Retailers have slammed calls outlined in the Grimsey Review for them to invest hundreds of millions of pounds into a high street levy at a time when they are already battling heavy tax burdens.
Retailers including John Lewis Partnership, Carphone Warehouse and Home Retail have blasted the proposal, unveiled this afternoon at a Parliamentary Reception as part of the Grimsey Review, that calls on retail and leisure chains with a turnover of over £10m to invest 0.25% of their UK turnovers in 2014 as a one-off levy. This would be paid into a local economic development fund.
Carphone Warehouse chief executive Andrew Harrison said: “Getting people to stump up money to try and protect places that there is no demand for is a step too far.”
Waterstones managing director James Daunt said retailers already contribute “massively and disproportionately” to the high street via business rates. “It’s lamentable,” he said. “This could quite literally bankrupt a few people.”
Argos owner Home Retail chief executive Terry Duddy said one of the key issues facing retailers is “burdensome taxes” including busienss rates. “I don’t necessarily think we need another tax,” he said.
A John Lewis Partnership spokeswoman welcomed the review to revitalise high streets but said: “Any new approach must avoid penalising one particular part of the retail sector.”
She said: “Whilst we certainly welcome proposals that seek to revitalise high streets and help them flourish, we do not think the idea of a new one off levy on larger retailers, is the answer. Any new approach must avoid penalising one particular part of the retail sector. We do however, welcome proposals to reform business rates and parking charges.”
Unveiled as part of the Grimsey Review, in which former Focus boss Bill Grimsey made 31 recommendations to Government to revive the high street, the levy would apply to 522 retailers and 120 large leisure businesses with total turnover of £196bn and £15bn respectively.
Value retailer 99p Stores’ commercial director Hussein Lalani said he “supported the spirit of the idea” but said the sector already contributes a lot to the economy through VAT and employment.
British Retail Consortium director general Helen Dickinson said: “There is increasing agreement on what needs to be done to revitalise town centres. We all agree that retail businesses are paying too much in tax. That is why we believe a new levy on large retailers is not the answer, and a complete reform of the business rates system from top to bottom is essential for the future prosperity of our town centres.”
One large retailer said Grimsey was “having a laugh”. Fashion retailers including Hobbs and Bonmarché are also opposed the levy.
Grimsey said: “I’m calling upon the industry to recognise they have had 25 years of boom and as town centres need to be restructured we need funding to get this community approach out there.”
He said that he didn’t expect retailers to agree to the levy but said: “If I can get one or two big guys it might come off.”
The ‘alternative’ review to the Government-backed Portas Review by retail expert Mary Portas has also called for a freeze on business rates from 2014, the creation of town centre commissions which would run the area like a business, a freeze on car parking charges and ‘networked’ digitally reactive high streets.
A spokesman for the Department for Communities and Local Government said: “Local firms already pay VAT, business rates, corporation tax and National Insurance. We have no plans for introducing a new tax which could push up the cost of living and make shopping more expensive for hard-working people.
“Instead, this Government has been supporting small shops, giving them a helping hand by cutting their business rates, their National Insurance and their corporation tax, and we have been supporting a range of projects to encourage innovation and best practice in local high streets.”