Chancellor ignores pleas of retailers to freeze business rates

Chancellor George Osborne gave no indication in his Autumn Statement that he has listened to the demands of retailers or intends to freeze business rates for 2013, leaving Britain’s hard-pressed shop keepers to face a £175million bill next year.

This is despite the fact that a poll conducted across the three main political parties on behalf of the British Retail Consortium revealed that two-thirds of MPs support a business rate freeze. Three quarters of them say costs must be controlled in order to stimulate growth.

The majority of MPs polled also said they had noticed a deterioration in the High Streets of their constituencies and agreed with calls for a fairer and more predictable system for managing future rates increases.

The British Retail Consortium, Retail Week magazine, Spring Fair International and other champions of the retail trade have spent the past few months lobbying the Government to stop the 2.6% increase that is scheduled to come into force in April.

Almost 1,500 people have signed a petition calling for both an immediate rates freeze and a fairer way of calculating future rates against Consumer Price Index rather than the Retail Price Index (RPI) currently used. Linking business rates to the RPI has led to them doubling over the last 20 years.

Small businesses business rate relief will, however, be extended for another year to April 2014 according to the Chancellor. Corporation tax will be cut by 1% to 21% in a move designed to more investment in the UK from overseas.

British Retail Consortium Director Stephen Robertson has previously said that: “This reveals the scale of the potential damage to our high streets that will follow if the Government follows previous practice and translates [the RPI] directly into next April’s rates increase.

“The Government must recognise that retail has already contributed its fair share to the Exchequer and freeze business rates in 2013. It also needs to reform the mechanism for setting future increases so that it is fairer and less volatile.”

Trade bodies such as the Association of Convenience Shops (ACS) have added their voice to the long list of retails and other industry champions expressing great disappointment at the failure of George Osborne to protect the retail industry by freezing rates.

ACS chief executive James Lowman said: “We welcome the Chancellor’s announcement of a one year extension to the small business rate relief scheme, but will not benefit enough businesses to stimulate the investment needed to revive high streets.”

The British Property Federation, on the other hand, is pleased by the Chancellor’s decision that from October 2013 all newly-built commercial property completed between 1 October 2013 and 30 September 2016 will be free from empty property rates for the first 18 months.