Retail trade union Usdaw has today responded to a HM Treasury consultation on the current business rates system and asks the Government to implement an online sales tax to fund a cut in business rates and create a level playing field between online and bricks and mortar retail.
The Coronavirus pandemic accelerated a shift to online sales with record numbers of people now shopping online. According to the British Retail Consortium, lockdown is estimated to have cost traditional ‘bricks and mortar’ non-food retailers £1.8 billion a week in lost sales. While at the same time online shopping as a proportion of all retail reached a record high of 30.7%.
Usdaw general secretary Paddy Lillis said:
“Usdaw urges the Government to tackle the growing and excessive competitive imbalance between high street stores and online retail before it’s too late. While the easing of lockdown measures has encouraged some shoppers back to the high street, the pandemic continues to pose huge challenges to the industry, with ongoing store closures and job losses across the UK.
“Business rates have long been a burden on the retail sector and have contributed massively to store closures and job losses, while at the same time stifling growth and investment. As the trade union for shopworkers, Usdaw fully supports fundamental reform, as outlined in our own industrial strategy for the retail sector.
“Retailers have been disproportionately impacted by the outdated business rates system because the retail industry in England contributes approximately £7 billion of rates annually. This is nearly one quarter of the total business rates bill and far more than any other industry. If the Government wants our High Streets to survive and thrive, it should be working to level the playing field between online and bricks and mortar retail.
“Given the strength of the economic case for keeping business rates, the massive shift to online shopping, along with the huge profits being generated by online-only retailers, the introduction of online sales tax seems like a fair and balanced approach to fund a reduction in business rates. We are hopeful that this will go some way in addressing the challenges facing the high street across the UK.”
Usdaw is calling for an urgent reform of the business rates system to include:
- Improvements to the relief system with more targeted support that mitigates the impact of rates on business and minimises any anomalies.
- A reduction in the multiplier to a more manageable and fixed level.
- A revaluation exercise by 2022 at the latest and going forward more frequent revaluations to ensure the system is more responsive to market changes and trading conditions.
- The removal of downward transitional relief which is unfairly impacting many retailers who are overpaying on their ‘true’ rate liability.
- Improvements in the ‘Check, Challenge, Appeal’ (CCA) system, especially around increased transparency regarding the evidence/methodologies used to determine valuations.
- The introduction of an online sales tax to fund a reduction in business rate for retailers. This would help to create a significant and meaningful long-term income stream for Government, reduce the mounting pressure on the sector and go some way to addressing the imbalance between online and bricks and mortar retailers.
- Clarity on funding for local authorities – business rates are a crucial source of income for Local Government. The shortfall from any reduction in business rates must be centrally funded to minimise the impact on vital public services such as transport, education and health and social care.
Usdaw’s full response to the consultation:www.usdaw.org.uk/BusinessRatesReview
Usdaw (Union of Shop, Distributive and Allied Workers)is the UK’s fifth biggest trade union with over 400,000 members. Membership has increased by more than one-third over the last couple of decades. Most Usdaw members work in the retail sector, but the union also has many members in transport, distribution, food manufacturing, chemicals and other trades.