Sainsbury’s boss: 17,000 stores at risk without business rates reform
Over 17,000 stores could close within the next 10 years unless there is an overhaul to the business rates levy, the chief executive of Sainsbury’s has said.
In an article in The Times, Simon Roberts, along with Usdaw (The Union of Shop, Distributive and Allied Workers) general secretary Paddy Lillis, said the “outmoded” business rates system is the “No 1 barrier to growth”.
“Successive governments have promised reform but have only ever tinkered around the edges. The result? Shops closing, jobs lost, economic growth stunted”, they added.
Research from Development Economics, shared with The Times, found that a 20% reduction in headline business rates could save retailers £1bn in the first year alone.
Whilst the research notes that a significant rate cut would reduce tax revenues for the Treasury, the resulting boost in economic activity would generate annual net returns of £70m for the government within a decade.
Without intervention, however, Development Economics warned that – under a worst-case scenario – 17,300 stores could close by 2033-34.
Roberts and Lillis added: “A government that revitalises growth, boosts jobs and secures long-term funding for public services will be able to look back on its achievements with pride.
“Reforming business rates won’t be a silver bullet to achieving all of this, but it would be a very good place to start.”
Prior to this year’s General Election, The Labour Party pledged to replace business rates as part of its plan to “breathe life” into Britain’s high streets.
The party said it plans to replace business rates with “a new system of business property taxation”, which it said will rebalance the burden and level the playing field between high street retailers and their online counterparts.