Major retailers and a shopworkers' union are urging the Government to spare bricks-and-mortar shops from higher business rates, warning that around 90,000 jobs could be lost by 2031. The Retail Jobs Alliance, which includes Asda, Kingfisher, Marks & Spencer, Morrisons, Primark, Sainsbury's and Tesco, has joined forces with Usdaw, the shopworkers' trade union, to press for an exemption from the higher business-rates multiplier.
Retailers warn of cost pressures
The alliance claims the previous Budget added about £7 billion in new costs and taxes to the retail sector. It warns that further rises could lead to job losses and higher prices for shoppers. The companies involved together employ nearly a million people.
The Government is being pressed to announce an exemption ahead of the October 28 Budget. The alliance warns that one in three retail workers is employed in the roughly 4,000 stores affected by the multiplier, which is used to calculate business rates for large commercial premises. It adds that if cost pressures wipe out jobs, this will hit “young people and already-struggling towns hardest”.
Economic impact and political pressure
Martin Beck, chief economist at WPI Strategy, the consultancy that produced the analysis, said: “Retailers are already absorbing additional costs and further increases in business rates would inevitably affect their ability to protect jobs, invest in stores and keep prices down.” He warned that when the cost of running a shop rises, the consequences will be felt by “households through added pressure on the cost of living”.
Joanne Thomas, general secretary of Usdaw, said it is “essential” large retail premises are exempt from the higher rates multiplier. Kim Johnson, Labour MP for Liverpool Riverside, said: “Cutting business rates for pubs, clubs and live music venues was absolutely right, but retail can't be left picking up the bill for it.” She insisted the sector “already pays more than its fair share in business rates” and stressed the importance of retail in providing people with a first job at a time of deep concern about youth worklessness.
Government response
Julia Lopez, Shadow Business, Innovation, Science and Trade Secretary, said: “Labour launched an assault on businesses with their tax hikes and excessive red tape, and the result has been entirely predictable: tens of thousands losing their jobs.”
A Treasury spokesperson said: “The Chancellor is prioritising giving businesses the breathing space to invest, grow and manage cost pressures, which is why we are backing firms through business rates cuts, a cap on corporation tax, and a £4.3 billion support package to limit bill rises. As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
