Javid in ‘betrayal’ storm after U-turn on business rates

THE Cabinet Minister at the centre of the storm over savage increases in business rates was accused of ‘betrayal’ last night after it emerged he previously backed calls for small firms to be spared ‘crushing’ charges.

Communities Secretary Sajid Javid is facing a growing Conservative revolt over the April rates rise, which will hit many small shops while bills fall for giant online retailers.

Furious MPs say shortly before Mr Javid entered Government he founded the influential Free Enterprise Group (FEG) of Tory MPs, which called for the ‘cripplingly high’ rates to be axed to stop high streets turning into boarded-up wastelands.

One of the group’s reports, which The Mail on Sunday understands was written by present International Development Secretary Priti Patel, demanded a radical overhaul of the system to spare small businesses such as the chain of corner shops once owned by her father.

Tory MPs are putting intense pressure on Chancellor Philip Hammond to perform a U-turn in next month’s Budget before business rates change for the first time in seven years as a new valuation based on property prices comes into effect.

In an attempt to take the sting out of the revolt, rebel MPs were privately told this weekend they would receive letters from Mr Javid’s department setting out the scale of the pro- posed rates rise in their constituencies. The aim is to persuade them that rates will not rise sharply outside the most expensive parts of the South.

The FEG, which also included current Culture Secretary Karen Bradley, Welsh Secretary Alun Cairns, Environment Secretary Andrea Leadsom and Cabinet Office Minister Ben Gummer, said the UK should follow the American example of driving down business rates.

The report, written in November 2013, said rate relief should be extended to ‘keep very small businesses from potentially crushing rates’.

It added: ‘Reducing business rates should be a priority because it will not only allow businesses to continue growing, but allow new businesses to start. Revaluating rental properties more frequently could… facilitate the growth of Britain’s high streets.’

One MP and former FEG member said: ‘The Cabinet is packed with Ministers who hold passionate free-market beliefs and think shop-owners who work 16hour days should not be allowed to go to the wall. Sajid used to be one of them. But they just sit there, mute. It’s a betrayal.’

Mr Javid, who grew up over his parents’ shop in Bristol, left a formal position on the FEG to become an aide to then Chancellor George Osborne shortly before the report was published.

A spokesman for the Federation of Small Businesses said: ‘The FEG made a series of policy ideas on this before the Election and we want to see that spirit of radical reform of business rates harnessed to save our high streets.’

A Government spokesman said: ‘Nearly three quarters of businesses will see no change, or even a fall, in their business rates bills. We’ve also introduced £3.6billion in support for companies affected by the revaluation – making the system accurate and fair for everyone.’

COMMUNITIES Minister Sajid Javid was last night under mounting pressure to reverse the Government’s business rates reforms after it emerged Wales had scrapped the most controversial features of the system.

The Welsh Government, which former Chancellor George Osborne granted powers to vary the new system, has said it regards the latest rules as an ‘England-only’ plan.

The split centres on the new appeals system for rates bills, known as Check Challenge Appeal (CCA), which critics have already warned will delay companies getting their bills corrected and may put many firms off complaining at all.

The Welsh Government has now said it will not impose the system being introduced in England in April and leading business advisers this weekend urged Westminster to follow its lead.

Mark Rigby, chief executive of business rates adviser CVS, said: ‘With some six weeks to go until the start of the next Rating List, we have growing concerns about the rates appeals system in England. I would urge the Government to follow the lead of the Welsh in abandoning the Check Challenge Appeal process.’

John Webber, head of ratings at property services company Colliers International, said: ‘People are looking at Check Challenge Appeal and they can see a car crash coming. I think the Welsh can see through the nightmare that will be CCA in its current form.

‘CCA is not there to help rate payers – it is there to help keep the money in the coffers of the local authorities, who are desperate for money, and prevent people from being incentivised to make an appeal even if they suspect a bill is wrong and they are being overcharged.’ Hundreds of thousands of firms will see sharp rises in their rates bills and a flood of potential appeals is expected.

A spokesman for the Welsh Government told The Mail on Sunday – which has been campaigning for an overhaul of business rates – that it regarded the new appeals system as an ‘England-only initiative’ and that its Local Government Minister, Mark Drakeford, was examining rules that could make its system ‘fair and reasonable’. The Welsh plans will further enrage businesses in England, where complaints about the system reached fever pitch last week.

A spokesman for the Department for Communities and Local Government said CCA would make the appeals system ‘easier’ for companies.

Business lawyers have claimed the new appeals system could even be illegal because it allows a margin of error in the assessment. They argue this means appeals will be thrown out even if the rates bill in question is wrong.

The row over the rates appeal system was exclusively revealed by The Mail on Sunday in November.