Rating changes threaten port

Leaders in the maritime industry on Merseyside are warning that changes to the business rating system for ports means that firms with a turnover of £400 million could go under.

The Mersey is just one of 55 UK ports affected by the radical change in legislation.

Nationally business leaders are predicting the potential loss of businesses worth up to £20 billion with job job losses in excess of 150,000.

The predictions come from the Mersey Dock Rating Group, a campaign group set up to lobby for a change to the legislation.

The group represents 70 local businesses affected by the new system, which replaces traditional 'prescriptive' rating for premises in docks and harbours.

This originated from the status of docks as nationalised industries and required only the port authority to pay rates. Until now, rates have been based on collective turnover at each port and a rating element was included in the rent paid by businesses.

Undder the new scheme port businesses will be responsible for paying business rates directly.

The Valuation Office Agency (VOA), which is part of HM Revenue and Customs, began the revaluation of the UK’s ports in May 2006, and due to the length of time taken to introduce the new system, current bills are being backdated to 2005, meaning that some businesses can expect increases of as much as 250 percent.

Merseyside’s maritime businesses are now steeling themselves for the arrival of new rates demands from their local councils over the next few weeks.

In the port of Hull, where demands have already been issued, the combined annual rates bill has risen from £3 million to £20 million, including backdating and companies are predicting closures, job losses and reductions in investment.

The Mersey Dock Rating Group, made up of local businesses along with the Liverpool Chamber of Commerce and industry group, Mersey Maritime, says that businesses have been stunned by the prospect of backdated charges, when previous years’ rates have already been paid in port dues.

David Pendleton, business development director at Mersey Maritime, said: "This move is a very real threat at a time when Merseyside’s maritime sector is undergoing a significant revival.

"The industry is worth £2.6 billion to our local economy and employs 26,000 people, and exciting plans are underway to invest £multi-millions in new infrastructure and facilities.

"While everyone understands the need to pay fair rates, we are appealing to the Government to withdraw the requirement for backdated bills, which could devastate many smaller operators."

Kieran Hall, managing director of Birkenhead-based Denholm Handling, said: "We have been trading here for 20 years and at this site we turn over £2 million and employ 22 people.

"Not only that, but our wider business provides £2 million haulage income to subcontractors and we spend £300,000 a year on local hired labour.

"We are just one of 70 businesses affected, which shows the potential ripple effect on the local economy from these demands. I have spoken to several established companies which believe they may have no option but to close."

Ken Kirk is managing director of port operations company, Stanton Grove, which turns over £7 million and employs 50 people at Seaforth. He said: "The delay by the VOA in implementing these plans means that some businesses are likely to receive rates demands that are higher than their annual turnover.

"There is no reasonable way that people could plan for these retrospective bills and they should be scrapped. As well as the threat to businesses, this could drive investment away from the port and from Merseyside."

The Mersey Dock Rating Group has been given the support of Transport Select Committee chairman and local Liverpool Riverside MP, Louise Ellman, who has condemned the backdated rates demands as "grossly unfair" and said: "I hope we can see some common sense applied here. This is an important issue and the consequences could be devastating."

The group has also appealed to local authorities to avoid issuing new rates bills until the situation has been addressed, as once bills are received, company directors may be forced to close down rather than trade insolvently.

Liverpool City Council deputy leader, Flo Clucas, has agreed to work with the group and other Merseyside local authorities to address the issue.

According to David Pendleton, the group also wants to find out why consultation with the affected businesses has not taken place on the issue.

He said: "While all UK ports are affected, the situation in Scotland is much better because consultation by the Scottish Executive identified the potential problems for ratepayers and plans for a self-financing transitional scheme were put forward.

"This did not happen in England and Wales, where port businesses are now reeling from the consequences."