Members of the Retail Jobs Alliance, including RivingtonHark, have written to the Conservative Leadership candidates calling for urgent action from the next Prime Minister to address the soaring tax burden on retail.

In an open letter addressed to both candidates, the Alliance stated that “without urgent action many more shops, restaurants and pubs will struggle to keep their doors open.” Despite being urged to keep the promises of the 2019 manifesto, which pledged to reform the system, neither leadership candidate has yet promised to cut rates.

Read the full letter below.

Dear Mr Sunak and Mrs Truss,

Should you become Prime Minister in September, it is critical that you prioritise restoring the social fabric of our communities. A key part of this is supporting the high streets and town centres that have been so badly affected by the pandemic.

We know that people right across the United Kingdom care deeply about this issue and it is encouraging to hear you both talk about the importance of this agenda.

However, we fear that without urgent action many more shops, restaurants and pubs will struggle to keep their doors open. This is particularly true for retailers, large and small, who are often the bedrock of our communities. Shops employ over 3 million people across the country, yet they are struggling to cope with rising rents and rates.

As the CBI has pointed out, businesses are facing a hike in their business rates bill next April of around 10% from inflation alone, an unsustainable burden on what is already the most taxed sector in the country. With property taxes in the UK four times higher than Germany and 50 per cent above the G7 average, piecemeal reform is not enough.

The next government must prioritise fundamental changes to the ‘Shops Tax’. A permanent reduction in business rates for all retailers, regardless of their size, would make a big difference to retailers’ ability to invest more in shops and stores as well as to create jobs.

You have both talked about the importance of tax cuts to stimulate private sector investment across the country. We agree, and think business rates reform should be prioritised.

While much of the discussion in this campaign has focused on corporation tax, it is business rates that are killing our high streets – a pre-profit tax which inhibits investment and disproportionately impacts those communities most in need of levelling up. Research shows that 77% of constituencies in the top 10% of rates burdens are in the North and Midlands, compared to just 18% in London and the South. A failure to act will see the risk of store closures and the loss of vital businesses to these communities, along with the additional footfall they attract.

Meaningful rates reform, therefore, would have a much larger impact in terms of stimulating investment than changes to other taxes. For example, while much of the policy debate has focused on whether or not to continue with the planned rise in corporation tax (estimated to generate £17.2 billion), for just £1.8 billion 197,000 retail properties could benefit from a 20% cut in business rates. In fact for the full cost of the corporation tax rise, business rates could be abolished for every single retail property in England.

There is simply no excuse for inaction.There are very few other policies that could deliver positive change that people can see and feel across the country within a short period of time.

We look forward to working with you over the coming months and years to ensure retail can continue to thrive and help revitalise high streets, town centres and communities right across the UK.

Yours sincerely,
The Retail Jobs Alliance

Association of Convenience Stores (ACS)
British Independent Retailers Association (BIRA)
Claire’s Accessories