Conservative MPs in “red wall” seats have urged the chancellor to cut business rates, days after Labour announced it would abolish the tax and overhaul the system. Tory MPs who won seats in 2019 in Labour’s northern heartlands, including Bishop Auckland’s Dehenna Davison, Leigh’s James Grundy and Lee Anderson from Ashfield, said high street shops were most at risk of closure in seats that Boris Johnson had promised to prioritise with levelling up. There have long been calls to reform business rates, which raise revenues of about £25bn a year in England. In March 2020 Rishi Sunak promised a review of the tax, which is expected to report this autumn. The shadow chancellor, Rachel Reeves, said this week that a Labour government would freeze business rates and eventually replace them with a new, as yet undefined system that she said would reward investment, with a particular focus on businesses investing in decarbonisation and green technology. Before the Tory conference this week, the call to slash the tax was backed by the former cabinet minister Esther McVey, who coordinates the Blue Collar Conservative group of working-class backbenchers, as well as the MP Kevin Hollinrake, who has run campaigns to overhaul property taxation including council tax and stamp duty. Their demand was prompted by data published last week by the British Retail Consortium that suggested four out of five larger retailers would probably have to close more shops unless their business rates bill was reduced. The group also cited research published by WPI Strategy on the impact of the pandemic on retail, particularly in areas identified for levelling up. More than 8,700 chain stores closed in UK high streets, shopping centres and retail parks in the first six months of 2021. Constituencies with the highest numbers of vacant shops were also in the areas identified in the report: 20% of units are vacant in the north-east, and 17% in Yorkshire & Humber and the north-west, compared with just 10% in London and 12% in the south-east.
Grundy, who holds Andy Burnham’s former seat in Leigh in Greater Manchester with a slim majority, said: “My constituency is one of the worst affected in the whole of England and Wales. I’m now convinced that bringing these costs down should be an essential part of the levelling-up agenda. Voters in the north trust this Conservative government to transform their prospects. We must deliver.” In February MPs wrote to Sunak demanding that business rates are reduced from about 50% of market rent to about 35%. Reeves said the Conservatives should follow Labour’s lead. “The Conservative government should listen, stop with the sticking plasters and come up with real action to support businesses,” she said. “Labour would immediately cut business rates, and in the long run we would scrap them altogether, replacing them with a new system of business taxation fit for the 21st century.” New data has also revealed how the energy crisis is likely to affect seats that the Tories are aiming to hold. Around one in six households in parliamentary “red wall” areas already have above-average levels of fuel poverty, and they can expect to see the situation worsen as a result of next week’s energy cap rise. Three of the council areas with the highest proportion of household fuel poverty in England are in the “red wall”: Stoke-on-Trent, Wolverhampton and Sandwell in the West Midlands. On average just over 15% of households in “red wall” areas are fuel poor, compared with an England average of just above 13%. Simon Francis, a coordinator of the End Fuel Poverty Coalition, which prepared the data, said: “The latest rises in wholesale prices means that we face the possibility of more households facing fuel poverty than ever before.”