Council leader writes to government as small shops hit by £1,500 bill

Councillor Richard Farnell

Rochdale Council leader Richard Farnell has written to the government's Small Business Minister asking her to visit the borough to see for herself the serious damage being caused to 1,000 small shops in Rochdale, Middleton and Heywood.

They have all been hit by the government's decision to end the national business rate relief scheme for small retail premises. The shops face extra bills of up to £1,500 next month which could force a number to close.

The text of Councillor Farnell's letter:

Rt Hon Anna Soubry
Minister of State for Small Business, Industry and Enterprise,
Department for Business

Dear Minister, 

You will be aware of the decision of the Chancellor of the Exchequer to end the business rate relief scheme for small retail premises from April.

That decision will affect around 1,000 small shops in the Metropolitan Borough of Rochdale who now face extra bills of up to £1,500 a year from next month.

This decision has come like a bolt out of the blue. Many businesses are unaware of the decision by the government to scrap the scheme. No notice has been given to these businesses to allow them time to plan for such a large and unexpected bill.

All the businesses affected are small retailers, probably the one sector of business that can least afford such a big business rate increase.

My fear is that a number of these small, often family owned retailers will struggle to pay this sudden financial hit and be forced to shut up shop. To many, £1,500 is the difference between survival and going bust.

They are run by people who work extremely hard and long hours to provide an excellent service to their customers and local community. They struggled to survive the recent recession, only now to be hit with this.

They also employ several hundred people and are an important source of employment.

I cannot understand the logic of the government in cutting such an important lifeline to those businesses who need it most. Neither can the 1,000 Rochdale retailers who are now faced with this added financial burden.

As small business minister I hope you are as concerned as I am at the devastating impact this sudden and reckless decision will have.

I would like you to visit Rochdale and meet some of the businesses affected by the cut in rate relief and listen to these retailers who will struggle to survive because of it. You will be able to see for yourself just how anti-small business this cut is.

Rochdale Council supports small businesses in whatever way it can. One example is offering free parking in our town centres to boost trade. Our own two-year business rate discount scheme for new shops opening in Rochdale town centre has won national acclaim and has halved the vacancy rate in the town centre.

However, Rochdale Council simply does not have the resources to step in and fund the government's retail business rate relief scheme, much as we would like to keep it going.

The Council is facing a further £30million of spending reductions over the next two financial years, bringing the total cut backs since 2010 to close on £200million.

It is just financially impossible to take over the funding of the government's scheme, which we estimate would cost the local authority £1million a year.

I would ask that you use your influence and authority as small business minister to persuade the Treasury, even at this late hour, to reinstate this scheme and save thousands of small shops throughout the country from possible bankruptcy.

I would also ask that you visit Rochdale as soon as practicable to meet and listen carefully to the traders facing possible ruin caused by your government's damaging policy.

I look forward to hearing from you.

Yours sincerely,

Councillor Richard Farnell
Leader of Rochdale Council