Merseyside's maritime revival could be sunk by swingeing business rate rises, port companies said yesterday as they braced themselves for bills expected to be triple last year's levels.

The government's revamp of the rates system for ports could put dozens of businesses into insolvency, threatening 3,000 direct jobs and thousands more in hired labour, said the Mersey Dock rating group, a campaign group of 70 companies fighting to reform the law.

Until now, the port authority has been responsible for paying business rates, based on port turnover, and collected them as part of the rent charged to leaseholders, a legacy of nationalisation. In 2003, the government announced a nationwide change to the rules, switching to a direct levy as in the rest of the economy.

But because the valuation process has taken so long, companies such as freight forwarders and repair yards are now being asked for three years' rates in one go.

Fortress, which handles timber in Tilbury, Essex, went into administration this month after receiving a court order to pay a £2.4m bill, costing 20 jobs.

In Hull, one of the largest ports, the bill has risen from £3m to £20m this year. The city council, which collects business rates, has agreed to hold off in the hope of a government U-turn.

At the 55 ports affected, business leaders are predicting the potential loss of businesses worth up to £20bn and up to 150,000 job losses.

Louise Ellman, MP for Liverpool Riverside and chairman of the transport committee, said: "This backdating is just unfair. Maritime industry has been a success story here and we do not need a blow like this."

The Mersey ports, which almost shut in the 1980s as trade left for the east coast, have begun to turn the corner. After more than £350m of private investment, cargo volumes hit 32m tonnes last year, up from 9m in 1984.

David Pendleton, business development director at Mersey Maritime, which represents the local industry, said: "The industry is worth £2.6bn to our local economy and employs 26,000 people, and exciting plans are under way to invest . . . 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 £2m and employ 22 people. Not only that, but our wider business provides £2m haulage income to subcontractors and we spend £300,000 a year on local hired labour."

Liverpool city council has agreed to talk to the group about possible solutions to the big bills, which are to be sent out within weeks.

PD Ports Ltd, which leases the Hull Container Terminal from Associated British Ports, said it was facing an increase totalling "hundreds of thousands of pounds".

Martyn Pellew, PD Ports' group development director, said: "This increase affects the profitability of the terminal." There was a "strong possibility" that extra costs might have to be borne by consumers.

He said the assessment was under appeal but conceded that companies had had notice of the change.

The Department for Communities and Local Government said it had changed the rules to bring the sector into line with others. "We would encourage port operators to contact the Valuation Office Agency if they have any queries," it said,

The VOA, which calculates property values, said the legislation required it to backdate bills to April 1 2005 and that operators had been told in 2006.

Mr Pendleton said ministers should look to the Scottish Executive, which was planning a self-financing transitional scheme to help companies adjust.


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