Leading CEOs from across the world of British retail are backing the Chancellor Phillip Hammond to deliver a "shoppers' Budget" this Wednesday (22nd), and are calling for decisive action to relieve the business rates burden.
Without action, retailers alone face a stark £270m leap in business rates bills next Spring. This could have implications for investment plans, including in new or refurbished stores – particularly those in less economically viable locations. Almost one in 10 retail premises is vacant, and ratepayers as a whole face a £1.2b leap in their rates bills from April.
In its Budget submission last month, the BRC recommended that the Chancellor freeze the business rates multiplier in 2018, and thereafter accelerate the switch from RPI to CPI indexation. UK business rates, higher than anywhere in the OECD nations, are already a significant factor in discouraging local investment.
Speaking ahead of the Chancellor’s Budget, Helen Dickinson OBE, chief executive of the BRC, says: “There are few better yardsticks for Wednesday’s budget than the daily realities of local communities, shops and jobs. As a priority, the retail industry wants to see decisive action to enable British businesses to continue to invest in the needs of their customers and communities by stemming the near 4% increase in business rates planned for April 2018. This would be a positive first step towards a more financially sustainable and reformed rates system over the years ahead.”
Christian Mazauric, CEO of B&Q, comments: "The proposed increase to business rates ultimately affects retailers' ability to deliver value to customers. We need a pragmatic approach to business rates reform that reflects the dynamic state of the retail sector, as well as mounting costs and economic uncertainty. Not implementing the planned hike in rates and establishing robust and regular property revaluations will be two key steps to achieving that.”
Wilf Walsh, CEO of Carpetright, adds: “The sheer scale of the expected increase in business rates bills next Spring would be a challenge even at the very best of times. That money could be much better spent investing in the needs of our customers. The prospect of further increases merely reinforces the need for rates to be capped in the year ahead and for a recasting of the rates system over the medium term so that it becomes modern, sustainable and fit for purpose in the 21st century.”