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Stores write to Chancellor

Scottish retailers join call to ‘fix broken business rates system’

empty shops in Glasgow

Action is needed to stem rise of empty shops, say retailers (pic: Terry Murden)

Scottish retailers have echoed calls by major store owners south of the border for further reform of business rates to help stem the crisis on the high street.

More than 50 major retailers have written to Chancellor Sajid Javid to demand the Government takes action to fix what they call the “broken” business rates system.

They have called on the Government to put business rates at the heart of a promised new economic package. The letter, coordinated by the British Retail Consortium, has been signed by major retailers including the CEOs of supermarkets, food-to-go, fashion, homeware, and department store retailers. 

Business rates is devolved to the Scottish Government and David Lonsdale, director of the Scottish Retail Consortium, has urged the Holyrood administration to take similarly “firm action”.

April’s increase in the poundage rate added £13.2 million to the rates bills of Scottish retailers.

– David Lonsdale

In a statement this morning, he said: “The burden of business rates remains onerous here in Scotland too. The poundage/tax rate is at a 20-year high and 20,000 commercial premises in Scotland – of which a quarter are retail – are paying more for the large firms’ rates supplement than competitors or counterparts down south.

“April’s increase in the poundage rate added £13.2 million to the rates bills of Scottish retailers. Firm action is needed to reduce this burden, return the large business rates supplement to parity with England, and scrap legislative plans for a levy on workplace parking.”

Retail remains the largest private sector employer in the UK, employing approximately three million people. The industry accounts for 5% of the UK economy, but the BRC says it is burdened with 10% of all business taxes, and 25% of business rates.

The letter asks for four fixes that would address many of the challenges posed by business rates:

  • A freeze in the business rates multiplier;
  • Fixing transitional relief, which currently forces many retailers to pay more than they should;
  • Introducing an ‘Improvement Relief’ for ratepayers;
  • Ensuring that the Valuation Office Agency is fully resourced to do its job.

The letter notes that implementation of these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at least some of the bureaucracy of the current system.”

Helen Dickinson, chief executive of the BRC, said: “These four fixes would be an important step to reform the broken business rates system which holds back investment, threatens jobs and harms our high streets. The new Government has an opportunity to unlock the full potential of retail in the UK, and the Prime Minister’s economic package provides a means to do so.

“The fact that over fifty retail CEOs have come together on this issue should send a powerful message to Government.”

She said that swift action “would send a clear message that the new Government understands the needs of local communities and that it will act decisively to support the jobs of the country’s largest employer”.

The letter comes the day after BRC-Springboard data showed that UK vacancy figures had risen to 10.3%, the highest since January 2015. It also comes shortly after the BRC-KPMG Retail Sales Monitor showed the 12-month average sales figures dropped to their lowest level on record, at 0.5%

Signatories include: British Retail Consortium, Ann Summers, ASDA, B&Q, BIRA, Booksellers Association, Boots UK, Card Factory, Carpetright, Central England Co-operative, Company Shop Group, Costcutter, Debenhams, Deichmann Shoes, DFS, Dixons Carphone, Dreams, F Hinds, Fenwick, Greggs, Harrods, Henderson Group, Iceland, J Sainsbury’s, John Lewis Partnership, Marks & Spencer, McKesson UK, New Look, Pret A Manger, Primark, Retra, Rigby & Peller, River Island, Savers Health Home & beauty, Scottish Midland Co-operative Society, Screwfix, Spar UK, Specsavers, Steinhoff UK, Superdrug Stores, The Association of Convenience Stores, The Body Shop International, The Co-operative Group, The Hamleys Group, The Original factory Shop, The Paint Shed, The Perfume Shop, Whittard of Chelsea, WH Smith, Wm Morrison Supermarkets, Well Pharmacy.



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