Government 'too bogged down by scandal to help businesses through crisis'

The Government is “asleep at the wheel”, Labour has said, as it called for a business rates freeze to help companies facing rising costs.

Shadow business secretary Jonathan Reynolds also accused ministers of currently being “too busy bogged down in constant crisis and scandal” to help businesses.

But the Government hit back, saying that Labour’s calls for business rates to be frozen, and eventually replaced with a different tax, lacked detail.

Kicking off an opposition debate on reducing costs for businesses, Mr Reynolds said: “Right now, every economic indicator we have is heading in the wrong direction, the forecast for long-term growth is poor, productivity growth is appalling, wages are stagnant, and inflation is high and rising.”

He added: “It feels that the Government are asleep at the wheel, or perhaps they’re just too busy bogged down in constant crisis and scandal to get the grip that our economy needs.”

Outlining what Labour called for in its motion, he said: “Freezing and replacing business rates, saving the average shop or small factory £4,000 this year. Alleviating the debt burdens on firms, allowing them to pay back some of their Government loans when they’re more profitable.

“And not going ahead with that national insurance rise, a tax on jobs for employers at the worst possible time. And a £600 million contingency fund for businesses, particularly the energy intensive sectors, to address those spiralling energy costs.”

Business minister Lee Rowley said: “We are still yet to hear the detail of how Labour will meaningfully reform business rates.”

He said: “The Government has tried to do what it can in the most extraordinary period of our lifetimes to support businesses through those tough times, and the interventions we have taken are unprecedented.”

He added: “We came out last year with a reform of business rates which is intended not just to save a substantial amount of money for businesses… but also to ensure that there is reform and recognition that there were changes that were necessary.”

The minister also said “global pressures are the main drivers of higher inflation in the UK” and the recent high energy prices have been driven by the increase in demand for wholesale gas – and the Government is constantly engaging with stakeholders “to consider what action may be necessary” on addressing rising energy prices.

Elsewhere, SNP business spokesman Stephen Flynn warned that Labour needed to set out how it plans to replace business rates, which it has claimed it would scrap altogether if elected to power.

Mr Flynn said: “What comes next? What do they want to replace it with? From a local authority background myself I know the huge role that business rates play within the funding of local authorities and unless you can say ‘this is what we are going to replace it with’, then the public are going to look at it and say – ‘where is the detail?’”

MPs voted 219 in favour, none against, the non-binding motion by the Labour Party to “recognise the strain businesses are under following a difficult Christmas period and two years of disruption during the Covid-19 outbreak”.