'Time to give ailing shops a rates rest'
RETAILERS will be hit with £175m in extra costs if next year's business rates are based on September's Retail Price Index (RPI).
The figure, which was released yesterday, would result in a rate increase of 2.6 per cent – a rise even the most buoyant retailer will struggle to absorb.
With the number of empty shops on the UK high street at a record high, the British Retail Consortium yesterday issued a stark warning that the rates hike would seriously impede retailers' ability to invest and create jobs – especially for young people.
Through its "Fair Rates for Retail" campaign, run jointly with industry magazine Retail Week and backed by numerous top retail chief executives, the BRC is calling on the Government to freeze business rates next year.
Stephen Robertson, director of the British Retail Consortium, said: "This RPI announcement reveals the scale of the potential damage to our high streets that will follow if the Government follows previous practice and translates it directly into next April's rates increase.
"The retail industry is the UK's biggest private sector employer, providing crucial first jobs to a million 16 to 24-year-olds.
"Expecting retailers to bear a huge rates hike for the third year running can only lead to fewer chances of work, less investment and more troubled high streets."
Over the past 18 months, business rates have risen dramatically for retailers, creating an extra burden which many have been unable to bear.
Last year, they rose by 4.6 per cent), followed by a 5.6 per cent rise in 2012, resulting in a cumulative increase of more than half a billion pounds.
And the issue has not only affected sole traders or small independent shops but also well established national names including Game, La Senza, JJB Sports and TJ Hughes.
The BRC pointed out that, as a consumer-focused sector that uses large amounts of property across the UK, retailers are already pay 28 per cent of all business rates.
The organisation says the sector would be hit "disproportionately hard" by an 2.6 per cent rise next April.
As well as calling for a freeze of business rates in 2013, the Fair Rates for Retail campaign also calls on the Government to honour its commitment to review the mechanism for setting rates increases, and to introduce a fairer, more sustainable formula for the future. Rather than the lottery of basing rates on September's RPI, the BRC favours increasing them in line with an annual average of the Consumer Price Index (CPI).
Mr Robertson said: "The Government must recognise retail has already contributed its fair share to the Exchequer and freeze business rates in 2013.
"It also needs to reform the mechanism for setting future increases so that it is fairer and less volatile."