More than 50 major retailers in the UK have written to Chancellor Sajid Javid, demanding urgent changes to the country’s business rates system.
The letter, coordinated by the British Retail Consortium, has been signed by the likes of Asda, Sainsbury’s, the Co-op, Marks & Spencer, Iceland, Boots, Greggs, John Lewis, and Harrods.
The letter claims that the current system of business rates is outdated and affects investment in the retail sector, hurting jobs and communities across the country. It claims that the retail industry accounts for around 5% of the British economy but pays about 10% of all business taxes and about 25% of business rates.
The letter has called for a freeze in the business rates multiplier, the fixing of transitional relief, the introduction of an ‘Improvement Relief’ for ratepayers, and increased staffing at the Valuation Office Agency (VOA).
The letter notes: “The likelihood of a no-deal Brexit appears to be increasing, which we believe would place a considerable strain on retailers in the UK. In this context, the prime minister’s intention to pursue an economic package to boost business and investment in the UK is crucially important; we strongly believe that reform of the broken business rates system should be front and centre of that package.”
Helen Dickinson, Chief Executive of the BRC, noted: “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 50 retail CEOs have come together on this issue should send a powerful message to government.”
NAM Implications:
- As retailers move to breath-holding mode…
- …it is imperative that NAMs deal with the ‘here & now’.
- …by accepting and working with the fact that the High Street is in decline (terminal for some retailers)
- Larger retailers may have the negotiating muscle to go the CVA route and secure rent reductions.
- …but generally NAMs have to take a judgement call on how their customers will cope.
- And ensure that as NAMs they bear only a fair share of any pain involved.
