Conservative leadership candidates Rishi Sunak and Liz Truss have promised to discount business rates, cut taxes and clamp down on antisocial behaviour, should they become prime minister.
The ballot to elect the next Tory leader closes on 2 September, determining whether Truss or Sunak become England’s prime minister. Both candidates made a number of pledges over the past month, which would have a potential impact on independent retailers.
Business rates and high street rescue
Sunak pledged to extend the 50% discount introduced to business rates last year amid plans to rejuvenate failing high streets if he becomes prime minister. He also outlined plans to cut the number of Britain’s 58,000 empty shops by 2025 through consultations with local authorities.
However, the pledge was met with scepticism by experts. Former Booker and Iceland boss Bill Grimsey, who has published several reviews on reforming the high street, told betterRetailing: “Discounting business rates is not the answer as they need to be abolished entirely. The system isn’t fair, and small independent retailers are hit the worst. That’s why so many on high streets have closed down.”
Grimsey has previously suggested that a suitable replacement for business rates would be a 2% sales tax, claiming it would be more proportionate on small businesses.
Chartered surveyor Ian Sloane added that a discount on business rates would be good for retailers, but warned the loss in money that would have otherwise been generated “has to come from elsewhere”.
The cost-of-living crisis has hit households and businesses hard, with utility bills soaring. Sunak promised to build on an existing support package offering discounts off bills for households, but he made no mention of any similar support for businesses.
Many short-term vows have also come from Truss, who has promised a reversal of the 1.25% National Insurance hike, which Sunak put in place in April this year.
She pledged to suspend the Climate Change Levy, payable on electricity and gas bills. Currently, roughly 8% of any bill is directed towards environmental and social schemes.
Christine Hope, of Hopes of Longtown in Herefordshire, branded the policy “a scapegoat for poor leadership and poor planning”.
She said: “I don’t know how I’m going to pay my electricity bill come December nor help my staff with the cost-of-living crisis, but this is short-term, people-pleasing stuff. It’s not helping society. The energy companies are making vast profits and there needs to be a windfall tax,” she said.
Keir Starmer used the leadership race as an opportunity to outline the Labour party’s plans to help with the cost-of-living crisis, calling for the cap on energy prices to be frozen. The Labour leader accused Sunak and Truss of not producing any “credible proposals” to combat the energy crisis.
Former remainer Truss vowed to review all EU law impacting British statute. “EU regulations hinder our businesses and this has to change,” she said. However, one leading wholesale expert warned of the implications this would have on consumer confidence.
“Businesses might find EU law cumbersome, but it does have an impact in terms of regulating the safety of products in stores,” they said.
Similarly, Federation of Wholesale Distributors chief executive James Bielby said: “Ensuring a robust, safe, varied and competitive food distribution network has to be among the new prime minister’s first priorities. Costs are going to continue rising, and be passed on to the public, unless the government intervenes immediately. We have sent a manifesto to both candidates via Conservative MPs, proposing several actions that would limit those rises, and keep prices affordable in shops, restaurants and public sector contracts.
“FWD’s recommendations for the new PM’s immediate action include scrapping or delaying forthcoming policies that would drive up food prices, cutting fuel duty by 15p per litre, and using the UK’s control over its borders to bring in sufficient labour for food production and distribution.”
Both candidates also promised to crack down on antisocial behaviour. Sunak said he would give police greater powers to punish offenders and double the fine councils can issue. Meanwhile, Truss promised to deliver on the Conservative’s manifesto pledge of recruiting 20,000 additional police officers.
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