Business secretary says rates system could change as NWEC steps up lobbying

Business secretary Greg Clark told a fringe event at the Conservative party conference that business rates could change as “one way” of recognising the role played by high street retailers.

Clark said the Treasury is conducting a review of business rates, but added that he believes retail “makes a big contribution to the community, and to villages, towns and cities”.

“And I think some recognition of that is required. Business rates will be one way of doing that,” Clark said.

The comments will be welcome remarks for the retail groups that have been lobbying for lower business rates for years.

The British Retail Consortium believes the retail industry paid £7 billion last year in business rates, while The Federation of Small Businesses has proposed a two-year freeze on rates.

In November 2017 chancellor Philip Hammond decided to bring forward a proposed cut to business rates, which would see them rise in line with the lower Consumer Prices Index (CPI) measure of inflation, rather than the Retail Prices Index (RPI).

However, the BRC argued that this did not go far enough and has called for the government to reduce rates further.

If the inflation figure stays the same in September, the BRC estimated retailers will have to pay an extra £190 million in annual business rates from April 2019.

It comes as the New West End Company gears up to lobby the government this week over a rates reduction of £5 billion for all properties across all sectors.

They believe this could be finances by a one per cent tax on large online-only businesses.

According to the New West End Company and research by Altus Group, Burberry faces a three year cumulative increase of 186 per cent in its rates bill, taking its liabilities up to £2.68 million next April. 

Meanwhile Selfridges’ bill will go up by £6.58 million to £17.51 million for 2019 – 2020.

“Our system of business rates was created nearly 30 years ago, before the advent of online shopping, and with the U.K. having the third largest e-commerce market in the world, it is vital that the Government develops a coherent approach to taxing the digital economy”, said Altus head of UK business rates Robert Hayton.

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  1. 100% agree, something needs to be done otherwise we will have no ‘high street’ other than bars and restaurants that often bring the much highlighted health and anti-social behaviour issues. Many online businesses pay no or little tax and often outside of these shores. The government needs to wait up and act and stop thinking that Brexit is the only thing that matters – they still need to do their ‘day job’! Regardless of your views on Brexit it has sadly stopped so much other much needed work from being done.


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