M&S boss Stuart Machin is the latest to add his voice to the wider call for a freeze on business rates, describing them as “daylight robbery”.
Machin’s statement comes in the wake of this weekend’s news that supermarket bosses put their names to a letter sent by the Retail Jobs Alliance, calling on chancellor Jeremy Hunt to freeze business rates in the autumn statement, due to be announced this Thursday.
The chief executives of some of the UK’s leading retailers – including Tesco, Sainsbury’s and Iceland – said that current business rates were already putting retail businesses “at breaking point”.
The letter – which was also addressed to the prime minister Rishi Sunak – urges the government to take action, warning that increasing business rates – which are due to rise next April in line with inflation – “risks pushing some retailers under”.
Business groups want the government to reconsider the sharp rise in business rates, which is expected to bring in an extra £3bn to the Treasury.
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The letter read: “Without intervention, [business rates] are set to rise with inflation by over 10% in April, the same time as the energy support is set to expire.
“Analysis from our members suggests the real-terms cost impact on shops could be up to 20% due to the impact of inflation and transitional relief. This risks pushing some retailers under and will feed through to inflation.”
For his part, Machin wrote in The Mail on Sunday that: “Running a shop costs a lot more than running an online business, and a large part of that is down to business rates that have zero link to profits or, indeed, reality. It’s why the total tax rate for retailers is around 70% and why it pays 25% of all business rates despite being 5% of the economy.
“And it’s why high streets and city centres are increasingly full of vacancies and dodgy shops; rates have gone up by the same amount as retail property values have gone down. Frankly, it’s daylight robbery.
“As we look ahead to this week’s fiscal update, all we ask from the government is a fair shot, and that means reducing the rates multiplier back to its original 1990 level from over 50p in the pound down to 35p in the pound. We don’t want handouts – we just want fairness.”
The annual increase in business rates – which has been frozen by Sunak for the last two autumn budgets – is governed by the previous September’s level of consumer price inflation, which hit 10.1%.
