Comment: Business rates cap is welcome but unfit system must be overhauled

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This morning, Retail Week has reported that there may be some good news in tomorrow’s Autumn Statement.

This morning, Retail Week has reported that there may be some good news in tomorrow’s Autumn Statement. If it is true that the Chancellor is about to announce a cap on business rates, limiting them to two per cent in England and Wales, it should save our industry £91 million next year. That would be a very positive first step towards the required reform of the business rates system.

Our research shows that such a cap could safeguard 7,500 retail jobs next year. It would provide a boost to local communities and allow more shops to stay open on our high streets. But a one year cap would not solve all the problems our industry faces.

When the British Retail Consortium (BRC) began campaigning for reform of business rates in August, I wrote in Retail Week that members had told me loud and clear that the rates system is unfit for purpose and fundamentally out of step with the way the industry operates in the 21st Century. We had listened to the consensus emerging from our members that the system needed a comprehensive healthcheck, not just a short term sticking plaster.

That is why, even if a cap is announced tomorrow, the BRC will continue to campaign for full reform of the business rates system. We are currently leading a rigorous examination of options for improving the rates, working with tax experts at EY. This work is supported by a broad group of industry stakeholders and being done in an open and inclusive manner, bringing in expertise from outside the retail sector as well as across it. This is proper, heavy-lifting from the BRC and we’ll be keeping readers of Retail Week in the loop as the work progresses.

The business rates system has become the highest business property tax in Europe. It is not competitive and requires reform. If the Chancellor offers some relief tomorrow, we will welcome it with open arms. But we know that in the longer term, proper reform of the system is what the retail sector needs.