While the case for real reform of the business rates system is clear for Government to see, finding the right moment amid the spider web of fiscal and political challenges has pushed fundamental reform out of our reach for now.
With Brexit at the forefront of pretty much all current political thinking and gloomy growth prospects, we were never going to see a big business rates rabbit pulled out of the hat.
We were right to put laser-like focus on what was achievable against this backdrop. So we led the chorus of voices speaking up for action to mitigate rising rates bills. The Government listened.
Fundamental reform it may not be, but the Chancellor’s announcement to bring forward the switch from RPI to CPI indexation is soft music to the industry’s ears, particularly when considered in the context of all the other pretty pressing government priorities.
Sometimes you should just take what you can get.
Worth £210m to retailers alone in the next two years, for some, particularly those in more economically vulnerable communities, it may serve as a lifeline between an opening or closing marginal decision; helping stem further shop closures and job losses.
For others, it is money that otherwise would have disappeared off to the Treasury, now staying in retail businesses for investment in the needs of customers.
“We take a moment to celebrate a tactical success but also remain rooted to the more strategic. The relief in the Budget will but scratch the surface of the iniquity of the current system”
Such investment will be more crucial than ever as consumer spending, which accounts for nearly two-thirds of the UK economy, is squeezed further by inflation that continues to outstrip wage growth.
The downgrading of UK’s GDP, now expected to record just 1.5% growth in 2017 and falling again to 1.4% in 2018, certainly presents a sober outlook and means retailers can expect another year of tough trading conditions ahead.
Another welcome attempt to blunt the burden of rates rises came from the Chancellor agreeing to increase the frequency of revaluations to every three years from 2022 and ruling out the requirement for businesses to go through a costly and unfair self-assessment of their property.
Again something we’ve been arguing for.
We take a moment to celebrate a tactical success but also remain rooted to the more strategic. The relief in the Budget will but scratch the surface of the iniquity of the current system.
As long as UK business rates remain higher than in any other major economy, they will continue to drag on retail investment.
The fight continues
The way the world’s economies and businesses operate today is very different from the way in which they operated in the past.
The historic link between the economic success of a retailer and its physical footprint is gone. Today, the retail experience and the very structure of our industry is transforming. It is more complex, more digital and more dynamic.
Whether the steps in the Budget mark movement towards a reformed and more financially sustainable business taxation system over the years ahead which will support, rather than hinder, that transformation remains to be seen.
So our job and the job of the BRC is clear. We have to continue to help policy-makers understand the significance and profound nature of change underway in retail.
We have to help them recognise that the answer to the business rates conundrum does not lie within the business rates envelope, but within a holistic look at business taxation and how that should work in a modern economy.
Looking ahead to the longer term, boosting confidence and productivity in a climate of slowing growth, Brexit and wider uncertainty will need to go hand in hand with Government policy.
Taxation, skills and talent development, responsible business, and investment in existing and emerging technologies are all part of that.
So if you’re not a member, maybe today is the day to join us.
One thing I’ve learnt after five years of doing this job is the more people you have saying the same thing, the more chance of success you have.
Helen Dickinson is chief executive of the British Retail Consortium