The RPI figure of 5.6 per cent, the highest monthly rate since 1991, means an additional £350 million siphoned from the High Street into Government coffers, according to research published today by the British Retail Consortium.
In its response to Mary Portas’s Government commissioned review of the High Street the BPF pointed out the compounding effect of linking business rates to RPI meant they had doubled over the past two decades, and if government wanted to provide certainty for retailers a better system would be to have a fixed uplift, of say 2% – the UK inflation target.
If that was too expensive in the current climate, the Government should at least be using the rate of 5.2%, which was what it had budgeted its own sums on in the Budget.
Ian Fletcher, director of policy at the British Property Federation, said: “This is bad news for retailers, landlords and the economy and comes at a time when many High Streets are fighting for their survival. At the very least the Government should not be making a windfall from business rates. It budgeted its sums on the basis of 5.2% this year and should be giving the difference back.
“When finances allow the Government should also be considering two further reforms. The first to reinstate empty property relief – empty rates are an unjust tax on people deriving no income and who will be paying even more out now as a result of today’s inflation figure. Secondly, linking business rates to RPI has meant they have doubled over the last 20 years and Government should provide greater certainty for businesses by fixing the business rate uplift each year, which we have suggested should be at the rate of the inflation target, currently 2%.”
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