Heathrow and big stores ‘could fund bail-out on rates for smaller firms’
A PLAN to axe a £10 million business rates cut for Heathrow Airport to fund a bail-out for small shops in London is being considered by the Chancellor.
Superstores operated by major chains such as Tesco would also lose planned rate cuts, releasing another £200 million to cushion small firms that face crippling increases.
The “rob Peter to pay Paul” idea is seen as a fiscally neutral solution that may be unveiled in March 8’s Budget.
Philip Hammond, the Chancellor, has warned MPs that any business rate relief for small firms will have to come from cuts elsewhere, saying: “There is no pot of money under my desk.”
Witnesses said he “showed keen interest” when figures for how much could be raised by targeting large business sites were put to him during a private meeting with Tory backbenchers.
Heathrow, London’s premier airport, attracts the biggest business rate bill in the country — £128 million this year.
It is currently set to gain £10.5 million per year in the phased shake-up of business rates, say ratings experts CVS. Gatwick airport, which pays £30 million in rates, is also due to make savings.
A total of 2,196 superstores across England and Wales are set to save £199.68 million from combined bills of more than £3 billion.
During Monday night’s pre-Budget meeting, Croydon South MP Chris Philp argued that there would be less political pain from cancelling savings for Heathrow and superstores than from going ahead with big percentage rises on smaller firms. One MP there said: “Philip showed keen interest when Chris set out the technical points.”
Traditional retailers are also angry that internet firms such as Amazon will gain from the shake-up.
Labour today expressed “shock” over revelations in the Standard of Government figures showing some London boroughs facing massive rises compared with the rest of the country.
In a letter to the Chancellor, Feltham and Heston MP Seema Malhotra wrote: “I am also shocked to learn from media reports that the Government has selectively released data. I hope you will now confirm that all data you have sent out will be put in the public domain.”
Figures sent to Tory MPs showed that firms in Islington will pay 30.7 per cent more on average.
Other percentage rises include Hackney 31.7, Lewisham 22.6, Hammersmith & Fulham 22.8, Lambeth 21.8, Hounslow 12.4 and City of London 17.3.