21 Oct 2010
Policy area: Town centre & Retail
Twenty four hours after the Chancellor of the Exchequer, George Osborne, announced the government’s Comprehensive Spending Review, data published by the Office of National Statistics raises concerns about the retail sector’s ability to help soak up impending public sector job cuts and support the UK’s economy.
Despite seeing a 2.4% rise in September 2010 compared with September 2009, retail sales fell for the second month in a row.
Liz Peace, chief executive of the British Property Federation (BPF), said: “It wasn’t all cheer for retailers and commercial property owners in yesterday’s Comprehensive Spending Review, at a time when the retail sector is showing signs of fragile recovery.
“Despite calling for an end to empty property rates in our submission to ministers before the publication of the Comprehensive Spending Review, this burden is still in place and seriously damaging the retail sector as a whole.”
The previous government removed this relief from business rates for empty property, leaving swathes of empty boarded up shops in high streets across the country. The BPF’s pre-Comprehensive Spending Review submission urged ministers to reinstate this relief to reinvigorate the retail sector.
Previously empty shops were liable for half their rates bills, since then they have been taxed the full amount, despite the lack of rental income. This is a tax that hurts occupiers as much as landlords since many retailers own their own shops or have long term leases they cannot walk away from.
Liz Peace commented: “The enhanced economic activity that would have resulted from reinstating this relief would have compensated for a substantial part of the lost tax revenue, whilst also helping the retail sector back onto its feet as an estimated 490,000 public sector workers seek alternative work over the coming years and the UK economy looks to keep its head above water.”