MyCity: LONDON

BUSINESS RATES TO EASE PRESSURE ON SMES, RETAIL AND F&B

SUSTAINABILITY

Neither the Government Energy White Paper nor the London Plan, both published in 2021, leave the reader in any doubt as to their authors’ commitment to deliver a Net Zero Carbon environment. The Mayor of London has set a target for London to be net zero carbon by 2030, and the Energy White Paper identifies 2050 as its target date for the transition to clean energy. The Energy White Paper is unequivocal in saying that the MEES requirement for non-domestic rented buildings ‘will be EPC Band B by 2030, where cost-effective’. This is a necessary ambition to tackle the climate crisis, but it does raise the question of what will happen to the many buildings in London that will not have achieved this by 2030 – some 90% of the London’s non-domestic stock. The pressure to refurbish, reposition and repurpose buildings rather than redevelop sites will become ever more key as carbon budgets get tighter, exemplified by the discussion surrounding the Marble Arch M&S redevelopment planning refusal in July 2023. While the planning inspector recommended approval, Michael Gove Secretary of State ultimately refused the permission citing a variety of concerns, which has been seen as a clear statement of intent surrounding the desire politically for buildings to consider re-use thoroughly before a redevelopment is pursued. The 2021 London Plan states that all new developments referred to the Mayor will be required to submit a circular economy statement as well as a whole life-cycle carbon assessment. Additionally, all developments in the Central Activities Zone, Inner London Opportunity Areas, Metropolitan and Major Town Centres, all areas of PTAL 5-6 and Inner London PTAL 4 must be car-free. This puts planning policy in London ahead of in terms of carbon reduction initiatives compared to many other UK locations. In addition, the expansion of the ULEZ scheme and other traffic quieting measures clearly demonstrates the direction of travel for vehicle use in the capital, but these schemes must be by a much improved and extended transport system to support all Londoners.

The government conducted a Business Rates Review in 2021, which led to various announcements from the Treasury and the forthcoming Non-Domestic Rating Bill. Many rateable values have fallen following the 2023 Revaluation which, combined with the freezing of business rates multipliers and scrapping of downwards transition, has led to significant falls of liabilities for many ratepayers. Rates relief for retail, hospitality and leisure businesses has been extended to 2023/24 and various protections introduced for small businesses who lose eligibility for either Small Business or Rural Rate Relief. Revaluations will now occur three-yearly so future rates liabilities should be more closely aligned to rental changes and economic performance. Whilst these measures will be welcome news to London’s business owners, it is crucial to London’s long-term future that Business Rates stop being the burden that they have been, particularly for struggling retailers and the thousands of SME’s that nurture the talented and ambitious people that make London what it is.

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