Industry warns against Budget rises

Five trade bodies have written to the chancellor ahead of the UK Spring Budget

Jeremy Hunt walks carrying the red Budget briefcase towards 10 Downing Street.
Five industry bodies have written to the chancellor ahead of the reveal of the Spring Budget on 6 March warning against an above-inflation rise to business rates.

FIVE leading trade bodies have co-written a letter to chancellor of the exchequer Jeremy Hunt ahead of the Spring Budget, urging him to align any business rates rise to current inflationary rates.

The letter – signed by the Association of Convenience Stores (ACS), British Beer and Pub Association, British Independent Retailers Association, British Retail Consortium (BRC) and UK Hospitality – has pushed the chancellor to raise business rates in line with the Bank of England’s quarter two forecast for inflation, currently at 2%.

Typically, any rise to business rates would be made using the CPI rate from the previous September, which for this year would mean venues would be saddled with a 6.7% increase.

Helen Dickinson, chief executive at the BRC, said: “April’s rates rise will be more than three times the expected inflation at that time. This means above-inflation cost increase for businesses, which will put significant upwards pressure on prices, jeopardising the current success in bringing down inflation.

The co-signed letter states that keeping business rates in line with current projections would support industries across the UK as they seek to drive greater investment in villages, towns and cities all over the country.

While the Scottish Government is free to set its own business rates for the country, the five organisations argued a potential above-inflation rise to rates south of the border could have a detrimental impact for the whole of the UK, with a renewed pressure on retail prices across the board and reducing investment and growth for the whole retail industry.

James Lowman, chief executive at the ACS, said: “Ongoing support with the cost of business rates is crucial for incentivising investment in local high streets and shopping parades.

“While the extension of business rates relief announced at the Autumn Statement was a positive step, retailers are still bracing for a steep increase in rates come April. Such an increase poses a significant burden on businesses already contending with a challenging economic landscape.

“Adjusting the rate increase to reflect April’s CPI could bolster the continued growth of the £600 million annual investment that local convenience stores contribute to their communities, enabling them to invest and grow.”