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Published
Jul 4, 2018
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BRC calls for two-year business rates freeze

Published
Jul 4, 2018

Amid a growing number of high profile CVAs and declining store footfall, the British Retail Consortium has called on the UK government to consider a two-year freeze on business rates to provide some relief to struggling retailers.


Reuters


“The current business rates system is unsustainable. The retail industry, the UK’s largest private sector employer, makes up 5% of the economy and pays nearly 25% of the overall business rates bill, over £7 billion per 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,” said Helen Dickinson, chief executive of the British Retail Consortium in a statement.

The industry body blamed government policies such as the Apprenticeship Levy or National Living Wage for putting extra pressure on British retailers, which are already facing challenges rising from technology and changing consumer behaviour.

At the same time, retail businesses are investing in retraining their workforce for the digital economy, updating their systems and adapting their strategies to multi-channel and customer-centric approaches.

These factors have contributed to the closure of nearly 2,500 stores over the last three years, and there have been over 3,200 retail insolvencies in the UK since 2014, according to the BRC.

“Fundamental reform of the business rates system is needed and must be considered as part of a wholesale modernisation of business taxation. 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,” Dickinson continued.

COMMUNITY HUBS

The BRC is not alone in thinking that the UK high street needs a serious overhaul to survive. On Wednesday, influential retail expert Bill Grimsey said town and city centres have too much retail space, and need to be transformed into multi-use community hubs.

"Towns must stop trying to compete with out-of-town shopping parks that are convenient and with free parking,” said Grimsey. "They must create their own unique reason for communities to gather there - being interesting and engaging and altogether a compelling and great experience."

In a report, he provided 25 recommendations including the creation of a Town Centre Commission, a business rates reform and liberalising the planning system.

"Town centres need to be repopulated and re-fashioned as community hubs that include housing, health and leisure, entertainment, education, arts, business/office space and some shops," the report said.

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