SAVE BRITAIN’S HIGH STREETS
As it’s revealed 50,000 retail jobs were axed in the past six months, the Mail calls for urgent overhaul of crippling business rates
THE Scottish Daily Mail today launches a major campaign to save Britain’s high streets – after a staggering 50,000 retail jobs were axed in the first six months of the year.
The figures expose the bloodbath on shopping streets up and down the country as hundreds of stores – from major chains to small shops – close down. Business leaders, shopkeepers and mPs blame punitive business rates that cripple the high street and hand a huge advantage to internet giants.
Today chief executives of some of the country’s biggest chains warn that skyhigh rates are stifling investment and driving long-established companies to the wall, and demand reform.
Last year shops closed at a rate of 16 every day. Figures compiled by the Press association show that between January and June 50,000 jobs were either axed or expected to go.
In recent months the trail of destruction has hit established names including House of Fraser, which has put 6,000 jobs under threat, and Poundworld, which plunged into administration endangering a further 5,100.
Toys r us and maplin collapsed, while restaurants such as Prezzo, Byron and Jamie’s Italian have shut down and culled hundreds of jobs.
But the authorities rake in billions from business rates – with a total haul of £30.8billion predicted this year across the uK, including £2.6billion in Scotland. The vast majority comes from
major retailers in the hearts of towns and cities, while online stores and out of town shopping centres pay much less in both rates and corporation tax.
Marks & Spencer, which is axing more than 100 stores in the next four years, told the Mail that rising rates were partly to blame for its drastic slimming down.
Chief executive Steve Rowe said: ‘Business rates are an unfair burden of taxation directly contributing to the challenges the high street is facing. The long-term effects of these charges are now a reality.
‘Our store closure programme can in part be attributed to business rates – our Covent Garden store faced a rate rise of close to a half a million pounds in the year before it closed, an untenable position for any retailer. These challenges will continue until the system is reformed to create a level playing field between high street and online retailers.’
Tesco chief executive Dave Lewis also railed against business rates. He said: ‘UK retail is the most employment-dense sector of the economy, so constantly losing businesses in the way we are will have an economic impact.’
David Lonsdale, director of the Scottish Retail Consortium, said: ‘The growth in Government-imposed costs – such as business rates, the national living wage, rising employer pension contributions and the apprenticeship levy – is outstripping that of shopper spending. This coupled with seismic structural changes sweeping through the retail industry means that unless the Scottish Government acts now, there could be more job losses in Scotland’s largest private sector employer.
‘Rates continues to be our biggest concern. Getting the rates regime right is not just good for the hundreds of thousands directly employed by retail but will reap benefits for the supply chain, construction and service industries who rely on us to survive, invest and grow.’
The steady rise in rates has prompted outcry from small and large firms alike, along with every influential business lobby group.
Business rates are based on the estimated rental value of a property. It means traditional retailers such as department stores with large premises in town centres are hit hard, while online rivals such as Amazon pay far less.
Struggling chains such as House of Fraser have been landed with some of the biggest bills.
It had a £120million rates bill last year, according to analysis by consultant CVS.
It had to pay up, despite suffering a £37million loss.
Experts said 2018 will go down in history as the ‘year of the Company Voluntary Arrangement’ – an insolvency procedure used to push through several store closure programmes this year.
Stuart Mackinnon, of the Federation of Small Businesses Scotland, said: ‘If the retail sector is going to undergo rapid change and cause side effects to local economies and the labour market, policy makers should make it as easy as possible for businesses to thrive and survive.’
Last week, the Scottish Government launched a consultation, which could also lead to out-oftown shopping centres and supermarkets being forced to pay an additional levy on business rates in a bid to revive Scotland’s high streets. Online retailers would also face extra charges in the move, which is to be piloted in three council areas.
However, businesses claim it will do little to help and have called on the Government to step in and reduce rates for all.
Finance Secretary Derek Mackay said: ‘The launch of this consultation marks the next step in our reform of the business rates system following the Barclay [rates] review. It seeks the views of business on the proposed legislative changes that we intend to bring forward to ensure we maintain a competitive advantage for Scottish ratepayers.
‘The recommendations of Barclay, alongside others in the Budget, strike the right balance between offering a competitive and sustainable taxation environment while delivering sufficient resources to fund the public services which we all rely on.
‘In April I introduced a number of measures to underpin that competitive advantage. The growth accelerator and 100 per cent relief for new-build properties until first occupied will support speculative development and encourage improvements to our building stock, while our new targeted nursery relief will support a sector that is vital to ensuring an inclusive workforce.
‘I am confident that these measures will not only attract new investment into Scotland, but also incentivise new developments and support employment.’