a day ago
Reeves's £1.7bn tax raid risks gutting high streets, retailers warn
Rachel Reeves's plans for a £1.7bn tax raid risks gutting Britain's high street, retail bosses have warned.
The British Retail Consortium (BRC), which represents 200 major retailers, said high street brands may have to shut shops if the Chancellor pushes ahead with plans to charge larger stores higher business rates.
The Telegraph revealed last weekend that Ms Reeves is preparing to launch a fresh £1.7bn tax raid on businesses in the autumn. Under a proposed shake-up of business rates, department stores and supermarkets are expected to be hit with higher tax bills.
Helen Dickinson, boss of the BRC, said the proposals threatened to slam the brakes on retailers' investment plans, saying: 'If the Government includes shops within its new higher rates threshold, then many retailers will be forced to rethink their investment plans.
'The closure of larger stores would harm the local communities they support, costing jobs and reducing footfall in the area they serve.'
While the Treasury has yet to decide the new rates, City sources last weekend voiced concern that the Chancellor would set any surcharge on bigger properties at the maximum possible level.
It comes at a time when retailers are already grappling with higher costs, after the increase to National Insurance contributions and the recent minimum wage rise.
In evidence submitted to Angela Rayner's department, Marks & Spencer said higher business rate bills would 'accelerate the decline of the high street by encouraging retailers to close larger high street stores'.
Ms Dickinson said: 'If Government wants to improve high streets and help local communities, they must ensure that no shop pays more under their new rates reforms.'
She said the outlook for retailers was 'not all bright and sunny'.
The comments came amid concern that shoppers are becoming more wary over spending amid rising economic pressures.
Figures on Tuesday showed shopper confidence fell back in June, with grocery data firm IGD saying 'escalating global tension and economic pressures left shoppers feeling uncertain in the year ahead'.
It follows a period where sales ticked higher across the high street. Figures from the BRC revealed retail sales were up 3.1pc in the five weeks to July 5 compared to the prior year.
The BRC said this was helped by increased sales of electric fans as the country was struck by heatwaves. Food sales were also up in the period, rising 4.1pc on last year, although this was partly driven by food cost increases.
A Treasury spokesman said: 'To deliver our manifesto pledge and provide certainty and support to the high street we intend to introduce permanently lower tax rates for retail, hospitality, and leisure properties from next year.
'Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, supporting some of Britain's most loved high street chains to continue to create jobs and grow the economy.'
