Retail bosses warn sky-high business rates are killing town centres

Bosses of UK’s top 50 retailers write letter to Chancellor Sajid Javid warning him that sky-high business rates are killing our town centres

  • Traditional High Street stores have been hit hard by the rise of internet shopping 
  • Retail business leaders warn Chancellor Sajid Javid of ‘sky-high’ business rates 
  • Fifty leading retailers have urged Mr Javid to reform the tax before it is too late 

Fifty leading retailers today demand an urgent overhaul of Britain’s toxic business rates system to save the high street.

The bosses of many of the country’s best-known chains – including John Lewis, Sainsbury’s and Marks & Spencer – warn that sky-high rates are killing town centres.

In a powerful joint letter to Sajid Javid, they urge the Chancellor to reform the tax before it is too late.

Traditional stores have been hit hard by the rise of the internet, with household names such as House of Fraser, Debenhams (above) and HMV rescued from administration. Even stalwart M&S is being forced to shut 100 outlets [File photo]

The retail leaders, who also include the bosses of Boots, B&Q and Harrods, say the combination of internet shopping and punitive taxes is having a ‘dramatic’ impact on business. New figures show that more than one in ten high street stores now stand empty.

The letter is also backed by executives from Pret-a-Manger, Greggs, DFS, Iceland, Asda, Debenhams, Primark, the Co-op, Hamleys and River Island.

The Daily Mail has repeatedly highlighted the crisis in the retail sector, which threatens to ruin many of the country’s town centres. 

This newspaper’s long-running Save Our High Streets campaign calls for a level playing field between traditional shops and their newer online rivals.

Last month 10.3 per cent of stores were vacant, according to the BRC and data firm Springboard. And the number of people visiting bricks and mortar shops was 1.9 per cent lower in July than it had been a year earlier, the biggest fall for seven years [File photo]

Business rates are expected to rake in £31.3billion of tax in this financial year, according to the Office for Budget Responsibility.

Organised by the British Retail Consortium (BRC), today’s letter takes aim at the ‘broken’ system and says: ‘This outdated tax is hindering our plans for investment, holding back productivity growth and detrimentally impacting communities up and down the country. The UK has one of the highest commercial property taxes in the world.

‘The effect on many high streets and town centres has been dramatic. Business rates often represent the tipping point between opening a new store or a store’s viability and its closure.’ 

The letter calls for a freeze on rates to stop them rising by inflation, a more efficient appeal process, ‘improvement relief’ for shops that spend money to upgrade their premises, and reforms to make the system simpler.

It follows an appeal from Tesco boss Dave Lewis. Writing in the Mail in May, he called for rates to be cut, and a new online sales tax.

Traditional stores have been hit hard by the rise of the internet, with household names such as House of Fraser, Debenhams and HMV rescued from administration. Even stalwart M&S is being forced to shut 100 outlets.

Shops in prime locations with few customers can pay far more than warehouses operated by online rivals such as Amazon. Stores are assessed and charged a percentage of their so-called rateable value each year. An Amazon warehouse is pictured above in Mexico City

Last month 10.3 per cent of stores were vacant, according to the BRC and data firm Springboard. And the number of people visiting bricks and mortar shops was 1.9 per cent lower in July than it had been a year earlier, the biggest fall for seven years.

Retailers claim business rates, which are linked to a property’s value on the rental market, penalise high street stores.

Shops in prime locations with few customers can pay far more than warehouses operated by online rivals such as Amazon.

 The Daily Mail has repeatedly highlighted the crisis in the retail sector, which threatens to ruin many of the country’s town centres

Stores are assessed and charged a percentage of their so-called rateable value each year. For large sites it stands at 50.4 per cent.

More than 7,500 stores closed in 2018, analysis by the Local Data Company shows, and the BRC estimates that 70,000 jobs were lost. 

Among the worst hit areas is Burslem in Stoke-on-Trent, where it was estimated in April that 44 out of 130 shops were vacant. 

The once-thriving town lost 13 independent and two chain outlets last year, and gained none.

A Treasury spokesman said: ‘Last month, the Prime Minister announced a £3.6billion Towns Fund to support our high streets and town centres.’ 

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