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Commentary: Fiscal neutrality happens when Government spending is covered almost exactly by tax revenue.


These two words didn’t leave the Chancellor’s mouth during his Autumn Statement yesterday, but they are there — in black and white — in the big green book that accompanied his speech.


Retailers — and those who represent them, such as the British Retail Consortium — have been calling for a review of business rates for some time.


Thanks to Mr Osborne, the wish has been granted.


Yesterday — in his speech — he said: “The government has repeatedly helped small businesses deal with the burden of business rates. We do so again today. We will double Small Business Rate Relief for yet another year. It benefits half a million firms, means a third of a million firms pay no rates and we’ll continue to fund it.


“I will also continue to cap the inflation-linked increase in business rates at 2 per cent. And I am announcing a full review of the structure of business rates, and I urge business groups to engage with us.”


And with that, he was done on the matter.


The devil is often in the detail, and those two key words — fiscally neutral — were there in the accompanying literature. The document said the review needed to be net neutral for the Government to meet its agreed financing of local authorities.


So, while this means change is on the way — some time in 2016 — it is too soon to say who will benefit. What we cannot expect is for every retailer in the country to get a tax cut and pay reduced business rates.


Some will, some won’t. Either way, the Government plans to raise as much cash from business rates post-review as it does now.


Historically, furniture retailers typically located themselves in three types of store location; on the high street, on an arterial road heading in or or out of urban areas, or on an edge-of-town retail park.


Ecommerce has changed that — with some retailers having either no showroom at all, or choosing to open in non-traditional retail spaces, such as industrial units, converted barns or — in some cases — the third floor of an old office building. Passing footfall has become less important, especially for those retailers for whom bricks merely reinforce the clicks.


Are they paying the same business rates as everyone else? Is that fair? Some would argue not, and you can expect that point of view to be aired in the months ahead.


Retailers have lobbied hard for change already, but the lobbying — in many respects — starts now for real. Not every retailer is going to win from Mr Osborne’s business rates review.



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