Marks & Spencer CEO Stuart Machin has become the latest retail boss to call on the government to freeze business rates, calling them “daylight robbery”.
Machin wrote a plea to chancellor Jeremy Hunt to freeze business rates in his autumn statement, which is due to be announced this Thursday (17 November), saying they “have zero link to profits or, indeed, reality”.
His statement follows this weekend’s news that the so-called Retail Jobs Alliance – comprising of a raft of retail giants including Tesco, Sainsbury’s and Iceland – wrote a letter to the chancellor and PM Rishi Sunak.
The group, which has previously called on the government to review the current business rates system, renewed calls for Hunt to reconsider the sharp rise in business rates that is set to come into force next April.
The upcoming 10% business rates increase – in line with inflation – is expected to bring in an extra £3bn to the Treasury, but retail chiefs argue the industry is already at “breaking point” and that the move risks “pushing some retailers under”.
The government’s energy support package is also set to expire in April next year.
“Running a shop costs a lot more than running an online business, and a large part of that is down to business rates which have zero link to profits or, indeed, reality,” Machin said in an open letter run by the Daily Mail.
“It’s why the total tax rate for retailers is around 70%, and why they pay 25% of all business rates despite being 5% of the economy.
“And it’s why high streets and city centres are increasingly full of vacancies and dodgy shops; rates have gone up by the same amount as retail property values have gone down. Frankly it’s daylight robbery.”
Machin added that M&S was asking the government in the coming fiscal update for “a fair shot”, which meant reducing the rates multiplier back to its original 1990 level, from over 50p in the pound down to 35p in the pound.
”We don’t want handouts – we just want fairness.”
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