Business rates go west – and north

Regarding business rates, in The Comet last week, Mrs McCartney of Hitchin was distressed by the bad state of many roads and Mr & Mrs May of Letchworth Garden City by the level of council tax. I have recently found out that a major reason is the extent to

Regarding business rates, in The Comet last week, Mrs McCartney of Hitchin was distressed by the bad state of many roads and Mr & Mrs May of Letchworth Garden City by the level of council tax.

I have recently found out that a major reason is the extent to which business rates (also called non-domestic rates) collected by district and borough councils from Hertfordshire businesses (and thus, in effect, from the people who work in them) are transferred to other parts of this country, such as the north of England. If the people of Hitchin and Stevenage knew how much of their local taxes are transferred and money was still carried by railway, they would be ripping up the tracks to the north!

A few weeks ago, I happened to chat with someone from the Crawley Pensions Action Group and was astonished by the huge transfer of business rates money from his area. Crawley in Sussex is about the same size as Stevenage and also mainly a New Town. Apparently, its council tax payers are up in arms about the extent to which their local business rates money is being transferred northwards.

I have found that Hertfordshire's situation is just as bad.


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Using official figures provided by the Inland Revenue (Valuation Office Agency), Hertfordshire's businesses (really the people working in them) paid almost £450 million Business Rates to HM Treasury in 2006/7. The people of Hertfordshire received back a total of only about £200 million, as shown by official figures from the county council (about £123 million), the 10 district and borough councils and the Police Authority (about £6 million each).

So £250 million per year is being raised locally and spent elsewhere. That amount is equal to 10 times Hertfordshire County Council's yearly expenditure on road repairs and maintenance, or to reducing council tax everywhere in Hertfordshire, which has about 300,000 dwellings, for every dwelling by about £800; so Band D would drop from about £1,300-£1,400 to about £500-600!!

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Taking County Durham as an example, the total collected in business rates there is about £90 million per year. However, although it covers a population just under half that of Hertfordshire, Durham County Council alone (i.e. ignoring what its district and borough councils and the Police authority received) received about £112 million from the redistributed business rates in 2006/7; and it does not run the Fire and Rescue Service as our county council does!

In other words, just considering the county councils, the present Government and its MPs gave to County Durham more than the total collected there and to Hertfordshire less than one-third of the total collected here, when Hertfordshire has just over twice Durham's population! It is hardly surprising that our roads are so bad and yet our council taxes are so high!

ANTHONY BURROWS, Pixmore Way, Letchworth Garden City

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