NDNA calls for business rate exemption for nurseries

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The National Day Nurseries Association is calling for all nurseries to be exempt from business rates, following Ed Miliband's pledge to lower them for small businesses.

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During his speech at the Labour Party’s annual conference in Brighton Mr Miliband said he would freeze business rates for millions of small firms if the party wins the next general election.

The rate reduction would arise from a shift in taxation that would see large corporations pay more, so that business rates for small premises could be cut.

The NDNA, which has long campaigned on the issue, welcomed the plan but urged Labour to go further, arguing that nurseries should be exempt from paying business rates altogether, because they provide a public service.

A recent NDNA business survey found that 53 per cent of respondents cited rising business rates as a threat to their sustainability.

The association said that nurseries like other small business worked to a tight budget and that rate rises during the recession had inevitably led to fee increases for parents.

Purnima Tanuku, chief executive of the NDNA, said, ‘The certainty of a freeze on these rates at a level which would affect a large proportion of nurseries would be a reassuring first step but for many the level of rates will still be too high.

‘We feel the proposals should go further. Nurseries provide a public service and we would like to see them exempt from business rates altogether.’

She added, ‘All three political parties have made promises to provide more free childcare places but the places are currently underfunded. These losses along with business rates push up the overheads. The only way nurseries can make up the shortfall is by raising the fees on hours paid for by parents.

‘While we are pleased to see steps being made to help small businesses we would like to see a pledge to give the childcare sector the financial support it really needs.’

The Federation of Small Businesses also welcomed the proposal, but added that a longterm solution would be reform of the Valuation Office Agency, because the system was no longer fit for purpose.

John Allan, national chairman, said, ‘We know that many firms are struggling to pay business rates and FSB research suggests seven per cent of members pay more in rates than rent – and that cannot be right. In addition many small businesses are being forced by local authorities to pay the rates when it is beyond their means.’

During the speech, Ed Miliband also said that a Labour Government would freeze gas and electricity bills from May 2015 to January 2017.

Alison Garnham, chief executive of the Child Poverty Action Group, said, ‘Action to cut energy bills for families is welcome. But we also need to think about the rising cost of other essentials, not least the cost of food and the numbers of families, including working families, needing support from food banks. If families are to keep up with bills, it means the value of essential support from tax credits and for jobseekers, disabled people and carers must keep up with rising prices.’

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