By Daniel Hunter
One of Mary Portas’ key recommendations on business rates would only save businesses 50p a week on last year's bill, retail veteran Bill Grimsey has warned.
In research carried out for his alternative review into the high street, the former chief executive of Wickes and Iceland revealed that Portas’ suggestion to change business rates inflation from RPI to CPI would make barely any difference.
Comparing the business rates multiplier increase for 2012/13 based on 5.2% CPI instead of 5.6% RPI, it revealed the CPI rise would save a total of £46m. With a 2012/13 total of 1.759m business premises, each business would have to pay £26.15 less in the increase for that year — meaning that bills sent to businesses would save just over 50p a week.
Grimsey said he had decided to release the findings ahead of his review because he was concerned that industry bodies were adopting the recommendation and wanted to highlight what little difference it would make. He added that in the last five years CPI was actually higher than RPI twice.
“Business rates are a huge problem for retailers,” he said, “but we need root and branch reform not tinkering in the margins. The retail sector as a whole is paying a disproportionately high share of this tax and within this sector there is an imbalance in that smaller retailers are carrying the highest burden.”
He added that as part of the evidence his review was collating, he was holding a business rates roundtable event in London today. The director general of the British Retail Consortium, the president of the Ratings Surveyors’ Association and the head of rating at Colliers were among those attending.
“We’re taking a serious look at this problem because we’ve got to give small retailers a fighting chance of competing,” he said. “It’s just not enough to paper over the cracks.”
Promising a radical evidence-based solution to business rates, Grimsey nevertheless said any suggestions would have to balance the books.
“We’re looking at something that is cost neutral and will create a level playing field so smaller businesses can compete on a level footing,” he said.
Retail commentator Paul Turner Mitchell, who is organising the roundtable event, said retailers wanted to see an inherent unfairness in business rates tackled as soon as possible.
“The Business Secretary is on record saying the Government will review business rates once the UK economy has stabilised but we can’t keep waiting for this magical change of circumstances,” he said. “Business is being held back in this country by an antiquated tax system that’s crying out for reform. There’s a real sense of urgency and ministers have got to grasp the nettle now.”
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