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A group of hospitality, retail and leisure trade bodies have made a last-ditch plea for Jeremy Hunt to freeze business rates in next week’s autumn statement.
The British Retail Consortium, UKHospitality, Association of Convenience Stores, British Independent Retail Association, and UKActive said that an inflationary increase in the business rates multiplier and removal of relief would be “disastrous” for their sectors.
In a letter to the chancellor, they said it would result in “business failures, job losses and boarded-up properties in our high streets, denying people their livelihoods and their social pleasures”.
Last autumn, Hunt announced a support package worth £13.6 billion to help businesses recovering from the pandemic. It included freezing business rates, which usually increase annually, as well as increasing the discount for retail, hospitality and leisure businesses from 50 per cent to 75 per cent for 12 months, capped at £110,000 per company.
Business rates are due to increase again in April, however, under the government’s “multiplier”, which is pegged to inflation in September as measured by the consumer price index (CPI). Based on estimates, an inflation-linked increase will cost retail businesses an extra £480 million and hospitality businesses £234 million.
Kate Nicholls, chief executive of UKHospitality, said: “Freezing rates and extending relief will be a lifeline for a sector that simply cannot absorb any more costs. 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.”
The Treasury is understood to be finalising details before the autumn statement next week.
The chancellor is thought to have decided against freezing rates for larger retailers despite warnings that an increase would cost jobs and push up prices. Business rate bills for larger retailers could rise by 6.7 per cent in the spring, Whitehall sources told The Sunday Times.
Helen Dickinson, chief executive of the BRC, said: “Retailers are staring down the barrel of a £480 million-a-year hike in their business rates from next spring. Such an increase will put renewed pressure on prices, as well as block new investment in our town and city centres. It’s essential the chancellor uses the autumn statement to freeze business rates and give our local communities a fighting chance to thrive.”