It is ironic that business rates have shot to the top of the news agenda at the same time Amazon has pledged to create 5,000 more UK jobs.
While swathes of retailers, pubs and restaurants are wailing over the impact that April’s changes will have, the US etail giant is pushing ahead unencumbered with investment – in the form of thousands of additional full-time roles.
Amazon has been on a PR push for some time in order to highlight the number of jobs it creates in the UK.
As a result of its latest hiring effort, the etailer’s UK workforce will swell to more than 24,000.
“When the system punishes traditional retailers simply for having shops, then the system is bust.”
A cynic may suggest Amazon has been going into PR overdrive to divert attention away from long-running criticism of its UK tax arrangements.
Nevertheless, it is impressive that at a time of belt-tightening across much of the retail sector, the etailer is investing so heavily in its workforce.
UK-based high street retailers who are suffering at the hands of the business rates revaluation point to the inequity of the current system.
By their very nature, pureplay etailers do not pay as much in business rates, simply because they don’t have a physical estate – just warehouses.
And the pill will have been even more bitter for Amazon’s rivals after reports that it will see a reduction in rates at six of its nine distribution centres.
Clearly, when the system punishes traditional retailers simply for having shops, then the system is bust.
As Liberal Democrat leader Tim Farron says: “It is utterly scandalous that Amazon’s business rate are to be cut while 500,000 other businesses across UK see rises.
“UK-based high street retailers who are suffering at the hands of the business rates revaluation point to the inequity of the current system”
“Business rates are an outdated system that disadvantages the high street and favours businesses like Amazon. Enough is enough.”
There might yet be some respite for retailers hit by the changes in next month’s Budget.
Tory MP and the party’s vice-chairman Mark Field told the BBC yesterday that Chancellor Philip Hammond is likely to offer some kind of olive branch on business rates, following this month’s wave of negative press coverage.
Field suggested a “smoother” transition period to the new rates.
However, it appears unlikely the government will announce a major overhaul, or change its stance on etailers.
Despite repeated calls by the British Retail Consortium for a shake-up, it seems just too short notice for the government to act in time for the Budget.
So my message to aggrieved retailers would be to carry on taking the fight to government, but don’t lose sight of the fact that there is a bigger battle to fight – in trying to compete with the likes of Amazon.
Keeping an eye on the competition is of course fundamentally good practice, but concentrating on what sets you apart from the crowd is also important.
Business rates may be unfair for some, but staying optimistic and getting retail basics right must be the key in the short-term.