Retailers might be surprised by the BRC’s decision, revealed today, to review its approach to business rates and abandon its calls, made repeatedly over recent years, for a freeze in business rates.

Retailers might be surprised by the BRC’s decision, revealed today, to review its approach to business rates and abandon its calls, made repeatedly over recent years, for a freeze in business rates.

This should not be viewed as the BRC giving up on the issue but it is a recognition that its calls have always fallen on deaf ears. I am encouraged by the fresh approach that Helen Dickinson, the organisation’s director-general, is advocating on how to reduce the pressure on retailers caused by the existing excessive business rate charges.

In my view, the principal reason why the Treasury has never felt able to respond positively to the call for a freeze is the fact that the legislation limits annual increases in rates to no more than inflation as measured by the previous September’s Retail Prices Index. This means that if rates do not increase in one year, it will lead to a loss to the public purse not just for that year but for every year subsequently.

This is also an issue for those that are seeking a 2% cap on rates next year instead of the normal increase linked to this September’s inflation figure. July’s RPI, revealed yesterday, was 3.1%. If it remains broadly at that level until September, then any agreed 2% cap would mean the Government would receive around £250m less in business rates not just next year but every year thereafter – unless it changes the way in which business rates are set as prescribed presently in primary legislation.

The postponement of the planned 2015 revaluation did the sector no favours and it has condemned struggling high streets to two further years of excessive rates bills.

But, by itself, revaluation is not the panacea for the problems of the high street. Whilst revaluations ensure that the business rates paid by each occupier are fair by comparison with the amounts paid by other ratepayers, they do not necessarily guarantee fairness when measured against turnover or profits, or by comparison with rates paid by competitors able to operate from a lower cost base, or indeed from jurisdictions with lower corporation and other taxes.

The Government loves business rates because they are totally predictable, being the only national tax where the revenue is fixed in real terms. It is difficult to avoid or evade and has a very high collection rate.

If retailers are to be supported by lower bills, the Government has to be persuaded to accept a reduced tax take. Proponents for change will have to persuade the Treasury of the benefits of lower business rates such as increased receipts from corporation and personal tax and VAT, as well as a rejuvenated high street.

The BRC is well placed to provide the evidence-based research to present to all political parties so that the next Government is able to speedily implement change which will bring lasting benefits to bricks and mortar retailers.

Jerry Schurder is Head of Rating at Gerald Eve LLP, chartered surveyors and property consultants