Letwin attacks higher stamp duty charges

Conservative shadow chancellor Oliver Letwin has vowed to fight the Government's decision to raise stamp duty costs, due to become law on 1 December at an estimated £11m cost to the retail and hospitality industry.

At a meeting of leading business leaders last week, Letwin attacked the Government over its introduction of another "classic stealth tax", and said the Conservatives would be pleading with the Government to overturn the decision. He said the tax was a "bureaucratic nightmare" and had been introduced without paying any attention to what industry said during the consultative process.

"This is another tax targeted at the business community and will help squeeze the lifeblood out of the business economy. Britain's businesses are already overburdened by this Government. Conservatives will fight to force the Government to review this onerous regulation," he said.

The stamp duty reform will see licensees charged duty based on the length of their lease rather than one year's average rent. It means licencees will pay 1% on the value of the whole lease, although predicted rents will be reduced by 3.5% annually. Leases under £150,000 are exempt.

Nick Bish, chief executive of the Association of Licensed Multiple Retailers, said the reform would change the business model of the industry by reducing long-term investment and raising the entry point for new businesses.

"The tax means businesses won't be able to enter the industry at a low-entry level, but it also means there will be shorter leases because people will want to avoid stamp duty. The downside is they won't invest in their businesses."