Recommendation 115

In the Labour Party Manifesto, published ahead of the 2024 General Election, it committed to reviewing the business rates system, identifying that the current approach “disincentivises investment, creates uncertainty and places an undue burden on our high streets.” 235 In the October 2024 budget the Chancellor of the Exchequer announced: a continuation of the retail, hospitality and leisure properties business rates relief and the introduction of a permanent lower tax for such properties with rateable values under £500,000 from 2026/27; an intention to introduce a higher multiplier for properties with a rateable value above this threshold; and, a freezing of the small business multiplier for 2025/26. 236 Alongside this a discussion paper, ‘Transforming business rates’, was published setting out the Government’s priorities for changing the system over the course of the Parliament. The intention of any changes would be to protect the high street, encourage investment and “creating a fairer system.” 237 The proposals set out in the paper reflect a number of the concerns we heard during the course of this inquiry. 238 The paper sets out an initial consultation timeline until March 2025.