Chancellor Sunak urged to reform archaic business rates

Chancellor Sunak urged to reform archaic business rates to ease coronavirus chaos

The Chancellor is under mounting pressure to reform the ‘archaic’ business rates system when he delivers his first Budget tomorrow amid the coronavirus outbreak.

Groups representing tens of thousands of companies in manufacturing and retail have called for the tax to be ‘swept away’ to allow an era of investment to be ushered in.

They claimed the system was ‘disproportionately’ hitting businesses in the Midlands and North.

Chancellor Rishi Sunak has been told Britain’s business rates system  ‘disproportionately’ hits businesses in the Midlands and North

Stephen Phipson, chief executive of manufacturers’ organisation Make UK, which represents 20,000 companies, called for the ‘complete reform of business rates’, adding: ‘The archaic system of business rates acts as a massive disincentive to invest, given the increasingly high cost of capital investment. 

‘This disproportionately impacts on companies in the Midlands and the North.’

It followed a plea from Steve Murrells, chief executive of the Co-op, who said the burden of business rates was having a ‘hidden human cost’ on Britain’s most vulnerable communities. 

He told Rishi Sunak – who was appointed Chancellor last month – that research by his company showed towns with more empty shops had the lowest ‘community wellbeing’.

Murrells added: ‘Without a common place to spend time and socialise, people’s collective wellbeing suffers. We’ve got to put an end to this notion that there are ‘worst’ places to live.’

Research from the British Retail Consortium said areas in the North and Midlands were ‘bearing the brunt’ of the unfair rates system. 

The trade body said firms outside London have subsidised those in the capital to the sum of £596million.

A transitional relief scheme staggers the speed at which those facing higher bills see their bills go up – and funds this by slowing down the speed at which bills fall for those who are due a reduction.

Businesses in North Lincolnshire over-pay on rates by £22million, Bassetlaw, in Nottinghamshire, overpays by £20million, and Great Grimsby, in East Lincolnshire, pays an extra £14million, the BRC said.

The High Street has repeatedly called for business rates reform – and is now braced for a bleak spring as fearful shoppers stay home due to coronavirus.

Boris Johnson announced temporary relief for small businesses last year, and has promised to launch a review into the system this year.

A raft of sales figures show a short-lived ‘Boris Bounce’ was swept away by February storms and the coronavirus outbreak.

Footfall was down 7.8 per cent in February, the wettest month on record, and research by Barclaycard said nearly three in ten UK adults were avoiding the High Street and other busy places due to coronavirus.

Helen Dickinson, chief executive of the BRC, said: ‘Clouds continued to hang over the retail industry in February.’


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