Food prices will rise under Andy Burnham’s plan to hike business rates for warehouses and other large developments, trade bodies have warned.
The likely next PM has said the tax hike for large developments could pay for a 100% business rates discount for small, single-site high street shops and restaurants, as well as a 20% cut for pubs and music venues.
Trade bodies have reacted with disbelief at the proposals, after the government raised business rates for all large property occupiers earlier this year in order to fund a cut for smaller retail, hospitality and leisure premises.
“Andy Burnham’s proposed changes to business rates risk fuelling food inflation, disrupting public sector supply chains, and undermining competition,” said FWD CEO James Bielby.
“While the rationale behind this idea may be to tax the warehouses of online giants, it is essential to differentiate them from B2B food and drink wholesalers, who play a vital role in feeding the nation.
“If wholesalers are caught by these changes, they will be forced to raise food prices and pass the costs on to those local businesses. This will lead to a further spike in food inflation and undermine the very goal of redressing the imbalance between high street retailers and online giants, who often minimise their UK tax liabilities by being based abroad.”
Dominic Curran, head of communications at Real Estate UK, formerly the British Property Federation, said: “We already have a ‘warehouse tax’, as since last year there has been a higher multiplier for larger, more valuable properties which funds a cut for retail, hospitality and leisure properties.
“Less than 10% of the properties impacted by the higher rate are distribution facilities, with the tax also hitting large offices, labs, manufacturing plants and other properties which support the high-growth sectors government wants to nurture, as well as public buildings like universities and courts.
“Within retail, most warehouses are operated by retailers who also have high street shops, so it’s just redistributing the tax burden for them, rather than lowering it.”
BRC CEO Helen Dickinson said: “Town and city centres succeed when large and small shops thrive together, so the answer cannot be moving taxes from one part of retail to another.
“The priority must be reducing the overall burden on retail and hospitality businesses to support the investment and jobs needed to revitalise our high streets and keep prices down for customers.”
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