The Chancellor, Philip Hammond, has shown some flexibility that he is prepared to take measures in the Budget to elevate some of the pressure on businesses that face tax hikes in the business rates re-valuations.
Speaking to fellow Tory MPs at a meeting of the backbench 1922 Committee last night, in a much more conciliatory tone, Mr Hammond appeared to be offering an olive branch to colleagues saying
he is “listening” to their concerns about the imminent re-valuation of business rates.
These indications last night will be welcomed by business groups and some Tory MPs who have continuously warned of high street store closures, but the new Chancellor will not show his hand before the Budget.
Today business rates continues to dominate the front pages of the Times, Daily Telegraph and Daily Mail – showing just how much pressure the Government is under on this issue, notably even within the party. Many of those negatively affected by the rates will live and work in traditional Tory seats. At the 80-minute meeting last night, a series of those MPs confronted Mr Hammond with examples of businesses in their constituencies that will face steep tax hikes.
For the longer-term Mr Hammond also indicated he wants more fundamental reform of the system in future to ensure online retailers do not benefit to the detriment of the high street.
The IoD’s Head of Taxation, Stephen Herring, has urged the Chancellor to level the tax playing-field. In a recent Budget submission
, the IoD said a new Tax Commission is needed to keep the tax system up to date with changes to the economy including the growth of self-employment and the so-called ‘platform economy’.
The government-backed investigation would look into how taxes applied to the self-employed could be brought in line with employees, and how online stores could be taxed fairly in relation to high street shops.
The Prime Minister, Theresa May, took the unusual step of sitting in the Lords to watch the opening speeches on the Brexit bill yesterday. Many will be wondering if this was done to send a signal to peers, but her official spokesman said this was “in recognition of the importance of this bill as it proceeds through the Lords”. Peers were urged
to “respect” voters’ decisions to leave the EU and the Leader of the House Baroness Evans added that they must not “frustrate” Brexit. However, Labour has said “reasonable changes” could take place.
Members of the Lords are keen to have their say, so the sitting was extended to midnight on Monday to allow more peers to speak and the debate will continue today.
Mrs May has said she wants to invoke Article 50 by the end of March, and the Government has warned the House of Lords not to frustrate the process. But opposition and crossbench peers are seeking guarantees about the rights of EU citizens in Britain and the role of parliament in scrutinising the process.
For Labour, Lords opposition leader Baroness Smith of Basildon said the government would not be given a “blank cheque” and that “if sovereignty is to mean anything, it has to mean parliamentary responsibility”.
In another contribution Lord Newby, leader of the Liberal Democrats in the Lords, said the bill could be changed and sent back to the House of Commons for reconsideration, arguing there was a “world of difference between blocking... and seeking to amend it”.
On the other hand, UKIP's Lord Stevens of Ludgate said the prime minister “should be congratulated” for “honouring” the commitment to leave the EU, following the referendum. For now, the debate continues.
HSBC's profit plunge
HSBC has revealed its pre-tax profit plunged 62% in 2016 as it faced a year of “largely unexpected economy and political events”. Hong Kong listed shares in HSBC were nearly 4% lower on the results.
The bank attributed the fall to a string of one-off charges, including the sale of its operations in Brazil. It said given “volatile financial conditional”, it was broadly satisfied with its own performance.
HSCB also raised concern over the Brexit vote, President Trump's protectionist stance and uncertainty surrounding upcoming European elections.
The bank confirmed last year it would keep its European headquarters in London, despite the Brexit vote. However, announcing the results on Tuesday, Mr Flint said the bank's current planning suggested it may need to relocate some 1,000 roles from London to Paris over the next two years, depending on how negotiations develop.
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