Ed Miliband’s pledge to help small businesses by freezing business rates has received a lukewarm reception from the fashion industry.
This week the Labour leader said he would reverse the business rate rise planned for April 2015 if his party was elected in May of that year, and freeze it for 2016. Retailers occupying properties with an annual rent of £50,000 or less would save an average total of £450 over the two years, with Labour reversing a 1% cut in corporation tax to cover the costs.
However, retailers and brands Drapers spoke to said this did not go far enough.
Barry Johnson, owner of premium menswear retailer Cockney Rebel in Worksop, Nottinghamshire, said: “Anything is better than another increase, but if something is going to be done to kick-start the high street it needs to go further.
“It’s a nice little gesture but they are only after votes. They need to say they will make cuts, and make it substantial, if they want us to believe them. There’s not a town in the country that wouldn’t want a reduction in business rates.”
Steve Cochrane, managing director of Middlesbrough department store Psyche, applauded the principle of using corporation tax, which is based on profits, instead of business rates, but insisted it should be rolled out more widely.
“Why should it be limited to smaller businesses? Bigger businesses employ more people and pay more taxes so we should be helped out as well,” Cochrane said. “Rates are one of our biggest bills – why should we not be helped out with something so punitive?”
Head of UK for young fashion brand Merc, Andy Tompsett, said using corporation tax to offset the measure was “robbing with one hand but giving it back with the other”, although agreed it might help reduce vacancy rates on the high street.
Former Wickes and Focus DIY boss Bill Grimsey, who called for business rate reforms in his recent report on the future of the high street, said the pledge was “a big step forward” but insisted more work was needed to make the system “fit for purpose”.
“We need a revaluation now and much more frequently to make it fair,” Grimsey said. “At the moment it just feels like businesses are seen as cash cows for the Government to squeeze as much out of as possible.”