Boris Johnson has been accused of applying more “sticking plaster”, after the Tories promised new measures to save the high street.
The prime minister said today the party had an ambitious programme to “revitalise towns” with plans including a programme of rates relief for pubs and cinemas and providing at least £500m to reopen closed down railway lines to improve transport links to towns.
The Conservatives have also announced they would extend the retail discount on business rates to 50% (from 33%), next year for businesses with a rateable value of less than £51,000, describing the move as “an effective £280m tax cut” that would help small businesses.
Johnson claimed the proposals would “save our high streets and keep pubs and post offices open”, vowing the measures would help “overlooked and left-behind” towns and help people “put the heart back into the places they call home”.
However, The BRC said the government needed to “go much further” and urged ministers to commit to a full scale shake-up of the business rates system, as recommended by the Treasury Select Committee last month.
“While we welcome the extension of temporary support for small businesses, these measures need to go much further if they are to enable the successful reinvention of our high streets, particularly as the majority of the UK’s three million retail workers are employed in businesses that will not benefit from today’s announcement,” said Tom Ironside, director of business and regulation at the BRC.
He added: “To ensure the long-term vitality of our town and city centres, the next government should follow the recommendations of the Treasury Select Committee and commit to wholesale reform of our broken business rates system.”
The BRC is also calling on the government to scrap the system of ‘downwards transition’, which limits the reductions businesses can receive from revaluations at a cost to businesses, it claims, of £1.3bn.
“It is essential that the next government freezes next year’s rates increase and introduces an improvement relief to encourage investment in our high streets,” said Ironside. “These are vital first steps to support an industry that accounts for 5% of the economy, yet pays 25% of all business rates.”
Robert Hayton, head of UK business rates at real estate adviser Altus Group said: “Whilst undoubtedly great news for small businesses on our high streets, the discount precludes the large employers with big portfolios through EU State Aid rules whilst medium and large sized premises don’t qualify.
“Whilst the announcement is definitely a step in the right direction, more can be done to help lower what are the highest property taxes across Europe, such as ensuring rates bills fall in line with declining property values at the next revaluation, rather than tax reductions being phased in. These measures must form part of a wider coherent strategy to help reinvent and reshape our high streets and communities.”
ACS chief executive James Lowman said: “Local shops, especially those trading on high streets and in urban areas, will welcome these commitments to provide more help with the burden of business rates, but they also want national policies including help to cope with rising employment costs, a business rates system that promotes investment, and support for providing essential services in their communities.”
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