Government must get serious about saving High St, Colliers International

Real estate services and investment management company, Colliers International, has hit out at Chancellor of the Exchequer, Sajid Javid, after yesterday’s Spending Review Statement contained little about business rates reform.

Although Javid promised there would be £241 million next year from the new towns fund to help regenerate High Streets, there was little detail about how the cash would be spent. This followed on from PM Boris Johnson’s announcement last week that the £1 billion Future High Streets Fund will expand to 50 more towns.

"Such spending in itself will not be enough to counter the impact of the 2017 business rates revaluation and introduction of downward phasing,” argues John Webber, Head of Business Rates at Colliers International. “It just simply won’t go far enough to help retailers struggling with their current rate bills. It would be much better to get to the heart of the High Street's problem immediately. And to plan the funds to remove downwards transition and reduce the multiplier now.”

‘Outdated Victorian taxation system’

Last month, over 50 UK retailers, including Asda, Marks and Spencer, Sainsbury’s, Iceland and River Island, called on the government to fix the business rates system.

A letter to Javid, coordinated by the British Retail Consortium, pointed out that retail remains the largest private sector employer in the UK, employing approximately three million people. The industry accounts for 5% of the UK economy, yet is burdened with 10% of all business taxes, and 25% of business rates, it stated.

Four fixes were flagged up: A freeze in the business rates multiplier; Fixing transitional relief, which currently forces many retailers to pay more than they should; Introducing an ‘Improvement Relief’ for ratepayers; Ensuring that the Valuation Office Agency is fully resourced to do its job.

The letter claimed that implementation of these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at least some of the bureaucracy of the current system.”

Richard Walker, Joint Managing Director, Iceland Foods, said: “Business rates are an outdated Victorian taxation system that have little relevance to our modern multi-channel retail economy. Fundamental reform of the system is the only way we will stem the decline of High Street communities up and down the country."