£1.6bn rates lifeline so high streets can earn a decent crust

THOUSANDS of small retailers will see their business rates slashed by a third as the Treasury throws a £1.6billion lifeline to Britain’s struggling high streets.

About 500,000 shops, pubs, restaurants and cafes will see their rates bills cut over the next two years as the Government tries to halt shop closures.

The Budget announcement is a victory for the Mail which has been campaigning for the Treasury to ease the business rates burden on retailers.

More than 50,000 retail jobs have been lost this year as retailers face an onslaught from foreign tech giants such as Amazon.

Rates relief will be awarded to retailers with a rateable value below £51,000 from April next year, Mr Hammond said.

The rateable value represents the rent the property could be let for and is used by local councils to calculate a property’s business rates.

The move will result in an annual saving of up to £8,000 for up to 90 per cent of all independent retailers.

It will save the average shop £3,274 next year, according to property adviser Altus Group, with an average pub saving £6,064 and a restaurant £7,170.

Small shopkeepers will benefit from the relief for two years until the next revaluation for business rates in 2021.

Britain’s high streets are under more pressure than ever as online shopping in the UK grows at a faster pace than any other large economy, said Mr Hammond.

‘If Britain’s high streets are to remain at the centre of our community life they will need to adapt,’ he added.

Nickie Aiken, Conservative leader of Westminster City Council, welcomed the announcement, adding that retailers in the capital’s West End are struggling under the burden.

‘The announcement on online tax and help for the high street is a victory for the Daily Mail’s campaign and all those campaigners who have pointed out the iniquity of the huge profits made by internet giants who aren’t lumbered with the costs of bricks and mortar retailers,’ she said.

‘We have seen a string of job losses and profit warnings on the high street, and urgent action is needed.

‘The announcement shows the powerful plea to help our high streets has been heard in the Treasury.’

In addition to £900million for business rates relief, the Treasury will set aside £675million for a Future High Streets Fund to help councils rejuvenate towns and city centres and their transport links.

Mike Cherry, of the Federation of Small Businesses, said the Chancellor had delivered his first ‘ small business- friendly Budget’, and had ‘listened to our requests across many areas of tax and policy’.

But critics accused Mr Hammond of ‘tinkering around the edges’ and warned the package would do little to stop the thousands of store closures and job losses at larger retailers.

Toys R Us, Poundworld and Maplin have already gone bust this year, while Marks & Spencer, Carpetright, Mothercare and Debenhams are shutting stores.

Laith Khalaf, of investment firm Hargreaves Lansdown, said: ‘Cuts to business rates for smaller high street premises will be welcomed by shopkeepers. But it is not going to deliver a dividend for the big department stores where store closures and job losses can still be expected.’

Last week Debenhams announced 50 store closures, putting 4,000 jobs at risk, as it plunged to a near £500million loss – the biggest in its 240year history. Sergio Bucher, chief executive of Debenhams, and a former Amazon executive, said business rates were partly to blame. It forked out £80million in business rates last year.

Amazon paid just £14million on its 14 warehouses across England and Wales.

Helen Dickinson, of the British Retail Consortium, said: ‘The Government has missed a much-needed opportunity to help the retail industry... the majority of the UK’s 3.1million retail workers are employed in businesses that will not benefit from today’s announcement.’