The bosses of over 50 retailers including Marks & Spencer (MKS.L), Asda (WMT) and Boots (WBA) have urged the government to freeze business rates in an effort to save the struggling British high street.
In an open letter to new chancellor Sajid Javid they call for rate changes to be put “at the heart” of the economic package promised by prime minister Boris Johnson to boost business as Britain leaves the European Union.
The group letter, coordinated by the British Retail Consortium, pointed out that the retail sector accounted for 5% of the economy but paid 25% of all business rates —effectively a property-based tax
Helen Dickinson OBE, CEO of the British Retail Consortium, 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. Retail accounts for 5% of the economy yet pays 25% of all business rates – this disparity is damaging our high streets and harming the communities they support.”
Clive Lewis, the Chairman of River Island also said:
“We welcome the BRC proposals which offer short term solutions that can introduced quickly and will have immediate benefits to the struggling retail sector. In particular, the removal of downwards transition will allow all retail businesses to pay a tax which more accurately reflects the value of their properties.
The burden that rates places on all high street businesses not only stifles growth but is a major contributor to the closure of stores and the resulting decline in towns across the country.”
This comes a day after a British Retail Consortium and Springboard survey found that the number of empty shops on high streets has hit the highest level since January 2015.
Everything from bookmakers, grocers, and clothing stores have felt the pinch and have been closing stores in the last few years, as Yahoo Finance UK has previously reported.
Bookmaker Ladbrokes is shutting 1,000 shops and axing jobs as more gamblers move to online gaming.
And Tesco is axing 4,500 jobs and making its Tesco Metro convenience stores leaner.