Life is sucked out of small traders

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Published: 25th March 2010

The hike in business rates will squeeze small traders to breaking point as they struggle to make it through the downturn

• KILBURN Bookshop, on the High Road, has been open for 30 years, but in six days’ time it will close down forever.
Our neighbourhood will lose a valuable local amenity. The bookshop has been part of the community as well as an employer down the years.
The bookshop’s owner Steve Adams is deeply saddened.
He cites a number of reasons: roadworks on the High Road damaging trade; increases in rent; the internet and, crucially, the imminent rise in business rates paid by small traders in our neighbourhood.
I say “rise” in business rates. It’s actually a vast hike.
From April 1 small businesses across the borough will suffer an increase which I calculate will average more than 30 per cent.
For many this is the difference between survival and extinction.
The butcher on England’s Lane in Belsize Park tells me that the profit on the first £2,000 of meat he sells each week will be soaked up by his business rates alone.
He adds that if he had to pay rent the business simply wouldn’t be viable (luckily, he doesn’t have to pay rent – he owns the shop outright).
This story is repeated across our borough.
From Spaniard’s Inn in the north (increase 47.4 per cent) to West End Lane Cycles in West Hampstead (increase 94.8 per cent) to the Central Stationers in Camden High Street (increase 85.7 per cent) to Judd Books just  south of Euston Road (increase 68.4 per cent), our small traders are being hit.
Part of the reason for the huge increases is that the valuations behind them were done in 2007-2008, when the property market was at its peak.
Of course, things have changed a lot since them.
The government is hitting our small traders at the very worst time – as they struggle to make it through a downturn.
The hardest period for small business is actually the 12 to 24 months after the economy bottoms out, as credit and cash flow are hard to come by.
Ernst & Young recently reported that 150,000 small businesses across the United Kingdom are in trouble.
This business rate rise may endanger many of them.
Small traders employ millions of people, and are the pulsating heartbeat of the real economy.
They are also at the heart of communities. They know their customers personally. They help to preserve our fragile sense of community around Camden.
Queen’s Crescent in Gospel Oak, with its market, is a great example of this.
The government currently wastes a lot of money. For example,
I have calculated they could save £789million simply by using office space more efficiently in central government alone.
This is being all paid for by our local traders and by us as taxpayers. As the government sucks in more and more money, so the economic life is sucked out of small traders and taxpayers.
On Monday I was asked by a sage chronicler of Camden life: “So what would you do?”
Here are four ideas:
• First, the planned increase should be postponed for at least two years until the danger has passed.
Even then, the valuations should be adjusted to reflect actual market conditions – not 2007 peak valuations.
• Second, small business rate relief should be made automatic. At present, around half of  Camden’s businesses
do not even know to claim it.
• Third, local councils should be given power to fund rate reductions from their own resources if they want to help encourage trade.
• Finally, smaller businesses should be exempted from much of the regulation that adds cost and complexity. 
These simple ideas would help protect our small traders at this time of difficulty, and thereby help protect jobs and communities.
I doubt the government will listen.
April 1 will see our small traders hit at a time when they have been weakened by 18 months of recession.
This year April will indeed be the cruellest month. For Kilburn Bookshop it is sadly already too late.
• Chris Philp is a Camden Conservative councillor and is fighting Hampstead & Kilburn at the general election