Five times Sunak betrayed British businesses

The Liberal Democrats have highlighted five times Rishi Sunak has betrayed British businesses, hitting them with broken promises and billions in tax rises and higher costs.

It comes as the Prime Minister attempts to “woo” industry chiefs at a conference today.

The five times Sunak has betrayed British businesses:

1. Hiking taxes - Rishi Sunak raised national insurance on small businesses. Analysis found this cost British employers nearly £4bn over seven months.

2. Slashed businesses energy support -  Liberal Democrat analysis estimates that Sunak’s cut to business energy support whilst cost SME’s roughly £7.6bn in higher energy costs.

3. Australia Trade Deal hit to farmers and food manufacturers - Botched trade deals supported by Rishi Sunak risk leaving the British food industry millions of pounds worse off.

4. The Government’s broken promise to cut business rates - In its 2019 manifesto, the Conservative party  promised to “cut the burden of tax on business by reducing business rates.” 

5. Mini-budget - Rishi Sunak remained a loyal Conservative MP whilst his party crashed the economy and sent mortgage rates spiralling.

Sarah Olney, Liberal Democrat Treasury Spokesperson, said:

“Rishi Sunak is no friend of British business. As Chancellor his budgets whacked small businesses with unfair fair tax hikes and signed off botched trade deals which left farmers worse off. 

“This Conservative Government hasn’t a shred of economic integrity left. In recent months they have crashed the economy, sent interest rates spiralling and failed miserably to control price rises.

"From the cost of living crisis to flatlining growth, it is failure after failure from this Government. 

“Why should British business trust a word Rishi Sunak says after that appalling record?"

ENDS

Notes to Editor:

1. Employer’s National Insurance:

The 1.25% national insurance rise was in place for the first seven months of the 2022-23 financial year. According to the March 2022 OBR report (table A.5, p.205) the tax rise was expected to raise £10.9bn in total that year. According to House of Commons Library analysis commissioned by the Liberal Democrats, around 60% of National Insurance receipts come from employers; 38% from employees; and 2% from self-employed workers. This suggests that the NI hit to employers would have been £6.6bn over the full year, or £3.9bn over the seven month duration of the tax rise.

2. Cut in business energy support

On April 1st, the Government replaced the Energy Bill Relief Scheme for businesses with the less generous Energy Bill Discount Scheme. The change amounts to a cut in support of around 85%. Liberal Democrat analysis estimates that SMEs will face a hit of roughly £7.6bn in higher energy costs as a result, over the next year.

This was calculated using typical energy consumption data for businesses of different sizes. 2.6 million micro businesses (1-9 employees) will see a hit of roughly £2,000. 360,000 small businesses (10-49 employees) will see a hit of roughly £4,250. And 63,000 medium-sized businesses (50-249 employees) will see a rise of roughly £7,900. Full analysis can be found here.

The FSB warned that 1 in 4 SMEs could close or lay off staff due to the reduction in business energy support. And the British Retail Consortium has warned that retailers will need to raise their prices in response. 

3. Australia Trade Deal hit to farmers and food manufacturers

The Department for International Trade’s impact assessment (p. 6) of the agreement, published alongside the final text of the trade deal on 17 December 2021, refers to “a reallocation of resources away from agriculture, forestry and fishing” of around £94 million, and £225 million away from the semi-processed foods sector, whilst warning of “adjustment costs for affected sectors, businesses and employees”.
 

4. The Government’s broken promise to cut business rates:

In its 2019 manifesto, the Conservative party  promised to “cut the burden of tax on business by reducing business rates […] via a fundamental review of the system” (p. 32).

The Government’s recent Non-Domestic Rating Bill broke this promise, by failing to reform the system. Martin McTague, National Chair of the Federation of Small Businesses said: “The 2019 Manifesto commitment to hold a fundamental downward review of business rates has not happened.”

5. Mini-budget: Rishi Sunak remained a loyal Conservative MP whilst his party crashed the economy and sent borrowing rates spiralling.