In retail, we all know that you don’t get many opportunities to predict the future accurately. There just aren’t many times when you have access to a reliable crystal ball.
In retail, we all know that you don’t get many opportunities to predict the future accurately. There just aren’t many times when you have access to a reliable crystal ball. But the announcement of September’s RPI figure today is one of those rare moments when we know exactly what the future holds for retailers. And it’s bad news for their business rates.
The headline RPI figure of a 3.2% rise hides a story of real struggle on our high streets. Across the country more than one in ten shops currently stand empty. Every day, retailers I speak to are having to make decisions about whether they can open a new shop, or whether they will have to close an existing one, not based on the rent they can negotiate or quality of the offer they have for their customers, but simply on whether they can bear the high cost of the tax they will have to pay on their property.
As reported elsewhere in Retail Week today, new analysis commissioned by the BRC has shown that if this rate increase goes ahead as planned, retailers are going to be paying £3.44 in business rates for every £1 they pay in corporation tax in 2014. That’s 96p more for every pound than retailers paid in 2005.
We all know that this increase will stop investment in high street property and jobs in local communities. This increase alone could put at risk the creation of nearly 20,000 new full-time jobs. The business rates system is no longer fit-for-purpose. This projected rates increase is just another nail in the coffin of an outdated system. And that is why the BRC is campaigning hard for a complete review.
We have commissioned work over the coming months to examine what a top to bottom reform of the system should look like. This needs to be a reform that will work for all retailers: large or small, independent or multiple, online, offline, or omni-channel. So we will be working in an open and inclusive way, inviting opinion and debate from across the sector and we will have more to say on this shortly.
Today’s RPI announcement shows the urgency of the problem we all face. But it is also a massive opportunity to persuade Government that business rates really do have to change. And I’m excited by what we can achieve on this together.
- Helen Dickinson director-general, British Retail Consortium