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| Version 2 | Version 3 |
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| Hammond under pressure to ditch ‘giant’ business rates rise | Hammond under pressure to ditch ‘giant’ business rates rise |
| (5 days later) | |
| Philip Hammond is under intense pressure from tens of thousands of UK companies to drop a planned 4% rise in business rates next year, amid warnings it would be a “tipping point” for the economy ahead of Brexit. | Philip Hammond is under intense pressure from tens of thousands of UK companies to drop a planned 4% rise in business rates next year, amid warnings it would be a “tipping point” for the economy ahead of Brexit. |
| The country’s leading business lobby groups, including the British Chambers of Commerce (BCC), Federation of Small Businesses and British Property Federation, have joined forces in an unprecedented campaign to tell Hammond that such a rise would seriously hit investment and confidence, and could mean more firms relocating abroad in the run-up to the UK leaving the EU in March 2019. | The country’s leading business lobby groups, including the British Chambers of Commerce (BCC), Federation of Small Businesses and British Property Federation, have joined forces in an unprecedented campaign to tell Hammond that such a rise would seriously hit investment and confidence, and could mean more firms relocating abroad in the run-up to the UK leaving the EU in March 2019. |
| Businesses are already complaining of a perfect storm of increasing costs caused by a higher national living wage, pension auto-enrolment and the new apprenticeship levy, as well as higher import costs for many. The campaign over business rates is another headache for Hammond as he heads towards a hugely difficult autumn budget on 22 November. The business sector is applying unusual levels of highly coordinated pressure on the Treasury, according to senior sources in Whitehall. | Businesses are already complaining of a perfect storm of increasing costs caused by a higher national living wage, pension auto-enrolment and the new apprenticeship levy, as well as higher import costs for many. The campaign over business rates is another headache for Hammond as he heads towards a hugely difficult autumn budget on 22 November. The business sector is applying unusual levels of highly coordinated pressure on the Treasury, according to senior sources in Whitehall. |
| Hammond is also facing demands to help millions of low-earning families and needs to raise money to do so. He is expected to announce at least a partial lifting of the cap on annual pay rises for more than five million public sector workers. There are also strong calls from charities and others for him to end the freeze on in-work benefits, which is hitting millions of the poorest in society. | Hammond is also facing demands to help millions of low-earning families and needs to raise money to do so. He is expected to announce at least a partial lifting of the cap on annual pay rises for more than five million public sector workers. There are also strong calls from charities and others for him to end the freeze on in-work benefits, which is hitting millions of the poorest in society. |
| The demands from business to forgo a rise in business rates would limit his room for manoeuvre. Rates are due to rise by 3.9%, in line with inflation as measured by the retail price index, in April next year. | The demands from business to forgo a rise in business rates would limit his room for manoeuvre. Rates are due to rise by 3.9%, in line with inflation as measured by the retail price index, in April next year. |
| But Dr Adam Marshall, director general of the BCC, told the Observer such a move would be a disaster for many businesses: “Businesses across Britain already face huge, and growing upfront costs, so hammering them with a giant 4% rates rise from next April would add insult to injury. | But Dr Adam Marshall, director general of the BCC, told the Observer such a move would be a disaster for many businesses: “Businesses across Britain already face huge, and growing upfront costs, so hammering them with a giant 4% rates rise from next April would add insult to injury. |
| “Given the current climate of muted economic growth and Brexit uncertainty, the chancellor needs to act – and make it clear that he won’t use September’s inflation figures as the basis for business rates hikes next year. Better yet, he could abandon the uprating of rates for the next two years to incentivise investment and boost confidence. | “Given the current climate of muted economic growth and Brexit uncertainty, the chancellor needs to act – and make it clear that he won’t use September’s inflation figures as the basis for business rates hikes next year. Better yet, he could abandon the uprating of rates for the next two years to incentivise investment and boost confidence. |
| “Many companies are at a tipping point. They face mounting pressures from a combination of costs and taxes including rates, pensions auto-enrolment, the apprenticeship levy, insurance premium tax and the immigration skills charge, just to mention a few. These expenses stymie the ability of firms to invest, recruit and grow, which is exactly what ministers want business to be doing right now.” | “Many companies are at a tipping point. They face mounting pressures from a combination of costs and taxes including rates, pensions auto-enrolment, the apprenticeship levy, insurance premium tax and the immigration skills charge, just to mention a few. These expenses stymie the ability of firms to invest, recruit and grow, which is exactly what ministers want business to be doing right now.” |
| Melanie Leech, chief executive of the British Property Federation, said: “The current business rates system is fundamentally unfit for purpose. With September’s RPI confirmed at 3.9%, businesses are facing an additional £1.1bn tax bill from April next year. When the UK’s commercial property tax is far higher than elsewhere in Europe and across the OECD, it places British business at a distinct disadvantage. Government must put in place immediate measures to alleviate this damaging increase and show that Britain is open for business.” | Melanie Leech, chief executive of the British Property Federation, said: “The current business rates system is fundamentally unfit for purpose. With September’s RPI confirmed at 3.9%, businesses are facing an additional £1.1bn tax bill from April next year. When the UK’s commercial property tax is far higher than elsewhere in Europe and across the OECD, it places British business at a distinct disadvantage. Government must put in place immediate measures to alleviate this damaging increase and show that Britain is open for business.” |
| Mike Cherry, the national chairman of the Federation of Small Businesses, said: “The budget is the chancellor’s opportunity to show he is committed to reforming the regressive business rates system. That starts with putting an end to RPI-linked bill increases.” | Mike Cherry, the national chairman of the Federation of Small Businesses, said: “The budget is the chancellor’s opportunity to show he is committed to reforming the regressive business rates system. That starts with putting an end to RPI-linked bill increases.” |
| Last week Hammond announced that millions of self-employed workers were to miss out on a £148 reduction in national insurance by delaying the abolition of class 2 contributions next April until the following year. | Last week Hammond announced that millions of self-employed workers were to miss out on a £148 reduction in national insurance by delaying the abolition of class 2 contributions next April until the following year. |
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