Rishi Sunak on Tuesday night vowed to slash business rates this autumn as he warned Liz Truss’s economic plans would see the Tories get “absolutely hammered” at the next election.
The former chancellor said that supporting high streets would be “top of my mind” when asked by a Conservative member whether he would cut taxes on struggling shops.
He committed to extending the current 50 per cent reduction in his first Budget as Prime Minister, saying that small retailers are the “beating hearts of all our communities”.
“Particularly those businesses in the hospitality and the retail sector, those on our high streets and our town centres, that is the number one tax they talked to me about when I was chancellor,” Mr Sunak said.
“That’s why in the pandemic I did an enormous amount to help support that industry, because I know how important it is to our communities, the jobs that it provides.
“It’s why this year I cut business rates for those businesses by 50 per cent as chancellor, that’s the biggest tax cut on business rates outside of coronavirus that we’ve ever seen in this country.
“Because I know that it’s the number one thing that makes a difference this autumn in the budget we’ll do the same.”
Mr Sunak, who has largely resisted outlining big tax cuts unlike his rival Liz Truss, suggested the reduction would then be made permanent under his watch.
He said: “In the autumn we will need to set in place the business rates for the next few years and the top of my mind is always going to be supporting our high streets and town centres.
“Because they are the beating hearts of all our communities, all our market towns, all our villages, everything. They need our support.
“It’s the Conservative thing to do to make sure our communities are strong. The best way to help them is through business rates. That’s what I did as chancellor and that’s what I’ll do as Prime Minister.”
Ms Truss has pledged to reform business rates if she wins the keys to No 10.
It comes after leading retailers urged both leadership candidates to pledge a reduction in the tax amid warnings shops face going to the wall without more help.
In a letter to the pair the Retail Jobs Alliance warned companies are facing an increase in their business rates bill next April of about 10 per cent from inflation alone.
It counts high street giants including Tesco, Greggs, Waterstones, Claire’s Accessories, the Co-op, Kingfisher and Sainsbury’s amongst its members.
“The next government must prioritise fundamental changes to the ‘shops tax’. A permanent reduction in business rates for all retailers, regardless of their size, would make a big difference to retailers’ ability to invest more in shops and stores as well as to create jobs.
“You have both talked of your intention to cut taxes in order to stimulate private investment. If taxes are to be cut, we think a reduction in business rates should be prioritised,” the letter said.
During a feisty hustings in Darlington’s historic Hippodrome theatre the leadership duo once more traded blows on economic policy.
Mr Sunak said that his rival's plan to address the cost of living crisis via tax cuts are “not much good" to those Brits on the lowest incomes, including pensioners.
He committed to providing extra cash for help with fuel bills this winter but ruled out another blanket £400 payment, saying further support will be targeted.
Without that further help, he warned, "not only will millions of people suffer, we will get absolutely hammered when it comes to an election. The British people will not forgive us for not doing that."
In reply Ms Truss refused to rule out authorising extra handouts but said she wouldn’t pledge to do so until she is in office.
She branded the former chancellor’s plan “Gordon Brown economics” and said she “fundamentally” disagrees with “putting up taxes and then also giving out benefits”.
“I understand people are struggling with their bills on fuel and food but the first thing we should do as Conservatives is help people have more of their own money,” the Foreign Secretary said.