the future of local government. The Committee says that allowing councils to vary local business rates would be a positive step towards financial devolution and would allow councils to take a stronger role in building the identities and distinctiveness of specific areas.

The Committee stresses the need for the Government to set the basic parameters within which a supplementary business rate might operate to protect local businesses and support the local economic environment. These should include a requirement to secure the agreement of the local business community not only to the introduction of a supplementary levy but also upon the purposes to which revenue from the levy should be applied. The Committee also believes that where larger variations are contemplated, a ballot among the business community affected should be the norm. And importantly, that the rate and duration of any levy should be clearly defined at the outset. Within these basic parameters, however, as many decisions as possible - on operation, on rates and on investment priorities for example - should be made at a local level.

Upon publication of the report, Dr Phyllis Starkey MP, Chair of the Committee said ₓsupplementary business rates would be a significant step forward in terms of liberation and local empowerment. If the Government gets the framework right, local authorities will be able to take forward these proposals in a manner closely tailored to the specific needs and individual circumstances of the areas they representâ‚?.

She added: ₓThe Committee understands the concerns that some parts of the business community have about returned even a small element of control over business rates to local authorities but we believe that the protections and safeguards we have recommended would do much to alleviate businesses concerns and to reduce the possibility of negative unintended consequences. Supplementary business rates could offer local areas a means of investing in themselves, in their futures and in their economic development.â‚?

Notes for Editors:

1. The Communities and Local Government Committee launched its inquiry on 8 May 2007, following the Lyons Inquiry into Local Government. One evidence session was held on 19 June 2007.

2. The Communities and Local Government Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Communities and Local Government and its associated bodies.

3. The current membership of the Communities and Local Government Committee is as follows: Dr Phyllis Starkey MP (Chair, Lab), Sir Paul Beresford MP (Con), Mr Clive Betts MP (Lab), John Cummings MP (Lab), Martin Horwood MP (Lib Dem), Mr Greg Hands MP (Con), Anne Main MP (Con), Mr Bill Olner MP (Lab), Dr John Pugh MP (Lib Dem), Emily Thornberry MP (Lab), David Wright (Lab).

4. Media Enquiries: Laura Kibby, Media Officer, Tel: 0207 219 0718/ Mobile: 07917488557 / e-mail:

5. The Report will be available in the following ways:

₠Copies of the Report may be obtained, on publication, from the usual outlets, including The Parliamentary Bookshop and The Stationery Office (reference: Seventh Report of the Committee, Session 2006-07, HC 719-I).

₠The Report will be posted on the internet at approximately 11.00 am on 7 August, and will be accessible via the Committee's website: