The bosses of some of the UK’s biggest retailers have urged chancellor Jeremy Hunt to freeze business rates as part of his autumn statement this week.
Chief executives from Tesco, Sainsbury’s, Iceland and Greggs were among the signatories on a letter from the Retail Jobs Alliance, which warned that business rates were putting retailers at “breaking point”.
The letter warned increasing business rates – the duty will rise in line with inflation in April without government intervention – “risks pushing some retailers under”.
The letter said: “Without intervention, [business rates] are set to rise with inflation by over 10% in April, the same time as the energy support is set to expire.
“Analysis from our members suggests the real-terms cost impact on shops could be up to 20% due to the impact of inflation and transitional relief. This risks pushing some retailers under and will feed through to inflation.”
The letter came as Marks & Spencer boss Stuart Machin called business rates “daylight robbery” and launched an impassioned plea to Hunt to help high street operators.
Writing for The Mail on Sunday, Machin said: “Running a shop costs a lot more than running an online business, and a large part of that is down to business rates that have zero link to profits or, indeed, reality. It’s why the total tax rate for retailers is around 70% and why it pays 25% of all business rates despite being 5% of the economy.
“And it’s why high streets and city centres are increasingly full of vacancies and dodgy shops; rates have gone up by the same amount as retail property values have gone down. Frankly, it’s daylight robbery.
“As retailers, our job is to innovate and take the tough decisions to keep our businesses going and – if we can – growing in really tough times. So we can keep employing millions of hardworking people; support UK farming, which is on life support; invest in our stores so they carry on acting as anchors across the country; and support the public purse.
“As we look ahead to this week’s fiscal update, all we ask from the government is a fair shot, and that means reducing the rates multiplier back to its original 1990 level from over 50p in the pound down to 35p in the pound. We don’t want handouts – we just want fairness.”
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