McDonnell: The chancellor needs to support small businesses in the budget

Business rate “political games” from the Tories will hit small businesses the hardest as large online retailers benefit, John McDonnell will say.

McDonnell will argue that whilst the revaluation was “long overdue” it has been delayed “not for the best economic reasons, but for the best interests of the Tories ahead of a general election”.

Speaking at the British Chambers of Commerce later today, the shadow chancellor is expected to call for a small and medium enterprise emergency relief fund, worth at least £500m to be administered locally until 2020. It would help those smaller businesses most effected by the government’s revaluation of business rates.

“The growth of online retail is of course welcome for consumers who have benefitted from increased price competition. 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,” he is expected to say.

“If the Government carries on in this manner they risk letting our high street shops wither on the vine, and what for? Just so they can play political games with the business rates system.”

It “cannot be right that whilst the average small shop will be hit by an extra £3,663 in their business rates over the next five years, some large retailers and online retailers will see a substantial fall,” he will add.

“We believe that government action now is vital to reduce the impact on smaller businesses, and move towards making the local business taxation system fairer and closer to the real economy.”

“For a country facing the productivity slump that Britain is now experiencing, additional taxation on investment like this cannot be justified. Alongside more regular revaluations, removing periodic and unmanageable hikes, Labour is calling for a fundamental overhaul of the business rates system.”