Calls to let local governments save the high street by setting their own business rates

“We need a system of local business taxation which is fit for the 21st century," says LGA

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More high street shops could be forced out of business without urgent action to help family firms and independent traders, council leaders have warned.

Despite Government initiatives to boost the life of town centres, almost one in seven high street stores are empty as increasing numbers of shoppers head for out-of-town retail parks.

Town hall chiefs call today for an overhaul of the business rate system in an attempt to take the pressure off struggling small business.

They say that popular retailers which conduct most of their trade on the high street rather than online are unfairly penalised by the current tax system.

The Local Government Association (LGA) calls for English councils to be given full freedom to set business rates to reflect their local areas rather than operating to a formula fixed in Whitehall.

Under the plans, business rate charges would be cut for the kind of retailers which residents wanted in their high streets and new businesses could be paid start-up leases.

The LGA also favours the extra revenue collected through the charge being retained by town halls so they spend the money most effectively in their communities.

David Sparks, its chairman, said: “We need a system of local business taxation which is fit for the 21st century, which support the areas in which companies operate and which helps, rather than hinders, business and the growth of our economy.

“The current system is failing to do that. Councils can’t support their local businesses as much as they would like to. There are many areas in which local authorities have been successful in helping new firms to open and keep small businesses alive, but in reality we are working with one hand tied behind our backs.”