BRC welcomes extension of business rates review and continues pressure for process to deliver fundamental reform

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Yesterday’s Autumn Statement will only have a minimum positive impact on the retail industry, which is still expected to find approximately £14bn over five years to meet new government policy announcements. Although retailers have committed to achieving the National Living Wage and more, there is a very real danger that there will be fewer people employed in the industry as a result.

The Chancellor used his joint Autumn Statement and Comprehensive Spending Review to announce that the year-long review of the outdated business rates system will be extended with its report now expected at the March 2016 Budget. The Government confirmed its plans to devolve rates setting to local authorities by 2020 and will continue to offer support to small businesses struggling with their rates bills by extending the doubling of small business rate relief (SBRR) in England for 12 months to April 2017. However, the high street retail discount – currently worth up to £1,500 a year to shops, cafes, pubs and restaurants – has not been renewed, which retailers will find very disappointing.

The Chancellor also confirmed that the apprenticeship levy will be set at 0.5 per cent of payroll and apply to firms employing over 150 employees. It is hoped the levy will raise £3bn a year and fund 3m apprenticeships.

Last July’s Budget is still holding back retail from helping the Government to deliver a more productive economy because of the need to mitigate the ever-increasing costs placed directly onto retailers by this Government – business rates, the national living wage and the apprenticeship levy. The BRC’s analysis shows that these three measures represent approximately £14 billion of potential costs to UK retail businesses over five years.

BRC Director General, Helen Dickinson, said: “It is encouraging that the Government appears to be taking their time to consider their options for fundamental review of the business rates system. We have long said that it would be better to take the time to get the solutions right on the first go and design a system that is fit for purpose. How rates reform will fit into the wider Business Tax Roadmap will be a big question in 2016.

“The chancellor needs to reduce the disproportionate burden of business rates on the industry and keep going with its review because this is the key to delivering the core of the Government’s reform programme. While we eagerly await the detail behind the plans to devolve rates to local authorities over the next few years it is clear that devolution does not address the key problems of the rates system.

“The government is absolutely right to want to increase the number of apprenticeships but in doing so it must make sure the quality is increased too. We welcome the decision to establish a new employer-led body to set the standards and ensure  quality.

“If left untouched the burdens on business will weigh the retail industry down. We are making a huge contribution to increasing wages and providing training and jobs. If retail is to do this successfully and not lose jobs in the future the Government will have to go beyond the devolution of business rates and deliver fundamental reform of the system early next year.”