The big four grocers are among more than 100 of Britain’s biggest companies that have called for the controversial business rates system to be overhauled in an open letter published today.
A vast array of retailers including Morrisons, Tesco, Asda and Sainsbury’s are joined by companies outside the retail sector, including General Motors and Tata Steel, in an open letter that was published in the Daily Telegraph today. Coffee shops, bookmakers, gyms and property companies have also signed their support, demonstrating the collective concern over the issue from across industries for the first time.
Led by the British Retail Consortium, which is currently heading a large-scale initiative to tackle the business rates system, the letter says the system is “a critical problem for all British businesses”.
The letter urges political parties to tackle business rates reform in the run-up to the General Election next year.
It says: “It is no longer an option to say that reform is too difficult or complicated and we call on all political parties to commit to fundamental reform in their manifestos for the next General Election.”
It restates results from a recent survey that 93% of MPs agree that “fundamental reform” of the business rates would boost high streets and town centres.
The letter says: “Manufacturers, retailers, the hospitality trade, property, service industries and businesses large and small are all held back by business rates.”
Business rates are a huge burden for retailers who say the high bills restrict investment and job creation, while rates have been blamed for struggling high streets.
Chancellor George Osborne has committed to a review of the tax by 2017 but retailers believe it needs to be tackled sooner. The delay to the 2015 revaluation, which is now set to take place in 2017, has also been a huge cause for concern as it means many retailers are paying business rates based on property valuations at pre-recession levels.
Jerry Schurder, head of rating at Gerald Eve, said: “It is clearer than ever that businesses across the spectrum are challenging the rating system which, if left unaddressed, will continue to severely impact on enterprises of all sizes and sectors and cause harm to the UK as a place to operate from.
“A property-based tax remains the most appropriate means of raising revenue for local services but it needs significant reform to make it fit for purpose.
“George Osborne must use December’s Autumn Statement to announce an expansion of the terms of reference of the ongoing review of business rates administration to encompass comprehensive reform of rates, with the aim of creating a system that genuinely supports investment and gives businesses a fair deal.”
As the Daily Telegraph has consistently pointed out, the current system of business rates is no longer fit for purpose for the 21st Century. Business rates are higher than property taxes anywhere else in Europe and are the second highest in the OECD. This is a critical problem for all of British business.
A recent survey demonstrated that 93% of MPs agree that the fundamental reform of business rates would revitalise our high streets and town centres. Manufacturers, retailers, the hospitality trade, property, service industries and businesses large and small are all held back by business rates.
A modern, sustainable and transparent system would unleash investment that could bring skilled and entry level jobs and new and expanded businesses into our local communities.
Those who seek a competitive tax regime as a draw for investment and jobs should apply that logic to business rates.
It is no longer an option to say that reform is too difficult or complicated and we call on all political parties to commit to fundamental reform in their manifestos for the next General Election.
British Property Federation
Federation of Small Businesses
National Hair Dressers’ Federation
Association of Licensed Multiple Retailers
Risk Capital Partners
John Lewis Partnership
Westminster Property Association
Insite Asset Management
New River Retail Ltd
Picton Capital Limited
Crabtree & Evelyn
Freight Transport Association
Business Centres Association
New West End Company
Forum for Private Business
British Aggregates Association
Henderson Real Estate
Rural Shop Alliance
Recruitment & Employment Confederation
Cushman & Wakefield
UK Petroleum Industry Association
The Buildings Futures Group
British Chambers of Commerce
3 Sisters Food Group
Association of Convenience Stores