Retailers ask Javid to freeze business rates

Photo: REUTERS/Henry Nicholls

More than 50 British retailers, including Sainsbury’s, Marks & Spencer, Asda and Morrisons have urged the government to freeze business rates to help out the struggling sector.

In a letter to the new Chancellor Sajid Javid, published on Tuesday, the retailers called on the government to take action to “fix the broken business rates system”.

Business rates are currently calculated according to the rental value of properties and have an annual inflationary uplift or multiplier.

The letter asks for a freeze in the business rates multiplier to stop another tax rise.

The retailers’ letter was coordinated by lobby group, the British Retail Consortium (BRC), which has for years complained the current system is unfair.

It points out that the industry is the largest private sector employer in Britain, employing about three million people. While it accounts for 5 percent of the UK economy, it is burdened with 10 percent of all business taxes, and 25 percent of business rates.

“This disparity is damaging our high streets and harming the communities they support,” said BRC chief executive Helen Dickinson.

Association of Convenience Stores (ACS) includes among the retail organisations signed the letter.

Speaking on the BBC Radio 4 Today programme ACS chief executive James Lowman said: “The business rates system is outdated and inefficient.

“We need to be incentivising businesses to invest, rather than penalising them when they do. Convenience stores provide essential services to their communities, many of which cannot be sustained on a standalone basis, it is vital that the government works to preserve these services and the stores that house them.”

The letter comes a day after BRC-Springboard data showed 10.3 percent of shops in Britain were vacant, the highest rate in four years, adding to the growing gloom in the sector.

Another survey from the BRC published earlier this month showed British retailers reported the weakest July sales growth since records began.

Last month new prime minister Boris Johnson announced a £3.6 billion pound fund to support town centres.

Javid is due to set out his spending plans for the 2020-21 financial year next month.