Fix broken rates system, retailers warn Labour
- Firms including Louboutin and Mulberry want tax-free tourist shopping back
Concern: Louboutin founder Christian Louboutin
Leading retailers have warned Labour it must follow through on its manifesto pledges to reform the broken business rates system.
Business rates are a local levy paid based on the value of a commercial property – meaning shops are paying a premium in comparison to online giants such as Amazon.
Alex Baldock, chief executive of Currys, urged new Chancellor Rachel Reeves to put replacing the property tax system for shops at the top of her to-do list.
The retail sector supplies 3million jobs and he believes it could 'play a starring role' in helping Prime Minister Keir Starmer 'power growth, jobs and prosperity for all'. He added: 'Most of all, we must urgently fix the broken, damaging and unfair burden of business rates.'
There will also be pressure on Labour to take heed of calls to scrap a hated tourist tax and re-introduce a valuable VAT-free shopping incentive for overseas visitors.
Firms including Louboutin (founded by Christian Louboutin), Mulberry, Marks & Spencer, Kurt Geiger and Selfridges have said the lack of tax-free shopping is deterring tourists from spending at UK shops.
Labour's manifesto promises to 'replace the business rates system, so we can raise the same revenue but in a fairer way'.
It says the system 'disincentivises investment, creates uncertainty and places an undue burden on our high streets'.
Retailers will be eager to see the details of Labour's reforms and for rapid action after years of pleading with ministers to make changes.
This week Sainsbury's also urged for reform, saying it is 'essential to grow our economy'. Companies pay 54.6p for every pound of their property's rateable value after it went up in April.
Retailers had been furious as the increase was based on September 2023's out-of-date inflation figure of 6.7 per cent.
High Street bosses have also asked for tweaks to apprenticeship funding to make the rules more flexible and for fewer planning delays. Rachel Reeves has insisted that she wants to become the most 'pro-growth Chancellor' in UK history.
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