Leading representatives from Wales’ retail sector have written to Finance Secretary, Mark Drakeford, urging him to abandon plans for a new surtax on their industry.
Together the Welsh Retail Consortium and British Independent Retailers Association warn that the surtax would unfairly penalize businesses, putting them at a competitive disadvantage compared with counterparts across the border. The call comes ahead of the expected ratification of the Welsh Government’s Budget.
While the Finance Secretary has expressed support for smaller retailers, the joint letter stresses that both small and larger businesses are vital to healthy high streets. “Retail is the lifeblood of Welsh high streets,” it states. “Whether independent shops or national chains, these businesses create jobs, drive growth, and deliver essential services for communities across Wales.”
The joint letter was submitted to Mr Drakeford in recent days. The full text reads:
Dear Finance Secretary,
Scrap the surtax on retail premises
We acknowledge the positive steps the Welsh Government has taken in recent years, including more regular revaluations and, in the forthcoming Budget, the proposed lower multiplier for the smallest retail premises.
Acknowledging the rate burden on retailers, through the introduction of a lower multiplier for these businesses is a welcome and significant step forward and one which should be maintained.
However, we are writing jointly ahead of the Welsh Budget to urge you to reconsider introducing a higher business rates multiplier/surtax for retail businesses. Our sector currently pays disproportionately more in business rates compared to other industries. We believe that all retail businesses should be removed from the higher multiplier, and that this can be accommodated within the existing business rates framework.
Medium-sized and larger businesses - and our high streets and town and city centres - would be negatively affected by the proposed surtax. These are the very businesses that anchor our communities and which smaller retail, hospitality, cultural, and leisure businesses rely upon for footfall, and that customers rely on for essential and value for money products.
The proposed surtax on medium-sized and larger stores risks worsening existing cost pressures and customer prices. Furthermore, the sheer chasm between the multiplier that will apply to the sector in Wales compared to England – 51.5p in the £ v 43.2p in the £ – risks shifting investment out of Wales. Making Wales a materially more expensive place to operate would make economic recovery more challenging. It would not serve the interests of the Welsh economy if retailers were incentivised to invest in Cheltenham or Chester rather than Cardiff, Caerphilly, or Carmarthen.
A thriving Welsh retail sector supports local jobs, investment in town and city centres, and ultimately contributes to tax revenues. Continued investment in premises is essential to keep these businesses attractive to customers and minimise the number of vacant premises.
Our organisations have a range of proposals for how the business rates system could better support economic recovery in both the short and long term. We welcome your efforts to mitigate the impact on smaller retailers, and your recognition of the disproportionate burden business rates place on retail. However, we strongly believe the Welsh Budget should reflect the challenges facing retail by permanently exempting the industry from the higher rates surtax.
Your sincerely,
Sara Jones, Welsh Retail Consortium
Andrew Goodacre, British Independent Retailers Association
