Britain’s biggest supermarket chains are pleading with the Chancellor to exclude them from plans to whack shops with higher business rates.
Bosses at nine of the UK’s largest grocers are asking for a reprieve in next month’s Budget.
Rachel Reeves has been planning to charge big shops higher business rates to subsidise lower levies for smaller ones.
But the bosses have asked for large shops to be exempt, arguing they ‘support hundreds of thousands of jobs, provide valuable services that may not be otherwise accessible to local communities and drive footfall to nearby smaller businesses.’
The letter, organised by industry group the British Retail Consortium, is signed by executives at Asda, Tesco, Aldi, Iceland, Lidl, Marks & Spencer, Morrisons, Sainsbury’s and Waitrose.
Instead of higher rates for shops, they want big rises for large properties such as offices, warehouses and banks. They argue this ‘would not cost the taxpayer a penny’, and that rates are a ‘smaller proportion’ of offices and industrial plants’ costs. Reeves has been warned that if she continues with her plans, supermarkets will be forced to raise food prices, fuelling inflation and exacerbating the cost of living crisis already hitting millions of households.
Frustration: Tesco chief executive Ken Murphy (pictured) declared ‘enough is enough’ as businesses continue to grapple with higher costs from last year’s Budget
The retail bosses also said tax rises would lead to closures as stores become unprofitable – costing jobs and robbing town centres of big ‘anchor’ tenants that bring in shoppers and so boost business for smaller firms.
The industry is already reeling from an extra £7 billion in costs from last year’s Budget, which included higher wages and National Insurance Contributions from employers.
Business rates are based on the value of a commercial property, meaning shops and hospitality venues such as pubs pay a premium compared with online giants such as Amazon.
It has long been a point of contention between retailers and recent governments, who have all pledged to make the system fairer for bricks-and-mortar firms but have yet to make the changes demanded by the sector.
And Reeves’ reforms, which would levy higher taxes on properties worth £500,000 or more, have further incensed retailers.
‘Large retail stores sustain nearly one million British jobs and already contribute a third of all retail’s business rates, despite being a tiny proportion of all stores,’ the retail bosses said in the letter to the Chancellor.
They added that making shops exempt from the rate rise would ‘not only help to tackle food inflation but would support jobs and investment across the country.’
Earlier this month, Tesco chief executive Ken Murphy, one of the letter’s signatories, declared ‘enough is enough’ as businesses continue to grapple with higher costs from last year’s Budget.
He said tax rises were ‘an additional burden on the industry.’
Notably absent from the signatories was Co-op boss Shirine Khoury-Haq, who cautioned Labour against ‘protecting big business’ at the cost of smaller shopkeepers, and said 60,000 small retailers and 150,000 jobs would be at risk if reform was not delivered in England.
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Spare us from retail rate hikes, beg UK grocers