Belfast Telegraph

Home News UK

PM 'has full confidence in Communities Secretary' in business rates row

Theresa May has full confidence in Communities Secretary Sajid Javid, Downing Street said, as more Tory MPs waded into the row over business rates.

Mr Javid and Treasury Chief Secretary David Gauke have been accused of misleading party colleagues over the effect of a business rate revaluation which will leave more than a quarter of companies facing higher bills.

The Government has dismissed claims that they underestimated rate rises by 5-7% as "nonsense", but it has not stopped more Tory MPs criticising the system.

Former business minister Anna Soubry called for a fundamental rethink of the entire system, in which taxes are based on the rental value of a commercial property.

The Tory MP tweeted : "Business rates are unfair and should either be radically reformed or scrapped."

Her party colleague and Bath MP Ben Howlett criticised the Government's "London-centric" approach, arguing that his city should be offered help similar to the capital, where firms with a rateable value of up to £28,000 have their rate rises capped to 5%, compared with £20,000 elsewhere .

Posting on his website, Mr Howlett said: "London is not the only part of the country where property prices have risen extortionately in recent years.

"Why should small businesses in Bath be penalised for their part in a thriving economy when their counterparts in London receive significant additional support through a different small business rateable value threshold?"

Several other Tory MPs voiced concerns in recent days, prompting Mr Javid and Mr Gauke to send a private email to party colleagues, insisting that there had been "a relentless campaign of distortions and half-truths" about the revaluation.

They also attached a list revealing that many of the areas facing rate rises are in Tory heartlands, with the Home Counties in line for some of the biggest increases.

Mr Javid's Department for Communities and Local Government then dismissed reported claims by rating agent Gerald Eve that the list had underestimated rate rises by 5-7% as it did not take into account inflation or contingencies for appeals.

Asked on Tuesday if the Prime Minister continued to have full confidence in Mr Javid, a Number 10 spokesman told a regular Westminster media briefing: "Yes."

It came after Chancellor Philip Hammond assured Conservative MPs that he is listening to their concerns about the revaluation.

But he stopped short of committing himself to action in next month's spring Budget to soften the blow on affected firms.

Treasury sources indicated that the Chancellor was looking at a longer-term solution to level the playing field between the traditional high street shops and pubs hit hard by the revaluation and the internet giants whose out-of-town warehouses benefit from low rates.

At an 80-minute meeting of the Tory backbench 1922 Committee in Westminster, a series of MPs confronted Mr Hammond with examples of businesses in their constituencies facing steep rises due to the first revaluation of business rates since 2008.

With bills for the coming year due to go out over a five-week period starting on Friday, there is little time left for concessions from the Chancellor.

Mr Hammond raised the point that the development of the digital economy, which has seen a growing amount of commerce shift online, has created "challenges" for a form of taxation based on property rental values, said one source.

However, the Chancellor made clear that a solution to this issue would not be found overnight, raising the possibility that a more fundamental overhaul of the business rate system may be in the pipeline further in the future.

The Government insists that almost three quarters (73%) of businesses will see their rates reduced or stay the same after revaluation, with some 600,000 firms paying no business rates at all.

Mr Hammond stressed that the revaluation, which was set in motion under the previous administration of David Cameron, was the subject of a consultation exercise in which business organisations were involved.

Shadow business secretary Rebecca Long-Bailey called on the Chancellor to commit to transitional relief for businesses facing "astronomical" increases.

"The fantasy figures given to MPs about business rates increases by the previous business secretary (Mr Javid) show just how dismissive this Government is of the burdens on small businesses," the Labour frontbencher said.


From Belfast Telegraph