Retailers are being taken “for granted” by ministers, who should back down on a planned rise in business rates, the trade body for store groups has urged.
Business rates are set to increase by 5.6 per cent in April, based on September’s retail price index rate of inflation – a rise that will cost store groups £350m, according to the British Retail Consortium.
Jane Bevis, director of public affairs at the BRC, said: “If you walk around the House of Commons and you talk to MPs, if they have a car plant in their constituency, or a big chemical plant, they are very focused on championing that sector.
“Because there is a bit of retail in every single constituency, nobody really owns it. We are just part of what is there, and it is only if the village shop is going to close that people start to value and miss what they may be losing,” she said.
The BRC said the retail sector, which pays about £18bn in year in tax and employs 3m people, would account for 28 per cent of the tax revenues from the increase in business rates, estimated at about £1.4bn for the economy as a whole.
J Sainsbury, the UK’s third biggest supermarket by market share, is likely to see its business rates bill rise by tens of millions of pounds. Wm Morrison, the fourth biggest supermarket chain by market share, anticipates a £10m rise.
Alternatives to a flat rate increase include bringing it in in phases, or using consumer price index inflation, which is lower than the retail price index.
Tom Ironside, director of business and regulation at the BRC, said retailers required “a much more stable, much more predictable escalator” than the current mechanism.
The BRC and Oxford Economics, a consultancy, also found that intense competition between stores and an efficient retail sector meant Britons paid 5 per cent less for their goods than their counterparts in continental European countries.
The UK was particularly cheap for clothing, with garments 20 per cent cheaper than in the eurozone, while furniture and household goods were about 10 per cent cheaper. Alcohol and tobacco were more costly, due to high taxation.
Ms Bevis said the figures reflected the efficiency of Britain’s retailers, the liberal nature of the market, which made it easier to offer discounts and promotions, and intense competition in the market.
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