Publishing its submission to HM Treasury ahead of the Autumn Statement on 3rd December, the British Retail Consortium (BRC), has highlighted the consensus across the business world that the business rates system is in need of fundamental reform and is seeking a statement of intent that the Government plans to go beyond the steps it has already put in place to make the system fairer.
Business recognises that fundamental reform of the business rates system will take time, and the BRC’s submission outlines how commitment from Government now, along with immediate action to extend the one year cap, extension of small business rate relief, and of the discounts announced in the 2013 Autumn Statement, would help businesses to start to take action on job creation, high streets, and inward investment. It also highlights steps critical to the success of the on-going review into the system’s administration including the removal of small businesses from the burden of rates and more regular valuations.
In a letter to the Chancellor, BRC director general Helen Dickinson sets out how the Chancellor could reassure business when he takes to the Despatch Box with an indication that broader reform is on the Government’s agenda. This would enable retailers, manufacturers and other industries affected by business rates to invest more in physical space and personnel, thus further supporting the economic recovery. The need for this is clear; over the last three years the increase in business rates for retail has outstripped the fall in retail investment. Enabling retail investment to return to pre-recession levels is the equivalent of over 40,000 jobs.
Helen says: “The retail industry’s championing of the need for fundamental reform of business rates is being increasingly amplified by industries as diverse as steel and car manufacturing and some of the country’s largest property companies. This is a strong indication that the time is right to set out a roadmap to fundamentally reform the system and make it fit for purpose for the 21st century. We do not have any expectation that this could be fulfilled in advance of the general election but an indication that it will be on the agenda for a future government will resonate very well across British business and facilitate further planning to allow business to play a fuller part in the economic recovery.”
The BRC submission also highlights the need to improve infrastructure for business by tackling excessive fees charged by banks to process card payments, known as interchange fees. The recent judgement by the European Court of Justice comprehensively and decisively supports retailers’ decade-long campaign for a more competitive payments system and a reduction in unjustifiably high card fees. The UK is still however to implement lower domestic fees – unlike many other European countries. The differing levels of card fee payments in the UK compared to Europe affects UK businesses’ ability to compete internationally by imposing higher costs on them than European competitors.
Helen adds: “We welcome the fact that Government has placed great emphasis on building business for the future, in supporting small companies and building much needed infrastructure. Going a step further by following the lead of other Member States and introducing domestic interchange fee caps would bring great benefit to consumers.”