What the commentators said

“Shock, horror and outrage.” That has been the press response to the revelation that business rates for Amazon will dip as those for high-street retailers climb, said Tim Worstall on Capx. But why all the bleating? It may be an imperfect form of tax but at least it reflects the inexorable law of supply and demand. “The reason land in Oxford Street is expensive is that there’s not that much there.” And if high rents persuade businesses to “sell out of a shed in Burnley” rather than central London, we all profit: lower costs are passed on to the consumer. In any case, as Javid says, there’ll be more winners than losers, said Philip Aldrick in The Times. Business rates will fall for 920,000 companies, stay unchanged for 420,000, and rise for 510,000. As usual “a vocal minority”, using the media as foghorn, has “drowned out a silent majority”.

But what can’t be denied, said Jim Armitage in the London Evening Standard, is that we’re stuck with a tax that penalises success. London is the economy’s powerhouse, yet owing to its steeply rising property values, it will suffer most if the hikes go ahead. And if we persist in levying the highest property taxes of any major developed country, companies will think twice about expanding here, while overseas investors, the very people we’ll need most in a post-brexit world, will stay away. London also faces the prospect of a “species wipeout” of its small private businesses, said Jeanette Winterson in the FT. I know this from bitter experience. For 13 years I’ve owned a small deli in Spitalfields that has become an “icon for tourists and neighbours alike”. It’s made “no big profits, but we paid our way”. Now, faced with a spike in business rates that reflects the leap in local property prices, we must close. Like so many others, we’ve been bashed by a tax based on neither profit nor turnover. There are no easy alternatives to a tax that raises £28bn a year, said Nils Pratley in The Guardian. But unless Philip Hammond can come up with a better system, the resentments and distortions will continue to grow.