Retail and hospitality groups call on government to freeze rates

(Sharecast News) - Retail and hospitality groups have called on the Chancellor to freeze business rates, warning on Thursday that inaction could prove "disastrous" for the UK's high streets. The government froze business rates to help support companies through the pandemic and the subsequent cost of living crisis.

The Treasury is still finalising the Autumn Statement, which Chancellor Jeremy Hunt is due to deliver to Parliament on 22 November.

But speculation is growing that Hunt has decided against freezing rates again for larger retailers.

The coalition - consisting of the British Retail Consortium, UKHospitality, UK Active, British Independent Retailers Association and the Association of Convenience Stores - claims that inflation-linked increases to the business rates multiplier would cost retailers £480m a year and hospitality firms £234m.

It added that the retail, hospitality and leisure sectors already pay more than £10bn in business rates annually.

They have therefore called on Hunt to freeze the multiplier, extend relief for a further year and increase the cap to at least £2m per business.

The letter states: "Energy prices remain at historically high levels, we have seen soaring wage costs (in our labour-intensive sectors) and our input costs remain high. For many businesses in hospitality, leisure and retail, the crisis is far from over.

"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 of the BRC, said: "Retailers are staring down the barrel of a £480m a year hike in the 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."

Kate Nicholls, chief executive of UKHospitality, said that freezing rates would be a "lifeline" for the sector, adding: "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."

Business rates are taxes on properties that are used for business purposes.