• BRC renews its call for structural reform of business rates system
  • Business rates, living wage and apprenticeship levy will add £14bn to retailers’ costs over five years
  • Impact on jobs could be ’significant’

Retailers face extra costs totalling £14bn over the next five years as a result of Government policies introduced since the general election.

The sum, reflecting forecast business rate rises, the introduction of a national living wage and an apprenticeship levy, was calculated by trade body the BRC, which reiterated its call for structural reform of the business rates system.

The retail industry’s rates bill is expected to rise from £7.8bn at present to £8.8bn by 2020 based on HMRC forecasts.

Without mitigation, and assuming wage differentials are maintained, the national living wage would increase retail’s wage bill by approximately £2.5bn a year.

The cost of the apprenticeship levy will be £126.8m in its first year and the BRC has applied a compound average growth rate of 1.4%.

In a briefing paper ahead of Chancellor George Osborne’s autumn statement, the BRC said: “We support investing in wages and are working out how to absorb these increases.

“But the retail industry is not in a position to countenance any increased costs and we need to work with the Government to mitigate the effects, on the costs for us and on the social and employment impact for them.

“It’s too early to be definitive but we believe that the impact on jobs and therefore social cost could be significant, especially in vulnerable areas, in two to four years from now.”

Chancellor George Osborne has proposed to devolve business rates to local authorities but the BRC does not believe that idea represents structural reform.

It said: “In this year’s autumn statement the Chancellor should recommit to the structural review [of the rates system] and to work with our industry to achieve it.”

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