Retail industry hits out at 'disappointing' Budget

In today’s spring Budget, Chancellor Philip Hammond said there was scope to reform the controversial revaluation process as companies faced crippling rate hikes.

Although he added that the government would set out the “preferred approach in due course and will consult on it before the next revaluation is due”.

The Chancellor also pledged to find a “better way” of taxing the digital sector, while he also reaffirmed plans to increase the national living wage to £7.50 in April.

“We are heading for a bit of a retail disaster unless the government really understands the impact of what’s happening through the web and the costs of having bricks and mortar on the high street”

Philip Day, Edinburgh Woollen Mill Group

Philip Day, boss of Edinburgh Woollen Mill Group, which includes the Peacocks and Austin Reed chains, hit out at the Government.

“Personally I think that we are heading for a bit of a retail disaster unless the Government really understands the impact of what’s happening through the web and the costs of having bricks and mortar on the high street. The system is flawed.

“We need a government that is going to take some proper action to make a real difference to the future. In 2017 we’re going to have a tough year; we’re going to see a lot of retailers under the cosh.

“Big retailers are not making any money; they generate all these taxes but fundamentally they are going to be left out in the cold. It really is quite a serious issue.”

‘Analogue tax’

Mike Coupe, group chief executive at Sainsbury’s, said: “Business rates are an analogue tax, not fit for the digital age. The UK needs wholesale reform of business taxation.

“We would ask the Government to carry out a root and branch review of business taxation to create a level playing field across all businesses, rather than penalise property-based companies”

Mike Coupe, Sainsbury’s

“We would ask the Government to carry out a root and branch review of business taxation to create a level playing field across all businesses, rather than penalise property-based companies.”

Ian Filby, chief executive of DFS, echoed Coupe, adding that business rates were fundamentally flawed and needed overhauling. “They are a property rate, not a business rate.

“At least they said there was scope to look at online [businesses], which would break the link to property.”

Helen Dickinson, chief executive of the BRC, said: “Any review needs to incorporate business tax in its entirety and not be constrained by the technicality of fiscal neutrality around business rates.

“£435m is a drop in the ocean compared with the £25bn a year that the tax raises. This is yet another sticking plaster on a chronically ill patient – an unsustainable property tax higher here than anywhere in the developed world”

Helen Dickinson, BRC

“We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily.

“However, more short-term relief measures continue to add complexity to an already impenetrable system.

“£435m is a drop in the ocean compared with the £25bn a year that the tax raises.

“This is yet another sticking plaster on a chronically ill patient – an unsustainable property tax higher here than anywhere in the developed world.”

Sir Peter Rogers, chairman of the New West End Company, said: “We are disappointed by the Chancellor’s announcement. He has missed the opportunity to deal with a major concern for London businesses.

“The short-term relief he announced will have no impact on the majority of the companies in London and the West End which will suffer massive tax increases on 1 April. This will mean closures and job losses.”

‘No comfort’

Tim Beattie, head of rating at global property consultancy JLL, said the Budget provided no optimism for the industry.

He said: “Philip Hammond indicated that he was prepared to listen to the concerns of those most negatively affected by the business rates hike, but what has offered will provide no real comfort and is a missed opportunity to implement the changes that are urgently required. 

“There will always be winners and losers. There’s no perfect solution [to business rates]. Someone is always going to lose out”

Retail veteran Ian Giles

“He has largely ignored the impact on London, which will still see large increases in both the retail and office sectors for most businesses.

“The announcement that business rates will be reformed is on the face of it welcome news.

“However, businesses will be frustrated that they have been told they will have to wait until the next revaluation in 2022 before any real changes are made.

“This is far too little too late and businesses will conclude that Mr Hammond was not listening after all.”

Retail veteran Ian Giles said: “There will always be winners and losers. There’s no perfect solution [to business rates]. Someone is always going to lose out.”