A SCHEME which cuts business rates by a massive 80 per cent is being monitored by council bosses in South Tyneside.
As a debate rages over the best way to revive the nation’s struggling high streets, King Street in South Shields has seen a number of big-name casualties, notably Marks and Spencer and Mothercare.
Town and city centres are feeling the pressure of competition from out-of-town retail centres and online shopping.
Many traders in King Street have also cited high business rates as one of the main reasons they are struggling.
Pioneering Rochdale Council has taken radical action to revitalise its local retail sector.
Businesses moving into empty shops are to get an 80 per cent discount on their business rates for the first year, and a 50 per cent cut in the second year.
A spokesman for South Tyneside Council indicated that the local authority would monitor the scheme to see if it had a “positive effect”.
The Gazette has also joined the debate.
More than 5,000 people signed our parent company Johnston Press’s nationwide petition calling on George Osborne to carry out an urgent review of the entire business ratings system and freeze the rate while a review was conducted.
The Chancellor boosted business everywhere when he made an announcement on rates during his recent Autumn Statement.
Although the rate has not been frozen, small retail businesses have seen the amount of discount they are entitled to rise 50 per cent to £1,500, which is seen as a boost to many small independent shops.
The spokesman for South Tyneside Council said: “Councils across the country will be keeping a watchful eye on Rochdale to see if subsidising business rates has a positive effect on the High Street.
“Clearly, with crippling cuts from central government, not all councils are in a financial position to take such action and we must see evidence that these measures can be sustained in the longer term.
“What we must do is create the right infrastructure for growth in South Tyneside and that is exactly why we are undertaking the biggest regeneration programme the borough has ever seen in order to breathe new life into our town centres.”
“He added: “The announcement of a business rates review and additional package of measures to boost bank lending to small and medium-sized businesses in the Autumn Statement is welcomed and goes some way to helping local business. We await further announcements from central government on the proposed review of business rates which is long overdue.”