Javid on the spot as relief package for firms unveiled
Chancellor is urged to help out after £10bn budget surplus
SAJID Javid is to face angry Tory MPs today as it emerged that ministers are looking at a package of relief for those hardest hit by the business rates review.
The Communities Secretary will make a Commons statement in which he will pledge help for businesses that face the biggest rises.
Ministers were last night understood to be looking at a package of relief, with Chancellor Philip Hammond coming under pressure to draw funds from an expected £10billion ‘windfall’ in the public finances. However, government sources dismissed suggestions that a relief fund for businesses would run into hundreds of millions of pounds.
The climbdown comes as it emerged that some Tory MPs are considering vot- ing against the Budget to express their anger at the business rates fiasco.
Backbenchers warned Mr Hammond on Monday night that they could take the extraordinary action if he did not come forward with proposals to mitigate the effect of rises on the hardest hit.
Anger against Mr Javid reached such a pitch that Theresa May’s spokesman was forced to insist that she has full confidence in him.
It also emerged last night that the Communities Secretary is facing a probe by Britain’s most senior civil servant over the misleading list his department sent to MPs at the weekend. The Liberal Democrats have asked Sir Jeremy Heywood, the Cabinet Secretary, to investigate why the list suggested rates would fall in 250 of the 329 local billing areas in England – when analysts believe the true figure was just 135.
Some Tory backbenchers are angry that the Communities Secretary had claimed in a ‘dodgy’ dossier sent to MPs at the weekend that small firms had been led by a ‘ relentless campaign of distortions and half-truths’.
Grant Shapps, the former Tory chairman, said: ‘ Being completely upfront about this would be far better than sending out a letter in a Trumpesque tone blaming the media for higher business rates. ‘MPs understand that there is still a deficit to deal with, but what they don’t like is receiving projections showing business rate reductions in their constituencies, only to discover that the bills being sent out next week will be higher.’
John Mann, a Labour member of the Treasury select committee, said: ‘Sajid Javid’s position is increasingly untenable. His job is to promote enterprise, not stifle it. He should fall on his sword after these revelations about his dodgy list.’ Tory MP Andrew Bridgen, who has led opposition to the business rates revaluation from the backbenches, said: ‘Colleagues expect information from ministers to be accurate. With regard to the verac- ity of the data on breakdown on increases and decreases in business rates – it would be fair to use the business vernacular and describe them as sharp practice.’
At least 500,000 businesses will face business rate hikes of up to 300 per cent as a result of the first revaluation of business rates in seven years. The review has angered business groups, who are now urging Mr Hammond to use an expected ‘windfall’ in the public finances to help small firms.
The Government recorded its highest January surplus for 17 years after it borrowed £9.4billion less than it spent – giving the Chancellor more money to spend ahead of next month’s Budget.
This was driven by a £4billion surge in tax receipts from businesses as the economy fared much better than predicted by the Treasury since the EU referendum in June last year. Business groups want the Chancellor to use the spare cash to help businesses facing punishing rates rises.
The Institute of Directors estimated it would cost the Exchequer around £500million to lift 200,000 small firms out of paying any rates altogether. Stephen Herring, its head of taxation, said: ‘These rate hikes are going push some shops out of business.
‘This will put the Exchequer out of pocket, because it would lose national insurance contributions, income tax and corporation tax. The Chancellor would be well advised to help these firms.’
The British Chambers of Commerce also called on the Chancellor to come to the aid of struggling small firms. Suren Thiru, its head of economics, said: ‘The Budget should tackle the increasing burden of up-front costs for businesses, including action on rates.
‘This will help firms deliver the type of job creation and growth needed to achieve a real strengthening of the UK’s tax base.’ Comment – Page 16