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News - 8 October 2006
Will Council control of UBR help this shop to survive?

Chancellor told not to tinker with UBR

The British Retail Consortium’s (BRC) pre-budget submission has asked the Treasury to reject calls to give local authorities the power to set their own business rates. The BRC believes adopting this measure would lead to a massive rise in the already high cost of business rates and create retail ‘dead spots' in deprived and disadvantaged areas.

Business rates represent the third highest operational cost for retailers behind wages and rents. Currently businesses contribute £4.5bn to local government finance each year, proportionally three times higher than any other European country. The BRC believes that a move to a localised system of business taxation would see rates escalate alarmingly as local authorities give in to the temptation to increase business rates to boost income.

BRC policy director Nigel Smith said: "With employment starting to stall, consumer confidence slipping and a severe slowdown in retail sales growth since 2005, the Chancellor should be very careful not to tinker with the levers by adopting measures which will put retailers under further pressure. Businesses have already had to swallow inflation-busting increases in the National Minimum Wage as well as spiralling fuel and energy costs”

Alongside calls to reject a localised system of business taxation the BRC also called on the Chancellor to;

  • Reject the introduction of a Planning Gain Supplement (PGS) (contrary to submissions made by SEEDA and SEERA to the 2007 comprehensive spending review (CSR) see story in Knowledgebase – South East’s ability to compete slumps October 2006)
  • Confirm that funds are available to deliver the Hampton Review;
  • Inject £500m in the rail network to ensure retailers can continue to move more retail goods off roads and onto rail;
  • Introduce a new tax relief scheme for retail investment in shop fit-out;
  • Introduce a differential fuel duty system to provide retailers with a cushion from price instability in the global oil market;
  • Remove the tax on retailers with onsite renewable energy systems

Read related items on:
British Retail Consortium

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