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Tory MPs demand permanent business rates cut to help firms emerge from ‘cold store’

Written by on 01/03/2021

A group of 45 Conservative MPs from “Red Wall” seats have called for a permanent reduction in business rates to help firms come out of “cold store” after the coronavirus crisis.

In a letter to Chancellor Rishi Sunak ahead of Wednesday’s Budget, MPs from the Northern Research Group (NRG) have demanded a “bold move” to support shops and high streets up and down the country.

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Business rates are paid on the use of a building for non-domestic purposes.

At last year’s Budget, Mr Sunak announced a 12-month suspension of business rates to help firms affected by COVID lockdown restrictions.

But he is now under pressure to make that assistance permanent – although the Treasury has said it won’t publish the results of a fundamental review of business rates until the autumn, when there is more economic certainty.

Rossendale and Darwen MP Jake Berry, the chair of the NRG, highlighted how large parts of the north of England have been “subject to some form of lockdown almost continually for a year” due to the pandemic.

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“It’s been a very difficult time for the entire country, but where businesses have been in cold store for 12 months, it’s really hard to get them going again,” he told Sky News.

“That’s why we call for a permanent reduction in business rates. It’s a pernicious, fixed tax on doing business and something in a modern economy we should be able to do so much better.

“There’s got to be a way of capturing the way of the online economy, rather than just looking to tax bricks and mortar.”

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Sunak pushed over possible pre-election tax cuts

On Sunday, Mr Sunak hinted at an extension to the furlough scheme, with COVID restrictions set to continue for many more weeks.

But the chancellor also warned of the need to “level” with the public about the economic cost of the pandemic.

“We don’t want to see the rug whipped on COVID support,” Mr Berry added. “The north of England has been more affected – being in lockdown and having a higher infection rate than any other part of the country.”

Mr Berry, whose cohort of “Red Wall” colleagues refer to many Tory MPs who hold what were once traditionally safe Labour seats, continued: “Now is not the time to be removing any of the COVID support measures because we are still of the depths of this crisis.”

Meanwhile, other Tory MPs have warned Mr Sunak against introducing tax rises at Wednesday’s Budget.

Former Brexit secretary David Davis told The Daily Telegraph: “If they increase the tax burden, it would be very difficult for me to vote for it.”

And Robert Halfon, the chair of the House of Commons education committee, said: “Tax millionaires, but not millions of ordinary folk.”

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Former Conservative leader Sir Iain Duncan Smith said that freezing income tax thresholds, a move Mr Sunak is reported to be considering to raise £6bn, would be a “mistake”.

“You will end up dragging more people like teachers and senior nurses into a 40p rate that was originally meant for the rich,” he told the Daily Mail.

In a speech on Monday, Labour’s shadow chancellor Anneliese Dodds warned Mr Sunak not to deliver a “triple hammer blow of council tax rises, social security cuts and pay freezes”.

A report from the Treasury select committee has acknowledged that the public finances are on an “unsustainable” path in the long term, but argued it was too soon to enact a significant squeeze in this week’s Budget.

 Sky News

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