Business rates should be axed for good, Cabinet colleagues tell Chancellor
CHANCELLOR Rishi Sunak has been warned by ministers that it will be “politically impossible” to reimpose business rates after the coronavirus crisis.
Shops, pubs, restaurants and many leisure and entertainment businesses have been given a business rates holiday until next April as part of the £300billion coronavirus relief package.
But now ministers are warning the Chancellor that he cannot simply reimpose the tax, which even before the crisis was putting thousands of retailers at risk.
It is understood there is a push to permanently scrap business rates coming from both Alok Sharma’s business department and Robert Jenrick’s communities department because of a real concern for the long-term future of high streets.
A number of Tory MPS, led by former cabinet minister Esther Mcvey and her Blue Collar Conservatism Movement, want business rates scrapped and replaced with a fairer tax.
One minister told the Sunday Express: “We cannot reintroduce business rates. The trouble is once you take them away people get used to operating without them, and then if you reintroduce them it feels like a massive tax rise.
“It will be deeply unpopular and could put many people out of business.”
There have been concerns that business rates are outdated and unfairly punish high street shops while online companies such as Amazon do not have to pay them.
The demand to abolish business rates also came up in a snap survey of rural pub landlords by the Countryside Alliance.
The survey suggested that one in 10 may have to close if there is another national lockdown, while 75 per cent believe it would significantly hurt their business.
More than a third also said the decision to force them to shut at 10pm instead of 11 was detrimental to their business.
Asked what they need to survive going forward, they asked for financial support, the ability to furlough staff and an end to business rates. One landlord in Dorset called for: “VAT rate extension, business rates extension, if a second lockdown then furlough extension.”
Meanwhile, Kate Nicholls, chief executive of UK Hospitality, warned that the new restrictions were “another hammer blow to a sector that had already suffered more than most”.
She was scathing of the 10pm closing time, which means restaurants lose their second sittings and halve their takings.
She said: “The additional restrictions do not seem to be justified and it is doubtful they will have a positive impact in combating the virus.
“Statistics from Public Health England show that just five per cent of Covid-19 cases can be linked to hospitality.
“Businesses have spent a huge amount of time and money training their staff and making their premises safe. Venues have diligently ensured that social distancing is carried out and have overwhelmingly complied with test-and-trace protocols.”
She insisted: “Hospitality is a safe and supervised place for socialising and there is little compelling evidence that an arbitrary curfew will have a dramatic effect on combating coronavirus.
“Despite lockdowns in Leicester, Manchester and other parts of the country, cases continued to rise. This suggests that hospitality isn’t the cause.”