Government U-turn on business rates after Lib Dem Campaign

4.02.00pm BST (GMT +0100) Wed 1st Apr 2009

Liz Leffman meets business owner Christine Walker

Government yesterday announced a complete U-turn on their policy of raising business rates after a campaign led by Winchester MP Mark Oaten and his Liberal Democrat colleagues.

Two weeks ago Prospective MP for Meon Valley Liz Leffman was contacted by local businesses who had just received notice from the council informing them of steep business rate rises.

The business rate hikes left local enterprises facing steep bill increases that many of them feared they would simply be unable to afford. The move was heavily criticised, especially coming into force during the middle of a recession, and highlighted the difference between Government rhetoric and actual practice.

The rate increases were so steep because transitional relief, a mechanism which acts as a buffer to ensure businesses do not face huge rises from one year to the next, was being phased out for the last year of the current five year rate calculation cycle.

Taking the campaign to parliament Mark Oaten wrote to the Secretary of State for Business Lord Mandelson and also tabled Early Day Motion 1164 calling on the Government to extend transitional rate relief and expressing serious concern with the negative affect these rises could have on Winchesters businesses.

Yesterday's announcement, made by the Chancellor, means the rate rise will be spread over three years and effectively meets Liz Leffman's demand to ease the cash flow to local businesses.

Speaking on the announcement Liz Leffman said:

"I am very pleased that quick action by Mark Oaten, with whom I work closely, has resulted in a government U-turn. Many businesses in our area have been affected, and it is incredible given the present economic climate that the Government allowed this to happen. It shows how out of touch they are with the concerns of people in the "real" economy, and how little they understand what is needed to take us out of recession."