By Marcus Leach
The new Retail Price Index (RPI) inflation figure threatens to produce a highly damaging £350 million business rates increase for retailers next April, the equivalent of at least 16,000 jobs in the sector.
The convention is that Business Rates in England, Scotland and Wales rise each April in line with the previous September's RPI. Today (Tuesday) that figure has been announced as a colossal 5.6 per cent, its highest for 20 years.
The British Retail Consortium (BRC) has calculated an increase of this size would add £350 million to retailers' business rates bills at a time when the health of the high street is already under the spotlight. The BRC's most recent Footfall and Vacancies Monitor found more than one in ten town centre premises was vacant.
Retailers had to cope with a 4.6 per cent increase in rates in April this year. The BRC is urging the Government to consider the damage to jobs and investment that would be done by another increase on that scale and implement one considerably lower, as the Chancellor has the discretion to do.
British Retail Consortium Director General Stephen Robertson said: "Basing business rates rises on the previous September's RPI is a lottery and retailers have just seen a losing number come up.
"With trading conditions staying tough, an increase on this scale would have a hugely detrimental effect on retailers' ability to invest and create jobs.
"Retailers already pay 28 per cent of all business rates, a bigger proportion than any other sector. They were expected to cope with a near-five per cent increase this year. Some didn't survive it. It cannot be right to hit them with another massive blow next April.
"The Government should impose a much lower increase and, for the longer-term, review the system so that future increases are more predictable and more affordable."