Retail bosses have criticised Chancellor Jeremy Hunt for ignoring the industry’s calls for wider reform on business rates and apprenticeship levy rules in his Spring Budget announcement on Wednesday.
Currys chief executive Alex Baldock branded the Budget “bitterly disappointing” after Hunt “yet again failed to address retailers’ business rates burden”.
“It’s no wonder that more and more stores are having to close their doors when you look at all the cost retailers are facing,” he said.
“Sky high business rates, coupled with big increases to wages, and misjudged proposals like those on recycling, heap ever higher costs on those of us with physical stores.”
Baldock added the move will result in “higher inflation, lower growth and fewer jobs”.
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However, according to Hunt’s estimates with the Office for Budget Responsibility, inflation is expected to drop below 2% in the next two months.
New Look CEO Helen Connolly also expressed dismay at the Chancellor’s decision not to readjust the standard multiplier for business rates or agree to wider reform.
She said: “The retail industry is unanimous in its view that the business rates system is not fit for purpose and needs fundamental reform.
“Our sector is the backbone of communities up and down the country, contributing significantly to the UK economy.
“It would be a misstep by the government to not consider making our circumstances for operating easier, otherwise they risk losing out on the long-term growth of retail.”
Iceland boss Richard Walker also reacted to the Chancellor’s decision, sharing his grievances on Twitter.
There’s only one budget that matters and that’s the family budget of my customers, who I doubt will be singing Mr Hunt’s praises.
The overall tax take remains at a record high, debt is going up not down, yet the public sector is completely broken. Local services are on their…
— Richard Walker (@icelandrichard) March 6, 2024
Similarly, Unibail-Rodamco-Westfield chief operating officer Scott Parsons labelled the Budget as an “utter disappointment”.
“It’s deeply frustrating that calls from over 500 sector leaders to halt the tourist tax have been ignored, despite the compelling data which demonstrates the critical importance of tax-free shopping for the UK economy,” he said.
“What’s more, the existing business rates system places our high streets at a massive disadvantage compared to those in other European cities, with UK retailers shouldering a financial load nearly ten times more than brands on the continent.
“Permanently lowering rates is the most meaningful way to support the sustainable, long-term growth of the retail industry and show the world once and for all that the UK is open for investment.”
British Retail Consortium chief executive Helen Dickinson labelled the current business rates model was “disproportionate, destructive, and any government that is serious about growing the economy must address this as a matter of urgency”.
She added that Hunt had missed a key opportunity to fix the “broken” Apprenticeship Levy.
“This inflexible, outdated system hinders retailers from effectively investing in their workforce. Its inflexibility has deprived tens of thousands of people across the country of potential apprenticeships and training opportunities and stands in the way of career progression for many people working in the industry,” said Dickinson.
“For many retailers, who are unable to draw effectively from the Levy funds they put in, the system is little more than a tax, adding the inflationary impacts of rising business rates, labour costs, and supply chain pressures.”
Earlier this week, M&S boss Stuart Machin described running a retailer as “running up a downwards escalator with a rucksack on your back” as he made a last-ditch attempt to reform business rates and the Apprenticeship levy.
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