The Policy Exchange has suggested that business rates should be frozen for two years to ease the pressure on the high street, as traditional retailers deal with the rise of internet shopping.
The think tank argued that business rates are costing the retail industry more than £7bn a year and increased by £175m in April, which coupled with consumers turning to online shopping is leaving one in eight shops empty.
Recent figures show that shop vacancies have surged to a new high of 11.9 per cent, as high-profile retail failures knock holes in shopping centres.
Meanwhile, high streets have been “vastly outperforming” shopping centres and out-of-town retail parks, boosted by a 5 per cent increase in evening drinkers, diners and clubbers.
Adding to the calls for change, Rochdale MP Simon Danczuk has accused the Government of using retail business rates as a “cash cow to milk to exhaustion” and led a debate on Monday (May 20th) to look into the Government’s response to the high street’s plight, saying that business rates are “past their sell-by date”.
The debate followed the first evidence session at the Inquiry into the UK Retail Sector, where British Retail Consortium Director General Helen Dickinson gave evidence and said that business rates are now a key factor when calculating whether a new store opening is financially viable.
Ms Dickinson added that business rates may need to be fully reformed, agreeing with other campaigners that the business rates calculation should switch to being based on the consumer prices index (CPI) rather than September’s retail prices index (RPI), as it is currently
Mr Danczuk also called on the Government to appoint a permanent minister for the high street to show a ‘clear, strong leadership” from it on the issue and accused the Government’s shops tsar Mary Portas of turning the high street crisis into a reality TV show.
London accountant, Darren Specterman specialises in providing corporate tax advice and guidance.