Shadow chancellor demands £500 million relief for SMEs

The shadow business secretary will propose a £500 million emergency package for small retailers struggling to pay the new revalued business rates, ahead of Chancellor Philp Hammond‘s budget next week.

John McDonnell will address the British Chambers of Commerce with a warning that without extra aid, small retailers could face decimation and the high street could become “wasteland”.

He will also warn that small retailers on average face a £3663 rise in rates over the next five years, although the government says 75 per cent of businesses will be better off after the valuations.

Hammond faces significant pressure from both MPs, London Mayor Sadiq Khan and key retail figures including Mary Portas and Sainsbury’s chief executive Mike Coupe to provide help for the businesses expected to be impacted by the new rates.

McDonnell will demand an emergency fund for small businesses, funded by reforms to the entrepreneurs tax relief break, until 2020.

READ MORE: “Appropriate relief” for retailers hard-hit by business rates: Theresa May

“The growth of online retail is of course welcome for consumers who have benefited from increased price competition,” McDonnell will say in his speech.

“However, we cannot let our high streets become a wasteland of boarded-up shop windows, due to poor government decision-making that makes the competition rigged against the small businesses on our high streets.”

“We cannot go ahead in the way we are if it could mean many businesses go to the wall, and the jobs destroyed.

“Labour wants to support these businesses that are a cornerstone of our economy.

“And it’s becoming clear day after day, that Labour is the only party that is truly on the side of small and medium sized business.”

He is also set to criticise the Tories‘ decision to delay the revaluation in 2015 by two years, which has led to the changes now being so significant that they could endanger retailers.  

The shadow chancellor argued that this was not in the best interests of businesses, but in the interest of the party and was “handled atrociously”.

Many, including McDonnell, have also voiced concerns that the rates do not reflect the modern economy, giving breaks to online retailers with huge warehouses and punishing small independent bricks and mortar stores. 

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