A coalition of leading hospitality, retail and leisure organisations have written to the Chancellor urging him to freeze the business rates multiplier and extend existing reliefs for a further year at the upcoming Autumn Statement
UKHospitality, ukactive, British Retail Consortium, Association of Convenience Stores and British Independent Retail Association are warning that businesses, jobs and the future of high streets are at risk without the measures.
The sectors combine to pay more than £10 billion in business rates a year. The inflation-linked increase to the business rates multiplier will cost retail businesses £480m and hospitality businesses £234m. An end to current relief will cost hospitality £630m and retail £750m.
A recent survey of UKHospitality members showed that 66% of businesses would reduce investment, 61% would raise prices and 41% would reduce opening hours if rates relief was removed.
A survey* of ukactive members found that 19% of private sector operators have been forced to close some or all their sites over the past year and 50% have made redundancies to cope with high operating costs, which include energy bills increasing by up to 200%. In terms of socioeconomic status, the fitness and leisure sector’s workforce has a higher proportion of workers in lower socio-economic groups and 30% more 16- to 24-year-olds working in its occupations than the wider economy.
From ukactive’s survey sample, 44% said they will be forced to consider making redundancies within the next six months and 75% said they are ‘extremely likely’ to have to increase their customer pricing in the next six months, with 88% having already been forced to raise prices over the past year.
In a survey of BRC members, 66% of retailers responded that they were ‘very concerned’ about an increase in businesses rates, with 69% saying it would place ‘significant pressure’ on the prices paid by customers.
The joint letter warns of the ramifications of such dramatic increases in business rates:
“An inflationary increase in the business rates multiplier and removal of reliefs would be disastrous for our sectors. It will mean business failures, job losses and boarded up properties in our high streets, denying people their livelihoods and their social pleasures.”
Huw Edwards, CEO of ukactive, said: “Our nation’s gyms, swimming pools and leisure centres continue to face increased pressure from high energy and living costs, with 88% of private sector operators having already been forced to raise prices and 50% making redundancies over the past year.
“Continued Government support by extending relief and freezing business rates is vital for the survival and growth of fitness and leisure facilities, which will be integral to improving the health of the nation and the economy.”
Kate Nicholls, Chief Executive of UKHospitality, said: “Freezing rates and extending relief will be a lifeline for a sector that simply cannot absorb any more costs. Inaction will leave hospitality businesses with no choice but to put up prices, open less or, in the worst-case scenario, shut their doors for good.
“Pubs, restaurants, cafes and hotels, to name a few, act as pillars of their communities and they want to continue in that central role, as well as driving economic growth and providing countless jobs. Action on business rates at the Autumn Statement is critical to that.”
Helen Dickinson, Chief Executive of the British Retail Consortium, said: “Retailers are staring down the barrel of a £480 million-a-year hike in their business rates bills from next Spring.
“Such a hefty increase will threaten to put renewed pressure on retail prices, as well as block new investment in our town and city centres. It is essential that the Chancellor uses the Autumn Statement to freeze business rates and give our local communities a fighting chance to thrive.”
Andrew Goodacre, CEO of the British Independent Retail Association, said: “Independent retailers are finding life on the high street incredibly difficult. Significant increases in interest rates have reduced consumer expenditure and in the first half of 2023 21,000 independent businesses closed.
“The current 75% retail discount on business rates must be retained as those smaller retailers cannot afford any increases in costs – many of them are still dealing with 10% increases in their rateable values earlier this year.”
James Lowman, Chief Executive of the Association of Convenience Stores, said: “Ongoing support with the cost of business rates is essential to incentivise investment in local high streets and shopping parades.
“We urge the Chancellor to maintain business rate reliefs and to freeze any increase in business rates at the Autumn Financial Statement. This will support the continued growth of the £600 million annual investment that local convenience stores already make in their communities.”
*Full details of ukactive’s survey will be published ahead of the Autumn Statement 2023, which takes place on Wednesday 22 November.
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