Rural firms need more cash for their survival (From Worcester News)

Rural firms need more cash for their survival

11:00pm Wednesday 15th July 2009 in

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A WOULD-BE MP is backing calls for the Government to make more cash available to help rural firms hit by the recession.

Liberal Democrat candidate for West Worcestershire Richard Burt is backing calls from the Federation of Small Businesses (FSB) for the Treasury to make more funds available to local councils, so they can grant 100 per cent rate relief to some small firms for a fixed period of just 12 months.

Village businesses such as shops and pubs are currently allowed up to 50 per cent relief on their business rates under a Rural Rate Relief scheme, which also gives local councils discretionary powers to grant up to 100 per cent business rate relief.

But, according to the FSB, 47 per cent are currently missing out, which could mean the difference between survival and closure.

Mr Burt, who raised the issue with Malvern Hills District Council on behalf of village businesses earlier this year, said that in many cases the council was relying on a top-up contribution from parish councils, which means that in some cases rural business owners were having their business affairs scrutinised by parish councillors who were often their own customers.

He said that he would write to the Chancellor Alistair Darling to back the call for a short-term increase in funds to help the rural businesses survive.

Mr Burt said: “It clearly isn’t right that rural rate relief should rely in part on parish contributions.

“Business owners I have spoken to feel it is an invasion of privacy to have their business affairs considered by parish councillors in order to qualify for additional relief.

“A time-limited cash injection by the Treasury to local authorities would remove the need for this and give rural businesses a better chance to survive until the economy picks up.

“Without government support, even more village shops and businesses Worcestershire will go to the wall.”

The village shop network is losing between 300 and 500 shops each year, while 13 rural pubs close each week around the country.

Linda Walton, the FSB’s rural affairs and tourism chairman, said: “Every week we hear of the death of village shops and pubs, yet the rural rate relief scheme, which was specifically set up to help these rural businesses, is being chronically under-used.

She said: “Village shops and pubs are at the heart of village life and the failure of such a business can devastate the local communities.”