Darling’s 11th-hour move only grants temporary relief, top retailers argue

Retailers have welcomed Chancellor Alistair Darling’s deferral of a business rates rise but argue the measure is not sufficient to alleviate rising cost pressures.

Darling’s 11th-hour decision to cut the planned rise from 5 per cent to 2 per cent and defer the remainder followed Retail Week’s Rate Rage campaign to stop the Government increasing rates in 2009 and 2010.

Tesco executive director of corporate and legal affairs Lucy Neville-Rolfe said: “We urge Government to follow this useful first step with further action – including deferring the 2010 revaluation and greening business rates. This will help put British business in the strongest position to fight its way out of the recession.”

New Look chairman Phil Wrigley said it was “encouraging that the Government seems to have listened to retailers’ concerns and acted”.

Wrigley hoped the deferral indicates that the Government will reassess the rateable value revaluation, taken at the top of the market, which could lead to higher rates next year “at a time when we all hope to be supporting economic recovery”.

Businesses will now have to pay only 2 per cent of the annual increase this year, with the remaining 3 per cent spread over the next two years. However, the changes, which are applicable in England, may not come in until August and will not be automatic.

Kingfisher group chief executive Ian Cheshire said: “For some smaller retailers it could be the difference between survival and failure. Ideally we would have liked to see a reduction rather than a deferral.”

JJB executive chairman Sir David Jones said: “The Government could have done more.”

An M&S spokesman said: “We welcome this and any measure that helps retailers during this challenging time for the high street.”

BRC director-general Stephen Robertson said the Chancellor has “only taken a first step”. “The timing has changed but the eventual costs haven’t,” Robertson said. “He still plans business rates increases totalling £1.6bn by 2010/11 – that’s 30 per cent more.”

  • Stephen Robertson’s column went to press before the Chancellor’s announcement.

Relief on shopping centre service charges

A consortium of the country’s top retailers and landlords has come up with a scheme to cut shopping centre service charges by as much as 20 per cent.

Both sides agreed a “new perspective” was needed and drew up the guidelines after a pilot at four centres, which delivered reductions of at least 10 per cent.

Headed by Arcadia property director Chris Harris and Land Securities managing director Richard Akers, the consortium has published a list of recommendations to landlords. The guidelines include reviewing centre operating hours, re-evaluating waste management strategy and sharing services between landlords and retailers. See retail-week.com for the full 10-point plan.