Where does the money come from?

There is something wrong in Britain’s toxic business rates system that is killing the high street retailers to a point where unless the government embarks on an urgent overall system designed to save them from total extinction, we are heading to a catastrophe of unimaginable proportions.

The bosses of many of the country’s best-known chains including John Lewis, Sainsbury’s and Marks and Spencer warn that sky-high rates are killing town centres.

In a powerful joint letter to Sajid Javid they urged the Chancellor to reform the tax before it is too late.

The retail leaders, who also include the bosses of Boots, B&Q and Harrods, say the combination of internet shopping and punitive taxes is having a dramatic impact on business. New figures show that more than 1 in 10 high street stores now stand empty.

The letter is also backed by executives from Pret-a-Manger, Greggs, DFS, Iceland, Asda, Debenhams, Primark, the Co-Op, Hamleys and River Island.

The Daily Mail has repeatedly highlighted the crisis in the retail sector, which threatens to ruin many of the country’s town centres.

Business rates are expected to rake in £31.3billion of tax in the financial year, according to the office for budget responsibility.

Organised by the British Retail Consortium (BRC), today’s letter takes aim at the broken system and says: This outdated tax is hindering our plans for investment, holding back productivity growth and detrimentally impacting communities up and down the country.

The UK has one of the highest commercial property taxes in the world.

The effect on many high streets and town centres has been dramatic. Business rates often represent the tipping point between opening a new store or a store’s viability and its closure.

The letter calls for a freeze on rates to stop them rising by inflation, a more efficient appeal process, ‘improvement relief’ for shops that spend money to upgrade their premises, and reforms to make the system simpler.

It follows an appeal from Tesco boss Dave Lewis. Writing in the Mail in May he called for rates to be cut and a new online sales tax.

Traditional stores have been hit hard by the rise of the internet, with household names such as House of Fraser, Debenhams and HMV rescued from administration. Even stalwart M&S is being forced to shut 100 outlets.

Last month, 10.3% were vacant, according to the BRC and data firm Spring Board. As the number of people visiting bricks and mortar shops were 1.9% lower in July than it had been a year earlier, the biggest fall for seven years.

Retailers claim business rates which are linked to a property’s value on the rental market, penalise high street stores.

Shops in prime locations with few customers can pay for more than warehouses operated by online arrival such as Amazon.

Stores are assessed and charged a percentage of their so-called rateable value each year. For large sites it stands at 50.4%.

More than 7,500 stores closed in 2018, analysis by the local data company shows and the BRC estimates that 70,000 jobs were lost. Among the worst hit areas is Mersey in Stoke-on-Trent, where it was estimated in April that 44 out of 130 shops were vacant.

The one thriving town lost 13 independent and 2 chain outlets last year and gained none.

A treasury spokesman said last month the Prime Minister announced £3.6billion town fund to support our high streets and town centres.

Personally, I don’t trust the present government to keep its promises simply because any money available to them they need to spend in propogandist efforts in order to stay in power.

And when you ask them where do you find the money we desperately need if we leave the EU without a deal, then they tell you a load of porkies to cover up a conspiracy of sorts.

The public is no longer stupid to believe it and to paraphrase it they will certainly retort; Tell it to the marines.

 

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