A coalition of hospitality, retail and leisure organisations have written to the Chancellor urging him to freeze the business rates multiplier and extend existing reliefs for a further year at the upcoming Autumn Statement.
The British Retail Consortium, UKHospitality, Association of Convenience Stores, British Independent Retail Association and ukactive are warning that businesses, jobs and the future of high streets are at risk without the measures.
The sectors combine to pay more than £10bn in business rates a year. The inflation-linked increase to the business rates multiplier will cost retail businesses £480m and hospitality businesses £234m. An end to current relief will cost hospitality £630m and retail £750m.
In a survey of BRC members, 66% of retailers responded that they were ‘very concerned’ about an increase in business rates, with 69% saying it would place ‘significant pressure’ on the prices paid by customers.
A recent survey of UKHospitality members showed that 66% of businesses would reduce investment, 61% would raise prices, and 41% would reduce opening hours if rates relief was removed. Members of ukactive reported that 75% were ‘extremely likely’ to have to increase customer pricing in the next six months, with 88% having already been forced to raise prices over the past year.
The joint letter warns of the ramifications of such dramatic increases in business rates: “An inflationary increase in the business rates multiplier and removal of reliefs would be disastrous for our sectors. It will mean business failures, job losses and boarded-up properties in our high streets, denying people their livelihoods and their social pleasures.”
Helen Dickinson, Chief Executive of the British Retail Consortium, commented: “Retailers are staring down the barrel of a £480 million-a-year hike in their business rates bills from next Spring.
“Such a hefty increase will threaten to put renewed pressure on retail prices, as well as block new investment in our town and city centres. It is essential that the Chancellor uses the Autumn Statement to freeze business rates and give our local communities a fighting chance to thrive.”
Kate Nicholls, Chief Executive of UKHospitality, added: “Freezing rates and extending relief will be a lifeline for a sector that simply cannot absorb anymore costs. Inaction will leave hospitality businesses with no choice but to put up prices, open less or, in the worst-case scenario, shut their doors for good.
“Pubs, restaurants, cafes and hotels, to name a few, act as pillars of their communities and they want to continue in that central role, as well as driving economic growth and providing countless jobs. Action on business rates at the Autumn Statement is critical to that.”
NAM Implications:
- Under current government ambitions…
- …the money has to come from somewhere.
- i.e. the pockets of either the consumer taxpayer…
- …or Corporation Tax/reductions of Relief.
- If so, the consumer demand will be depressed further.
- (Which do you expect in a pre-election year?)
