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Retailers ask Osborne to cut rates and ignore living wage calls

Retailers have urged the chancellor to put an end to stifling business rates and eschew calls for the living wage in next month’s emergency budget.

Earlier this week, the British Retail Consortium called on George Osborne to support retailers in his emergency budget on July 8 by introducing new measures to boost productivity rather than enforcing higher wages for staff. The BRC said the government should help employees to progress to more productive jobs by supporting skills acquisition and targeting low earners with lower taxation “rather than artificially inflating pay”.

The minimum wage is currently £6.50 and will rise to £6.70 in October. The living wage, calculated by the Living Wage Foundation, is £7.85 or £9.15 in London.

Steve Cochrane, founder of Middlesbrough indies Psyche and Style Lab, said the implementation of the living wage would hit his business hard. He added: “There’s lots of talk about the living wage, but there’s so much disparity between the cost of living in the north and in London and other major cities. You can’t apply a one-size-fits-all approach. The minimum wage goes up every year anyway. There doesn’t seem to be any let-up. When is it all going to end?”

The BRC also highlighted business rates as a priority for the government, after the retail body recently revealed that inaction on rates could see as many as 80,000 shops across all sectors close by 2017. In March the Treasury said the business rates system would undergo a “radical” review with findings expected to be released before the next budget in 2016.

Jaeger chief executive Colin Henry said that if the government is serious about supporting UK retail, they need to address the outdated business rates system.

“Digital retailing is clearly a mainstay but the importance of the high street must not be overlooked, particularly for luxury brands like Jaeger, because customers want to see and feel the product and enjoy a personal retail experience. The current system puts bricks-and-mortar retailers at a disadvantage and is choking the UK high street. I want to see a more definitive timeline for change and a serious commitment to overhauling this system.”

Cochrane said the biggest issue he wanted at the top of the agenda was the government to tackle “rates, rates, rates”. He added: “Rates are so out of kilter. At my new store [Style Lab, which opened in October 2014], I’m paying almost four times as much in rates as I am in rent. It’s not a level playing field with etailers.”

Long Tall Sally chief executive Andrew Shapin said he wanted a “reduction in rates” to be announced as part of the budget.

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