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Matt Hancock vows to 'save' high street with tax cut for small retailers funded by new Amazon tax
Matt Hancock has vowed to "level the playing field" for high streets by scrapping business rates for small retailers while hitting tech giants with the new Amazon tax.
The Health Secretary has announced the £1.5 billion-a-year pledge, which would exempt hundreds of thousands of businesses from the levy, as part of his leadership campaign.
In an interview with the Telegraph Mr Hancock said business rates are a “twentieth century tax” which needs a “21st century replacement” - and makes the system unfairly skewed against bricks and mortar businesses. The energetic minister wants to change that and "save the high street".
Pointing to his orange Casio wristwatch, which he bought in a shop in Newmarket a few years ago, Mr Hancock said: “I wear the high street on my wrist every day.”
While he also shops on Amazon, he said tax is the problem. "I would end business rates for small businesses on high streets altogether, and I would pay for it by an increase in the new digital services tax.” He also plans to dip into the £26billion Brexit buffer set aside by Philip Hammond.
The “Amazon tax”, a levy against social media platforms, internet marketplaces and search engines, was announced in last year’s Budget - and Mr Hancock said he will set higher rates than planned.
Asked if he feared taxing internet giants more could curb innovation, Mr Hancock said: “There are ways to do this. I have already made reforms - for instance take the tax paid on gambling.” Soon after he was elected in 2010, Mr Hancock introduced a bill which changed the way the industry was taxed.
Between tech giants and gambling, he is taking on industries that spend big budgets lobbying MPs in Parliament. Asked if he is up for the fight, Mr Hancock said: “Lobbying schmobbying. It doesn't make any difference to my views.”
He added: “I think it's perfectly reasonable for people to make their case, and they do. But I am talking about my views. You can see that coming a mile off.”
His business rates plan is part of a wider economic policy which includes raising the national living wage to £10.21 by 2022. Mr Hancock has been working hard to position himself as the future of the party, shaping its policy and attracting new voters - and, crucially, young people.
While Rory Stewart has taken to social media to win over the youth with his tour of Britain, Mr Hancock has taken a more unusual approach - swearing in national newspaper interviews or, as he refers to it, using “modern language”.
First there was the “f*** ‘f*** business’” in the Financial Times - a rebuttal of his leadership rival Boris Johnson’s infamous comments - then saying he will “get sh*t done” in a Times podcast.
It has raised eyebrows but Mr Hancock but said this is “just the language of somebody who wants to get things moving.
“I feel very strongly about what we need to do about the future of this country. And if I sometimes use modern language to express my sense of frustration and to explain how I want to make a difference, then so be it.”
Asked if this is an attempt to appeal to the young, Mr Hancock said: “Not directly, but I have a sense of duty to get this country moving forward. And sometimes I express that emphatically.
“Churchill once said: 'Short words are best, and old words when short are best of all. And a bit of Anglo-Saxon language occasionally creeps into anybody’s lexicon.”
While he points out he is, at 40, the youngest candidate in the Tory leadership race, Mr Hancock said: “It’s not about that - it’s about how we appeal to younger voters. And we do that by sounding, looking and feeling like a completely different party.”
After securing a first at Oxford and a masters from Cambridge, Mr Hancock worked as an economist in the Bank of England, specialising in housing policy.
What is his plan for it now? “The answer to housing is to build more houses,” he said. “And the answer to getting the permission of the population to build more houses is to build them in the right place.”
Although he does not give policy details he said young people being locked out of the housing market is a “personal” issue for him - one that has profoundly affected his own family.
“I moved to London just before house prices really shot up and I was able to buy a flat,” he said. “My brother, who is four years younger than me, moved to London only half a decade later and still, 20 years [since] hasn’t yet been able to buy a flat.”
He said his brother, a fintech entrepreneur, “finds it extremely serious. It’s no joke.” Although lower house prices played a part helping him get his head start, Mr Hancock does admit his parents helped him buy his first home.
The leadership hopeful's focus on economic policy comes days after he published a five-point Brexit plan, which he insists will allow him to secure new deal with Brussels. He has said no deal is “not credible as a policy option” and was among the first to publicly say holding a general election before delivering Brexit would be a “disaster.”
Suspending Parliament to push through no deal would bring "international embarrassment", he said, adding he has seen legal advice which showed it would be "illegal".
But he is looking beyond Brexit: “We need a leader for the next six years rather than the next six weeks or the next six months."
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