A group of major transport and infrastructure firms has called for urgent business rates reform at the Budget, warning that current tax levels are blocking investment needed to reverse Britain’s position at the bottom of the G7 investment league table.<\/p>\n
The UK’s total investment in Q2 represented less than 19% of GDP \u2014 nine percentage points lower than Japan, the best performing G7 country, according to Office for National Statistics (ONS) data.<\/p>\n
It is the fourth consecutive quarter the UK has ranked bottom of the G7, which also includes the United States, Canada, Germany, France and Italy.<\/p>\n
London Gatwick, Manchester Airports Group (MAG), Getlink, London St Pancras Highspeed, Eurostar and the Global Infrastructure Investor Association said in a joint statement: “Over the past 25 years, only Greece has a worse record on investment than the UK among major economies.<\/p>\n
“Throughout that time, ever-increasing taxes on asset-heavy, capital-intensive businesses have served as a major barrier to them investing in the exact type of infrastructure we need to solve our economic stagnation.”<\/p>\n
The firms said changes to the business rates system have seen bills increase by up to 400%, leaving them with effective tax rates of up to 77% in the worst cases.<\/p>\n
MAG \u2014 owner of Manchester, London Stansted and East Midlands airports \u2014 has paused \u00a3130m of investment from its five-year plan after its bill more than doubled at the last Budget.<\/p>\n
Getlink, owner of the Channel Tunnel, has seen its rateable value triple from \u00a340m to \u00a3118m and had to cancel plans to invest in the reopening of an international rail freight terminal in Barking.<\/p>\n
Britain’s weak performance reflects a 2.9% decrease in government investment in Q2, offsetting small increases in private sector investment in the quarter.<\/p>\n
The firms added: “Given the current fiscal position it is clear that the private sector will be essential in delivering the investment the UK needs and we stand ready to support this Prime Minister in delivering his vision.<\/p>\n
“That makes creating a fair and predictable business rates system – one that incentivises, rather than penalises, investment – an absolute imperative and something that must be addressed in the Budget.”<\/p>\n
A report from Oxford Economics showed the UK had missed out on nearly \u00a32 trillion of investment by not keeping pace with the OECD average for 25 years.<\/p>\n
The research found that households would have more than \u00a31,500 more in real disposable income if the UK can catch up with average rates of investment as a share of GDP by 2040.<\/p>\n","protected":false},"excerpt":{"rendered":"
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