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Businesses 'in the dark' over promised rates relief

Shadow chancellor John McDonnell has accused the Tories of causing distress and leaving people in the dark after failing to roll out a compensation package for businesses hit by rates rises.

Chancellor Philip Hammond outlined a raft of measures in March's Budget to ease the burden of controversial business rates rises, amounting to a giveaway of £435 million over the next five years.

But David Gauke, Chief Secretary to the Treasury, came under fire at a small business hustings for the lack of progress in putting the measures into practice.

Liberal Democrat Treasury spokeswoman Baroness Kramer told Mr Gauke nobody had heard about the compensation package promised by the Tories before the election.

Mr McDonnell said: "A lot of businesses were waiting for the relief package to come into place, the guidance has only just come out and the local councils have said 'we're operating completely in the dark'.

"They couldn't then bring in the relief quickly enough, because the guidance wasn't there.

"I tell you, it's caused a lot of distress for people and I don't think we should ever let that happen again."

Mr Gauke told the event, organised by the Federation of Small Businesses and the Association of Convenience Stores, that the Government is trying to introduce the relief measures as quickly as possible.

"There is a big compensation package - £430 million, which is not something that has ever happened before on that scale, as I understand it, with the re-evaluation - to help those who are seeing significant increases," Mr Gauke said.

Under the plans, councils would get a £300 million fund to "deliver discretionary relief" in local areas.

Most pubs were offered a £1,000 discount off their bills, while tenants who were set to lose small business rate relief would see their bills increase by no more than £50 a month.

All three panellists agreed on the need to reform the business rates system, with Mr Gauke backing more regular revaluations of business premises.

"I think the five years or seven years we just saw does create those sudden jumps," he said.

Both Mr Gauke and Mr McDonnell also said the system needs reviewing in terms of what high street retailers pay compared to online outlets.

Mr McDonnell said the current system is "grotesquely unfair", while Mr Gauke added: "We do need to look at those internet retailers and find a better way of taxing them."

The shadow chancellor guaranteed Labour would not raise national insurance contributions for the self-employed.

Mr Gauke did not go as far, saying only that the Tories had dropped the plans it unveiled in March's Budget.

The minister added the Conservatives are waiting on the results of a wide ranging review by Matthew Taylor on workers' rights and self-employment.

Mr Gauke said: "You've got to strike that right balance to ensure that we encourage the self-employed, encourage entrepreneurs, protect our tax base, and also ensure that individuals aren't being exploited by people describing them as self-employed when in fact they are employed and it's just a way for people to get around their employment rights."

One convenience store owner in the audience was critical of Mr McDonnell, saying Labour's planned increase in corporation tax and the minimum wage, as well as his shop's recent business rates revaluation, would cost him £30,000 a year - forcing him out of business.

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