The government’s decision to postpone the next business rates revaluation will benefit supermarkets to the tune of £1.3bn at the expense of independent shops and small fashion retailers, the Business, Innovation and Skills select committee heard yesterday (October 29).
In a strong attack of the Government’s decision to delay the next business rates revaluation, Grimsey said that action was needed urgently on the issue or the poorer high streets would face more closures in the next two years.
He said: “Retailers in this country are undergoing financial pressure which they will not survive; it doesn’t matter how good their product is. There are 20,000 retailers out there that are poised to fail as a result of business rates. The system is fundamentally wrong and needs to change”.
Last year the Department of Communities and Local Government attracted widespread criticism from retailers when it announced it was to defer the rates revaluation, which was due to take place this year, until 2015. The decision means rates will continue to be based on 2008 rental levels, since when rents have fallen by as much as 50% in the hardest-hit locations.
Grimsey’s comments were made during his appearance at a hearing of the Bis select committee on Tuesday morning to discuss a range of issues on the high street including the decision to delay the revaluation.
He used the session to announce new findings showing that as a result of the decision the UK’s four biggest supermarkets, Tesco, Sainsbury’s, Asda and Morrisons - whose overall rates payments would have increased in 2015 - will save £1.3bn from the postponement.
The retail veteran said that rather than supporting independent shops and small retail businesses, the government’s decision to postpone the revaluation has hit the poorest areas hardest.
“The beneficiaries of this are the big retailers and the supermarkets,” he said. “This government said that it’s a champion of SMEs yet its actions have been completely the contrary. The small [businesses] in the North of England are suffering”.
“I have no sympathy for the supermarkets and large retailers; they didn’t have any concern for small retailers when they went out of town and busted them”.