Thursday, 23 February 2017

None so blind as those who think we can't see the wood for the trees etc.

The director of a London landlord writes in City AM:

Ultimately, business rates are a property tax rather than a corporate one, and for some companies this means that there is a relatively straightforward solution: move location. Businesses currently located in areas from Victoria to King’s Cross will be considering their options. Most worryingly for the locations worst hit by rates rises, the most desirable and influential businesses are also often the most mobile.

East London has undergone fundamental change over the last 10 years. In 2008 the Crossrail Bill received Royal Assent and construction started on Europe’s largest infrastructure project that would shift London’s economy East. That same year, the first iPhone was launched, a watershed moment in the fourth industrial revolution which would firmly take hold in East London with the “launch” of Tech City in 2010. All this before the Olympic Games put East London at the centre of the world for a month in 2012.

Shoreditch, Old Street and Clerkenwell are unrecognisable from 2008. Tech and creative businesses arrived in the area due to its affordability and stayed because of the community of businesses, cafés, shops and the nightlife that sprung up around them. Rents increased incrementally, but a tech and creative cluster endured as businesses recognised the value of collaboration with their peers.

However, from 1 April 2017, rates will increase overnight to reflect seven years of economic development in East London. When added to the associated rental increases, this will be too much for many businesses to bear. Smaller, entrepreneurial firms in particular may decide their growth prospects are better in a cheaper location...

Successful regeneration projects such as King’s Cross and Victoria take years to deliver, and the painstaking process of creating new spaces, attracting businesses and growing rental values will be undermined by the sudden sharp increase in business rates.

6 comments:

Mike W said...

Good find Mark,

I have to say I like the clarity of his first sentence.

I might annotate that document with fluro pen as he shamelessly lists the wealth created by business and public sector too, and hand out at our next group discussion up here. See if they (Lefties) get your point.

'None so Blind' yes, Really brings home his brasen, conclusion on who should reap these rewards (wealth.)

I hacked into his computer at City AM and can confirm he had deleted the following as his final conclusion: 'All so perfectly natural dont't you know? Social order: I painted the property interiors magnolia: I am the master.'

I might use this too from Carol Wilcox:

Sir, Your editorial “Robot tax, odd as it sounds, has some logic”
(February 21), regarding the possibility of taxing robots to preserve
jobs, calls to mind Henry George’s Progress and Poverty.

Writing in 1879, George noted that if labour-saving technology reached
perfection, labourers would get nothing and capitalists would get
nothing; all production would go to the owners of land, as land would
still be needed despite automation.

Rather than proposing to tax robots, the great economist advocated a
single tax on the value of land. If we should ever achieve complete
automation, this would enable people to be supported out of citizens’
dividends.

Short of complete automation, land value taxation still has important
advantages, such as letting people keep what they earn by their own
efforts, and putting the burden of taxes on those who enjoy the
privilege of holding land that they did nothing to create. It would also
help make housing affordable, and prevent the speculative bubbles in
land prices that currently contribute to the boom and bust cycle.

Nicholas D Rosen

Arlington, VA, US

So focus on issues they will have heard about in the last two weeks.

Lola said...

You have to larf (or you'd cry).

Dinero said...

He goes on later in the article to call Business rates anti meritocratic , Quote -

"The government is effectively punishing areas that we have grown to love. Is this anti-meritocratic system one which we are comfortable supporting or do we need a fresh approach?"

Mike W said...

Dinero,

He is obviously dyslexic. On his keyboard, and in his mind, he was no doubt just typing: 'Anti Aristocratic'. Simple, random error.

Mark Wadsworth said...

MW an L, agreed.

Din, good quote.

MW, I think he meant to type "landlords are punishing areas etc".

Bayard said...

I can only suppose he thinks that business rates are an arbitrary tax based on nothing but a bureaucrat's whim.