Nationally, one in ten shops along our high streets remain empty. As we all can attest to, in many struggling high streets, vacancy rates are much higher.
Ministers rightly speak of the inherent value of high streets to our communities. Now it is time for them to demonstrate their commitment by freezing business rates.
There is no doubt business rates, which are higher here than any comparable tax in the world, are discouraging local growth. Following September’s measure of inflation all businesses face a nearly four per cent increase on their business rates bills in April 2018 – without taking into account those who are already transitioning to higher bills following this year’s revaluation.
Retailers alone face a £270 million increase in April nationally, and in places where vacancy rates are stubbornly high such as Yorkshire and the Humber retailers alone face a £17 million increase. The continuing trend of ever-higher business rates results in a loss of investment, and fewer shops and jobs.
The unique nature of retail means that it is found across all communities providing approximately three million jobs. However, the industry is undergoing change requiring fewer shops and jobs accentuated by a rapidly rising costs base, market pressures, the availability of new technologies and the growing burden of business rates.
Simultaneously there are communities facing serious challenges including high deprivation and unemployment. As retail continues to undergo change these communities are at particular risk meaning Government should intervene by immediately reducing the burden of business rates and ensure adequate resources at the local level to attract investment to grow local economies.
Retailers are pleased Government remains committed to implementing more frequent revaluations and are hopeful it is able to identify efficiencies in the valuation process to ensure independent, fair and accurate valuations.
However, business rates announcements during the past two Budgets do not go far enough and are taking too long to implement with detrimental impacts to our communities. Waiting until 2020 to slow the growing burden for ratepayers as they have announced in the past is simply too late. A fairer level of property taxation is needed now to encourage investment.
Property is no longer an indicator of profit. Therefore, Government should look across all business taxation and be prepared to manage a shortfall in revenue as they do for most taxes including Corporation Tax and Income Tax.
We are continuing to reiterate our willingness to work with Government to achieve a simpler, more responsive and transparent system of business taxation. For its part, central government should take immediate action by addressing the 3.9 percent increase in April 2018 by freezing business rates and giving local government further powers necessary to prevent business rates from being one of the few methods of generating local revenue.
In addition to fundamental reform to make business rates sustainable into the future, consideration should be given to devolving fiscal powers such as flexibility to set council tax levels and stamp duty retention which would help fund local priorities such as social care and affordable housing.
We cannot wait for Ministers to kick the can down the road once again. Now is the time for Government to act by freezing business rates and progressing fundamental reform so that our high streets thrive.
By Jim Hubbard, Policy Adviser – Local Engagement, Property and Planning
Read the BRC's Budget submission, Helping Shoppers Budget, here.