TheRetailer_Autumn_2019

Business rates reform: making retail’s voice heard NEWS FROM THE BRC

Dominic Curran Property Policy Adviser British Retail Consortium

T he Treasury Select Committee has published its report on business rates and come up with recommendations that provide a sound basis for rates reform. The Government have also passed the legislation necessary to bring forward the next revaluation to 2021, not 2022. And we have had a Budget that has boosted the economy and addressed business and consumer uncertainty. I wish that this was the article that I was writing. However, parliamentary prorogation, and the climate of febrile political uncertainty that produced the ultimately unlawful suspension, has stymied Parliament’s vital day-to-day work. This has resulted in a delayed Select Committee report, delayed legislation and delayed reform, and that’s just on the issue of business rates. Despite this miasmatic atmosphere, the BRC has been loudly and clearly representing the industry’s interests. Retail is the largest employer in the UK with a workforce of 3m people, but it is rarely treated as such by Government. We have in particular been making the case for business rates reform. Rates are a huge issue for retail - the industry accounts for 5% of the economy but pays 10% of all business taxes and 25% of business rates. For the largest retailers, business rates account for around half their total tax bill. Thanks to delayed property revaluations and a staggered transition to up-to-date bills, some retailers are even today paying rates bills that are indirectly linked to values set in April 2008 – a market high and utterly unrelated to today’s rental market. That’s why in early August we co-ordinated over fifty major retailers and trade bodies in writing a letter to the Chancellor making clear the industry’s concerns over the business rates burden, calling for long term transformation and, pending this, for four specific immediate reforms: a freeze in the rates multiplier; an end to downwards phasing, whereby retail units in the north of England subsidise banks in London; an improvement relief to incentivise investment in property; and proper resourcing of the Valuation Office Agency so that it can effectively undertake both the day job of appeals as well as manage the revaluation process.

A few weeks later the BRC also led a coalition of several business organisations, including the Confederation of British Industry, the British Property Federation and the Federation of Small Businesses, in contacting members of the Treasury Select Committee asking them to prioritise the publication of their report into the impact of business rates. This has been delayed by Committee members being promoted to Ministerial positions and from not being able to replace them during prorogation. The BRC is pushing for publication as soon as possible to help move the debate forward. We have built on the momentum for business rates reform generated during this summer lobbying through meetings with officials, parliamentarians and Ministers over the conference period and more recently as we head into a possible general election and Budget. In addition to these meetings, the BRC is also actively engaging with Government through the Retail Sector Council (RSC). Set up in June last year, the RSC is a body jointly chaired by the Retail Minister, Kelly Tolhurst MP, and the Chair of the BRC Board, Richard Pennycook. It acts the voice of retail to Government and is a forum through which to discuss sector- specific issues. The RSC’s first piece of work, supported by the BRC, has been looking at the particular costs faced by retailers from tax, regulation, and particular operational costs faced by retailers. We expect that the report of this work will soon be presented to Government, further making the industry’s case for business rates reform. These are bewildering times in many ways. The BRC’s role is to make sure that the retail industry is central to debates affecting it, whether that’s Brexit or business rates reform. Despite the uncertainty created by the former, we are relentless in pursuing the latter.

“some retailers are even today paying rates bills that are indirectly linked to values set in April 2008 – a market high and utterly unrelated to today’s rental market”

the retailer | autumn 2019 | 15