Hackney’s economy ‘at risk of stagnation’ over rates hike, council warns

Hanging on: traders on Chatsworth Road could face an uncertain future. Photograph: Kriss Lee

Hackney Council has issued a stark warning to the Treasury about the impact of rising business rates on the borough’s economy.

In a letter to Chancellor Philip Hammond, Town Hall business chief Cllr Guy Nicholson urged the government to delay next April’s planned rates hike until Brexit negotiations are complete.

Hackney faces the biggest surge in rates across Britain because of the growth in popularity of areas such as Shoreditch and Dalston since 2010, when rates were last reevaluated.

Cllr Nicholson fears the rises will put local industry “at risk of sliding into stagnation, forcing relocation instead of expansion, and replacing job creation and thriving business clusters with unemployment and empty buildings”.

Fears: Cllr Guy Nicholson has urged the government to delay next April’s planned business rates hike

Hackney is home to a swathe of creative and traditional businesses, including the famous Tech City cluster, but Cllr Nicholson said their futures are being “seriously undermined”. He wrote: “Alongside the increased rates is the current economic uncertainty surrounding Britain’s exit from the EU, already making planning for the future difficult for many businesses.”

The council estimates that next year’s increase means over 370 local businesses will be hit with extra costs totalling between £10,000 and £100,000 each.

Damian Patchell of Chatsworth Road Traders and Residents Association (CRTRA) echoed the council’s fears, saying: “Whilst we believe that everyone should pay their way, the rise in rates could be devastating to Chatsworth Road. Businesses have experienced rent increases of more than double in just the last two years.

“Rents have been inflated due to the large increases in residential purchases and rental prices, and they bear no resemblance to the sales the businesses are making. For a similar increase in rates to happen I fear for the businesses on our High Street – without a doubt some of the longer-established ones which are just hanging on will not survive.

“I hope the government sees sense as I am sure it would not want to be seen as the catalyst for local businesses closing.”

The Town Hall also voiced concerns for the public sector. With the council being forced to fork out more money on business rates for schools, Nicholson said there is “less to spend on pupils, improvements and day-to-day costs”.

“At a time of unprecedented cuts to local government funding, these extra costs put further pressure on our public services,” he warned.