The British Retail Consortium (BRC) is calling on government to freeze business rates increases to provide some relief for UK retailers.
The BRC says the retail industry is currently under “significant cost pressure” and is “going through a period of transformation driven by technology and changing consumer behaviour”.
Calling the current business rates system “unsustainable”, the BRC has pointed out that the retail industry is the UK’s largest private sector employer, making up 5% of the economy and paying nearly 25% of the overall business rates bill – more than £7bn each year.
“This is a disproportionate burden and is leading to decisions to close stores, while at the same time getting in the way of the modernisation and reinvention of Britain’s high streets,” warned Helen Dickinson OBE, chief executive of the BRC.
“This comes during a period when the industry is dealing with increasing costs, many resulting from government policies such as the Apprenticeship Levy or National Living Wage. At the same time, retail businesses are investing heavily in retraining their workforce for the digital economy, and in new technology to cater for the ways people now want to shop - £5.3 billion in 2016 alone – all of which will improve the productivity of the industry.”
With nearly 2,500 fewer retail stores in the UK compared to three years ago, the pressure retailers are facing is clear, says BRC.
“Fundamental reform of the business rates system is needed and must be considered as part of a wholesale modernisation of business taxation,” said Dickinson.
“Our proposal for a two-year freeze in rates increases would take some of the cost pressure off retailers, while allowing time for a dialogue between government and industry to develop a proposal for a modern business taxation system, fit for commerce in the 21st century, which supports business growth and improves productivity.”