Opinion: Rates hike will hit high street and young retailers hardest

There was talk that the swingeing increases planned in some areas may be watered down, either through some sort of capping system or transitional relief, when Chancellor Philip Hammond unveils his Budget next month.

Interim measures would be welcome, but the problem demands a long-term solution.

The latest revaluation of business rates has resulted in stark inequity. While the government says three-quarters of the country will benefit, other parts face a burden that will put some retailers out of business.

Big retailers have long complained about the rates burden, but they are among the most able to afford higher rates – unfair and unwelcome as they might be.

Those hit hardest by a rise this time, whether in London, Southwold in Suffolk or West Somerset, will be small enterprises – many of which might fall into Prime Minister Theresa May’s ‘just about managing’ category.

“Whether or not there is short-term action in the Budget, the industry must carry on its fight for fundamental change to a broken system”

In many cases they fit that description not through want of entrepreneurial verve, but because of the relentless cost rises being imposed.

Why does it matter? Because while big-name stores may draw footfall to particular high streets, so do the best smaller retailers and other types of business that may be penalised by rates changes, such as bars and restaurants.

Town centres would be poorer places without the diverse range of retailers that still operate there.

Even worse, the crushing weight of rates could wipe out young businesses that could grow into powerful players.

Whether or not there is short-term action in the Budget, the industry must carry on its fight for fundamental change to a broken system.

Otherwise the Tescos and Ted Bakers of tomorrow could be taxed out of existence.

Going local

Food price inflation, partly a result of the post-Brexit vote fall-out, and product shortages such as the ‘courgette crisis’ have put the spotlight on the UK’s food security.

So the British Food Report commissioned by Morrisons is a timely intervention.

Only 50% of the food consumed in this country comes from British farms, and that surely has to change as global challenges such as climate change, never mind political and economic volatility, bite.

Morrisons hopes to find 200 new, British suppliers so that shoppers can buy more food that is “grown, made, picked or packaged” within 30 to 60 miles of their local branch.

The ambition to sell more British food isn’t unique to Morrisons. Grocers in general are keen to bolster their local produce and products – and why not?

Despite old jokes about British food, there is an abundance of great eats available, from Stilton to soft fruit.

The challenge for grocers is to avoid tying up fledgling suppliers in red tape.

A common complaint among tech start-ups is that, although they may win high-level sponsorship among retailers keen to tap into the latest digital opportunities, they soon get mired in the bureaucratic treacle that can dog big companies.

The result is that opportunity remains unrealised.

But the ambition to nurture small businesses, and turn them into big ones, is good for Britain – and good for the retailers that reap the benefits of access to products that set them apart from competitors.