Are business rates killing the British high street?

Retail industry leaders have criticised soaring business rates following a week of bad news for UK retail.

A total of 11,500 jobs are at risk under plans by House of Fraser to close more than half of its shops. The group’s department stores have been struggling under the weight of “staggering” business rates, City A.M. reports. 

Poundworld has also announced that it is set to appoint an administrator. The latest blows to the UK high street come less than a month after Marks and Spencer revealed plans to close 100 stores.

Labour has accused the Government of presiding over “high-street annihilation” by failing to ensure a fair business rates system, says the Norwich Evening News.

Business rates were increased across the UK in April, for the second year in a row, following a government review.

Tesco chief executive Dave Lewis said today that the current rates system puts traditional high-street retailers at a major disadvantage.

He told the BBC: “Are we allowing it to stay competitive, or are we by stealth lowering corporation tax and increasing business rates to a place which is creating an uneven playing field and forcing people to think about how it is they avoid that cost and find other routes to the market?”

Critics of the the business rate increases say they work in favour of online retailers such as Amazon, as their out-of-town warehouses are worth less than high-street property.

Lewis said business rates was the biggest tax that his company paid, adding up to more than £700m a year.

In 2017, Sainsbury’s chief executive Mike Coupe made similar complaints, describing the rates as “archaic” and called for “fundamental reforms”. He said that the supermarket giant was facing annual rates of about £500m.

Labour claims that in the first three months of this year, 21,000 jobs in the sector were at risk as a result of the punishing increases.

However, Business Secretary Greg Clark said the loss of stores was “by no means new in British retailing”, and that it was a continuation of “a story of constant change in the retail sector”.

Research from rates specialist CVS found that businesses in England and Wales face a total £1.2bn hike over the coming year. A large number of companies are heading to court for failing to keep up with growing payments, the site adds.


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