EXCL Philip Hammond scrapped VAT rise for small firms after DUP pressure
2 min read
Philip Hammond ditched plans to hike VAT on small firms after coming under pressure from the DUP, PoliticsHome has learned.
Senior DUP sources said they had "pushed back hard" against the proposal in a series of meetings with the Chancellor ahead of his Autumn Budget on Wednesday.
The Conservatives fear angering the Northern Irish Unionists because their 10 MPs hold the balance of power in the Commons as part of a £1.5bn confidence and supply deal to keep Theresa May in office.
Mr Hammond had been mulling a reduction to the £85,000 turnover threshold at which small companies pay VAT to something closer to the global standard. The EU average is £20,000.
But a top DUP source said the party told the Chancellor in no uncertain terms that they could not support the measure if it appeared in the Budget.
In the Commons on Wednesday Mr Hammond appeared to argue for reducing the threshold before finally saying he would keep it as it was but consult on its design.
“I almost had a heart attack when he started talking about the VAT threshold because it sounded like he was going to do it,” a top DUP source said.
Other issues the DUP lobbied for were the continued rise in income tax thresholds and changes to the Universal Credit system - both of which the Chancellor announced.
The source added that they were “quietly content” with the results of the Budget and the success on the measures they had pushed for.
Another senior insider said the DUP MPs "worked very closely with Philip Hammond on the Budget" - holding around 10 meetings in total.
One top party source added: "We were quite involved with the Chancellor but of course he makes all his own decisions."
In another show of the sway the Unionists hold over the Tories, Theresa May's right hand man Damian Green made a surprise appearance at a DUP dinner in Belfast last night ahead of the party's annual conference.
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