More than 50 high street retailers have written to the Chancellor calling for urgent action on business rates reform, having lost £500m to transitional relief since 2017.
The letter, co-ordinated by the British Retail Consortium, calls for the government to take the steps towards fixing transitional relief as part of a fundamental business rates reform in the Budget.
Signatories include Debenhams chief executive Stefaan Vansteenkiste, Fenwick chief executive Robbie Feather, New Look CEO Nigel Oddy and Primark chief executive Paul Marchant.
It notes that retail accounts for 5% of the UK economy and contributes 10% of all business taxes and 25% of all business rates revenue. However, labelling the business rates system “broken”, the letter calls for the government to “scrap downwards phasing [of transitional relief] so that businesses in the north and other parts of England immediately pay their ‘true’ rate liability”.
It estimates that: “This would cost £295m for 2020/21 and, if the legislation bringing forward the next revaluation to 2021 is not passed, £200m in 2021/22.”
Helen Dickinson, chief executive of the BRC, said: “The future of retail is an issue that matters to people everywhere – it employs 3 million people and serves the needs of the entire country. Yet transitional relief undermines both the industry as a whole, and many regions that it serves. Northern high streets effectively subsidise London banks, forcing a £600m transfer of wealth to the capital; this could be used to support investment in people and technology that would benefit all parts of the UK.
“Every year, retail faces higher and higher business rates bills, holding back much-needed investment in an industry that is transforming at a dramatic pace. Swift action at the upcoming Budget would show the Chancellor was serious about levelling up all parts of the UK and supporting a retail industry towards realising a brighter future.”
Eric Mazillier, UK CEO of sports retailer Decathlon, added: “The business rates system is broken and in urgent need of fundamental reform. It undermines investment in shops, damaging job creation and hurting high streets and town centres. Fixing the complex transitional relief scheme would be a good start.”