There might be some Christmas cheer for the ailing British high street after all, after the government leaked plans to limit the increase in business rates in Thursday’s Autumn Statement to the BBC.
George Osborne will cap the rates rise at 2% in England and Wales next April instead of an inflation-linked increase of 3.2%, and extend rates relief offered to small businesses.
Slashing the tax is at the top of businesses’ wish list for reviving Britain’s emptying town centres, and they’ve been lobbying hard for it. Business rates have climbed 23% since 2005-6, and are the highest in the EU. Retailers are now paying £3.05 in business rates for every £1 in corporation tax, according to the British Retail Consortium, and many pay more in rates than they do in rent.
British high streets could use some seasonal TLC. 20,000 retailers could be out of business in the next three years as their liabilities are bigger than their assets, a report by veteran retailer Bill Grimsey said in September. Around one in seven shops are standing empty, which landlords still have to pay rates for.
It’s possible that the pawn shops and pound stores are here to stay, and that even a rates cut can’t pull Britain’s high street back from the brink. For now, although the chancellor won’t be announcing a full review of business rates, at least retailers can cross something off their Christmas list.