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Ports in taxes storm.

Byline: SUE SCOTT

THE Government suffered its second defeat in the Lords last night over retrospective taxes on port-based business, which have landed one Tees company with a pounds 500,000 bill.

Although the vote, prompted by the Tories' Lord Bates - a former Cleveland MP, now a member of the shadow cabinet - is no more than a protest against the way a ratings valuation was mishandled by government, it keeps a fight being waged by hundreds of port-based businesses in the public eye.

At Teesport, Renault car importers CAT (UK), already struggling against a downturn in the market, was left reeling by a six-figure demand based on a revaluation which had taken the Valuation Office three years to complete.

This month it joined a protest group of companies similarly affected by pounds 200m of backdated tax demands which has, in some cases, forced layoffs and even shutdowns.

So far, the Government has refused to reverse the backdating, but has given companies eight years to pay off the debt. Firms argue that the bills are a millstone around their necks as they remain as a liability on the balance sheet, putting off buyers.

PD Ports admitted earlier this year that it had taken a decision not to proceed with a purchase at Hull partly because the accounts showed a huge rates debt.

According to Lord Bates, the issue sparked a rift between the Home Secretary's office and that of Communities and Local Government in July, with Alan Johnson attacking fellow cabinet member John Denham. Lord Bates said they were "fighting like ferrets in a sack over who was to blame".

A private letter from Mr Johnson to his colleague at the DCLG earlier this year said: "These businesses are damaged by a government that on the one hand is looking for ways to help small businesses through the recession whilst at the same time is imposing a completely unfair retrospective system that will destroy jobs and put these companies out of business. The VOA has committed an egregious error, failed in its duties and failed to obey its instructions given by Government."

Peers supported the Tory motion last night by 72 votes to 66 having backed a similar move in March this year.

Lord Bates said jobs were still at risk. "The conduct of the Valuation Office Agency has been shambolic and the culpability of this government in failing to address the manifest injustice, choosing to fight amongst themselves rather than getting a grip on the situation before it is too late, is lamentable and something people will remember," he said.

He called on the Government to deal with the matter to "save hundreds of jobs and Britain's tarnished reputation overseas".

"We are a trading nation, and 95% of our visible trade as a nation is imported or exported via our sea ports. The economic health of our ports is as vital a component of our economic infrastructure every bit as much as the banking system. Whilst the Government is pouring billions into the banks, the Government won't even raise a finger to help the port businesses keep afloat even when it was they who shoved them overboard in the first place," said Lord Bates.

Greg Brown of CAT, said the threat of closure which had been feared by staff as a result of the demand had subsided, but that was largely thanks to a recent upturn in sales prompted by the scrappage scheme. "It's not back to happy times, but it is moving the right direction."

He said campaigners at Liverpool and Humber docks, which had been harder hit by the rates debacle, were hopeful that the cash could be recovered having taken on a lawyer to fight their case.
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Title Annotation:Business
Publication:Evening Gazette (Middlesbrough, England)
Date:Oct 15, 2009
Words:620
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