Business rates rise threatens future of town and city centres, UK Chancellor Jeremy Hunt warned

A coalition of hospitality, retail and leisure organisations have written to Jeremy Hunt, the UK Chancellor of the Exchequer, urging him to freeze the business rates multiplier and extend existing reliefs for a further year at the upcoming Autumn Statement.

British Retail Consortium, UKHospitality, Association of Convenience Stores, British Independent Retail Association and ukactive are warning that businesses, jobs and the future of high streets are at risk without the measures.

They point out that the aforementioned sectors combine to pay more than £10 billion in business rates a year.

The inflation linked increase to the business rates multiplier will cost retail businesses £480 million and hospitality businesses £234 million. An end to current relief will cost hospitality £630 million and retail £750 million.

In a survey of BRC members, 66% of retailers responded that they were ‘very concerned’ about an increase in businesses rates, with 69% saying it would place ‘significant pressure’ on the prices paid by customers.

A recent survey of UKHospitality members showed that 66% of businesses would reduce investment, 61% would raise prices and 41% would reduce opening hours if rates relief was removed.

Members of ukactive reported that 75% were ‘extremely likely’ to have to increase customer pricing in the next six months, with 88% having already been forced to raise prices over the past year.

The joint letter states: “An inflationary increase in the business rates multiplier and removal of reliefs would be disastrous for our sectors. It will mean business failures, job losses and boarded up properties in our high streets, denying people their livelihoods and their social pleasures.”

Helen Dickinson, Chief Executive at the British Retail Consortium, says: “Retailers are staring down the barrel of a £480 million a year hike in their business rates bills from next spring.”

“Such a hefty increase will threaten to put renewed pressure on retail prices, as well as block new investment in our town and city centres. It is essential that the Chancellor uses the Autumn Statement to freeze business rates and give our local communities a fighting chance to thrive.”

Kate Nicholls, Chief Executive at UKHospitality, comments: “Freezing rates and extending relief will be a lifeline for a sector that simply cannot absorb any more costs. Inaction will leave hospitality businesses with no choice but to put up prices, open less or, in the worst-case scenario, shut their doors for good.”

“Pubs, restaurants, cafes and hotels, to name a few, act as pillars of their communities and they want to continue in that central role, as well as driving economic growth and providing countless jobs. Action on business rates at the Autumn Statement is critical to that.”

Andrew Goodacre, CEO at the British Independent Retail Association, says:  “Independent retailers are finding life on the high street incredibly difficult. Significant increases in interest rates have reduced consumer expenditure and in the first half of 2023 21,000 independent businesses closed.”

“The current 75% retail discount on business rates must be retained as those smaller retailers cannot afford any increases in costs – many of them are still dealing with 10% increases in their rateable values earlier this year.”

James Lowman, Chief Executive at the Association of Convenience Stores, says: “Ongoing support with the cost of business rates is essential to incentivise investment in local high streets and shopping parades.”

“We urge the Chancellor to maintain business rate reliefs and to freeze any increase in business rates at the Autumn Financial Statement. This will support the continued growth of the £600 million annual investment that local convenience stores already make in their communities."

Huw Edwards, CEO at ukactive, says: “Our nation’s gyms, swimming pools and leisure centres continue to face increased pressure from high energy and living costs, with 88% of private sector operators having already been forced to raise prices and 50% making redundancies over the past year.”

“Continued government support by extending relief and freezing business rates is vital for the survival and growth of fitness and leisure facilities, which will be integral to improving the health of the nation and the economy.”