This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/2017/feb/21/ministers-expected-to-take-steps-to-reduce-impact-of-business-rate-changes
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Ministers expected to soften impact of business rate changes | |
| (35 minutes later) | |
| Beleaguered cabinet ministers are expected to take steps to ameliorate the impact on the companies hardest hit by a shake-up in business rates that has fuelled a backlash among Conservative MPs. | Beleaguered cabinet ministers are expected to take steps to ameliorate the impact on the companies hardest hit by a shake-up in business rates that has fuelled a backlash among Conservative MPs. |
| Communities secretary Sajid Javid is likely to join the chancellor, Philip Hammond, in adopting a more empathetic tone about the anger triggered by the decision to revaluate the rates based on updated property prices. | Communities secretary Sajid Javid is likely to join the chancellor, Philip Hammond, in adopting a more empathetic tone about the anger triggered by the decision to revaluate the rates based on updated property prices. |
| The Guardian understands that Javid – who has been criticised for holidaying in Dubai at the height of the controversy – will face politicians in the chamber of the House of Commons on Wednesday where he is likely to promise to take action to soften its implementation . | The Guardian understands that Javid – who has been criticised for holidaying in Dubai at the height of the controversy – will face politicians in the chamber of the House of Commons on Wednesday where he is likely to promise to take action to soften its implementation . |
| Javid has discussed the issue with Hammond, and the chancellor is now likely to use the spring budget in March to lengthen the transitional period for companies which will face an increase in rates. | Javid has discussed the issue with Hammond, and the chancellor is now likely to use the spring budget in March to lengthen the transitional period for companies which will face an increase in rates. |
| There is also a suggestion that the government could agree to a wholesale review of the system, which levies the tax based on the size of property rather than a companies’ profits, in an attempt to stave off a backbench revolt. | There is also a suggestion that the government could agree to a wholesale review of the system, which levies the tax based on the size of property rather than a companies’ profits, in an attempt to stave off a backbench revolt. |
| Javid and Treasury chief secretary, David Gauke, had angered colleagues within their party after sending out a bullish letter that said the shake-up represented the “biggest ever cut in business rates”. | Javid and Treasury chief secretary, David Gauke, had angered colleagues within their party after sending out a bullish letter that said the shake-up represented the “biggest ever cut in business rates”. |
| Accusing the media of “distortions and half-truths”, they further infuriated MPs by attaching an analysis of the new rates that were later said to underestimate the impact by up to 7%. Tories said the pair had also exaggerated how many companies would benefit. | Accusing the media of “distortions and half-truths”, they further infuriated MPs by attaching an analysis of the new rates that were later said to underestimate the impact by up to 7%. Tories said the pair had also exaggerated how many companies would benefit. |
| Javid’s intervention will follow the chancellor Philip Hammond, who told Tory MPs he is in “listening mode” on Monday night. | Javid’s intervention will follow the chancellor Philip Hammond, who told Tory MPs he is in “listening mode” on Monday night. |
| In the longer term, ministers are likely to attempt to end a loophole that means highly profitable internet companies, such as Amazon, will benefit from cuts while small independent businesses are badly hit. | In the longer term, ministers are likely to attempt to end a loophole that means highly profitable internet companies, such as Amazon, will benefit from cuts while small independent businesses are badly hit. |
| One senior MP accused Javid and Gauke of adopting the attacking language of US president Donald Trump in their attempt to quell the backlash. Grant Shapps claimed that Javid was wrong to put a positive glow on the shake up of business rates. | One senior MP accused Javid and Gauke of adopting the attacking language of US president Donald Trump in their attempt to quell the backlash. Grant Shapps claimed that Javid was wrong to put a positive glow on the shake up of business rates. |
| “What Sajid needs to do is take control of his officials who are urging him to claim that most businesses will see lower bills. The reality is that this revaluation raises an extra £1bn in tax and that is why this is hurting,” he said. “Being completely upfront about this would be far better than sending out a letter in a Trumpesque tone blaming the media for higher business rates.” | “What Sajid needs to do is take control of his officials who are urging him to claim that most businesses will see lower bills. The reality is that this revaluation raises an extra £1bn in tax and that is why this is hurting,” he said. “Being completely upfront about this would be far better than sending out a letter in a Trumpesque tone blaming the media for higher business rates.” |
| There was sympathy among colleagues for the communities secretary, with some pointing out that he had faced most flack despite it being the Treasury that was in charge of setting business rates. One MP said Hammond now appeared to be “riding into the rescue”. | There was sympathy among colleagues for the communities secretary, with some pointing out that he had faced most flack despite it being the Treasury that was in charge of setting business rates. One MP said Hammond now appeared to be “riding into the rescue”. |
| Another added: “The gossip in tea room is the fact that Sajid is being hung out to dry but it is not his fault.” | Another added: “The gossip in tea room is the fact that Sajid is being hung out to dry but it is not his fault.” |
| A number of MPs have written to the chancellor and to Javid urging immediate action. Ben Howlett questioned the “increasingly London-centric nature of economic policy”, claiming some companies in his Bath constituency faced a 12.5% increase in the tax. | A number of MPs have written to the chancellor and to Javid urging immediate action. Ben Howlett questioned the “increasingly London-centric nature of economic policy”, claiming some companies in his Bath constituency faced a 12.5% increase in the tax. |
| Anna Soubry revealed that when she was business minister she had urged colleagues to reform the charge or even scrap it completely and raise the money via other means. | Anna Soubry revealed that when she was business minister she had urged colleagues to reform the charge or even scrap it completely and raise the money via other means. |
| “Business rates are not fair because you have to pay them whether you are making money or not, and they don’t represent your [profit], just what building you are in,” she said. “You could be running a multimillion pound business from relatively small building but pay the same as a shop of the same size employing three people with hugely smaller turnover.” | “Business rates are not fair because you have to pay them whether you are making money or not, and they don’t represent your [profit], just what building you are in,” she said. “You could be running a multimillion pound business from relatively small building but pay the same as a shop of the same size employing three people with hugely smaller turnover.” |
| Despite sources strongly suggesting that the government could take action to reduce anger on the party’s backbenches, the Conservative minister Marcus Jones told MPs there was no need for a review because one was carried out in 2015. | Despite sources strongly suggesting that the government could take action to reduce anger on the party’s backbenches, the Conservative minister Marcus Jones told MPs there was no need for a review because one was carried out in 2015. |
| “The clear view then, including from the business community, was that they wanted to retain the current system,” he said, during a debate about the local government bill. | “The clear view then, including from the business community, was that they wanted to retain the current system,” he said, during a debate about the local government bill. |
| The Labour and co-op MP Gareth Thomas, who was pushing the minister on the issue, said it was “hugely disappointing” that the government rejected calls for a review and accused ministers of having a “tin ear” when it came to concerns. He called for business rate relief for both schools and hospitals warning they were already under “severe financial pressure”. | The Labour and co-op MP Gareth Thomas, who was pushing the minister on the issue, said it was “hugely disappointing” that the government rejected calls for a review and accused ministers of having a “tin ear” when it came to concerns. He called for business rate relief for both schools and hospitals warning they were already under “severe financial pressure”. |
| His colleague, Bill Esterson, the shadow business minister, called for a “comprehensive overhaul” of the entire system. | His colleague, Bill Esterson, the shadow business minister, called for a “comprehensive overhaul” of the entire system. |
| The Lib Dems are also attacking the government over the controversy, and have picked out individual companies badly hit including the restaurant featured in the hit television programme, First Dates, which will face a 37% increase in rates – equivalent to almost £27,000. The iconic nightclub, Fabric, will see its bill rise by slightly more than that. | The Lib Dems are also attacking the government over the controversy, and have picked out individual companies badly hit including the restaurant featured in the hit television programme, First Dates, which will face a 37% increase in rates – equivalent to almost £27,000. The iconic nightclub, Fabric, will see its bill rise by slightly more than that. |
| Companies want to see the impact of the revaluation limited but also a change in the rules so that decisions to invest in the property – for example with new machinery – are not linked to a further rise in business rates. | Companies want to see the impact of the revaluation limited but also a change in the rules so that decisions to invest in the property – for example with new machinery – are not linked to a further rise in business rates. |
| Adam Marshall, director general of the British Chambers of Commerce, said it was “zapping productivity”. “One best things that could be done is to eliminate that perverse incentive,” he said, adding that ministers should also use the budget to “blunt the impact of the revaluation”. | Adam Marshall, director general of the British Chambers of Commerce, said it was “zapping productivity”. “One best things that could be done is to eliminate that perverse incentive,” he said, adding that ministers should also use the budget to “blunt the impact of the revaluation”. |
| Meanwhile the decision by government to release data about Conservative constituencies to MPs has angered Labour politicians. Seema Malhotra has written to Hammond to say she believes it was an abuse of official data and has written to the UK Statistics Authority about it. | Meanwhile the decision by government to release data about Conservative constituencies to MPs has angered Labour politicians. Seema Malhotra has written to Hammond to say she believes it was an abuse of official data and has written to the UK Statistics Authority about it. |