Forty-five Conservative MPs from constituencies in the North of England have urged the chancellor to cut business rates in England to help “save the High Streets”.
Writing to the chancellor ahead of the Budget, the MPs said the tax should be cut from 50% of market rent to 35%.
Rishi Sunak has promised to offer businesses support while Covid restrictions remain in place.
However Labour is set to criticise his approach to the pandemic.
In a pre-Budget speech, the shadow chancellor Anneliese Dodds will also argue that the pandemic has exposed “the weaknesses of 10 years of Conservative mismanagement of our economy”.
On Wednesday, Mr Sunak will use the Budget to set out the government’s tax and spending plans following a year of financial disturbance and high government borrowing brought on by the coronavirus pandemic.
He is facing pressure from some – including the former Conservative Chancellor Ken Clarke – to raise taxes in order to repair public finances.
However, others have argued that taxes could hinder the country’s recovery from Covid.
And now a group of MPs from the chancellor’s own party – known as the Northern Research Group – have urged him to cut the tax paid by shops.
The tax is calculated based on the value of the shop’s property. As part of emergency pandemic measures introduced last year, the government brought in a business rates holiday, but this is currently due to end in April.
‘Bricks and mortar’
In a letter to Mr Sunak, the MPs – many of whom represent traditional Labour seats won by the Conservatives at the last election – argue that the burden of business rates is falling on areas most in need of support.
They say cutting the tax, when it is reintroduced, would “ensure retailers have the confidence to invest in their bricks and mortar stores and save High Streets across the country”.
Although they acknowledge that the business rates holiday “undoubtedly saved hundreds of retail businesses”, they also call for “longer-term fundamental reform” to help High Street shops compete against online retailers.
On Sunday, the government announced a £5bn grant scheme to help High Street shops and hospitality reopen as the lockdown is eased.
Asked about introducing a sales tax to target online retailers such as Amazon, Mr Sunak said he was trying to reach an international agreement with other countries “on how to tax these large multinational digital companies properly”.
Meanwhile Labour’s shadow chancellor Anneliese Dodds will make a speech arguing that a decade of “Conservative mismanagement of the economy” and “12 months of irresponsible decision making” from the chancellor has financially damaged the country.
In a speech to Bloomberg in London, Ms Dodds will accuse her counterpart Mr Sunak of implementing “a triple hammer blow of council tax rises, social security cuts and pay freezes”.
She will call on the government to extend Covid support measures including the furlough scheme, the business rates holiday, the reduced rate of VAT and the £500 payment for those self-isolating.
The shadow chancellor is also expected to attack the government for wasting money citing “£22bn spent on the Test and Trace system, £150m spent on unsafe PPE and £2bn on contracts to businesses with clear links to the Conservative party, with no tender at all”.
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She will say that a Labour government would bring forward £30bn of planned investment “to support the creation of 400,000 new green jobs” and would support 100,000 new businesses by expanding start-up loans.
Speaking to the BBC’s Andrew Marr on Sunday, Mr Sunak said he had responded to the pandemic “generously and comprehensively”.
“We went big, we went early and there’s more to come,” he said.
“My priority is to keep supporting British families, businesses and people through this crisis – I said at the beginning I would do whatever it took to do exactly that and I remain committed to that and you’ll see more of that in the Budget.”