Blow to firms as Government dashes hopes that business rates system will be ditched
HOPES that the much-loathed business rates system would be totally ditched in new reforms were dashed by the Government yesterday.
Exchequer Secretary James Murray confirmed at the Labour conference that any fresh system would still aim to raise the same sum of money from firms.
Speaking of the overhaul, the Ealing North MP — who has responsibility for the rates — told a British Retail Consortium fringe event in Liverpool: “It’s within the current envelope. It’s all about raising the same amount of money overall, that’s the commitment.”
The Treasury is expected to collect £30billion in the next year from unavoidable business rates — of which retail will pay around £8billion, some 11 per cent of the entire sector’s profits.
There are warnings a failure to create a fairer system will lead to 17,300 more shop closures over the next decade.
The British Retail Consortium argues that retail, as the biggest private sector employer, pays more than its fair share and should have a 20 per cent “rates corrector”.
Shop bosses have argued that rates are the biggest barrier to hiring new staff.
Nick Stowe, CEO of Monsoon Accessorize, which shut 100 shops in the aftermath of the pandemic, said: “We’re trying to convince ourselves to open in places like Durham and it’s really difficult.
We have landlords giving us stores rent-free, but rates are still so high, we can’t do it.”
Confirming he had cut staff, he added: “The knock-on effect is we’re busy trying to squeeze down things that I’m sure the Labour Government don’t want us to squeeze down.”
Matalan boss Jo Whitfield said business rates were a “real barrier” for retail and it was hard to justify keeping shops open in areas of falling sales.
She said the BRC plan for a rates corrector would “almost immediately” prompt retailers to invest in stores.
Mr Murray said Labour wanted to level the playing field between the high street and online, but the BRC called business rates a 20-year failure.
Bank rules out zero interest
INTEREST rates are unlikely to fall back to near zero, the Governor of the Bank of England has warned.
Dashing homeowners’ hopes, Andrew Bailey said he would not expect a return of ultra-low rates unless there were “very big shocks” to the economy.
He expects the rates path to be “downwards” but they would be lowered “gradually”. The market expects them to be nearer 3 per cent by the end of next year, compared to the current rate of 5 per cent.
Mr Bailey, halfway through his eight-year term as Bank boss, said of his fixed tenure: “I do hope the second half will be quieter than the first — but the bar’s quite low for that one.” He accepted criticism as “part of public life”.
We’ll come to Wrexham
THE Hollywood effect has trickled into the rental market — with Wrexham now the busiest UK area for tenants.
The Welsh city has boomed since Ryan Reynolds and Rob McElhenney bought its football club in 2021 and Netflix screened its Welcome to Wrexham series.
It now has 54 rental inquiries for every property, according to Rightmove. The demand is nearly three times the national average of 19 inquiries.
Glasgow is the second most in-demand city, with 52 inquiries per property, and Bristol close behind on 51.
High demand has kept average rents rising by 8.5 per cent — four times the average rate of inflation, official figures show.
Tim Bannister at Rightmove said: “To be receiving upwards of 50 inquiries per property is astonishing. It shows work still needs to be done to improve the balance of supply and demand.”
As sweet as Pi...
BRITAIN’S tech credentials got a much-needed boost after Raspberry Pi reported better-than-expected sales, a few months after listing.
The Cambridge-based firm, which makes cheap computers to help teach kids to code, reported a 61 per cent jump in sales to £107.9million in the six months to June.
Raspberry Pi was promoted to the FTSE 250 in July with a £541million float.
Its shares rose by 6.7 per cent yesterday to 371.6p, valuing it at £673.4million.
Boss Eben Upton hailed his “extraordinary team”.
Irn Bru’s fizzed up by Euros
THE maker of Irn Bru said its tongue-in-cheek Euros campaign had paid off, with strong sales of “Scotland’s other national drink”.
AG Barr yesterday reported it had shrugged off a soggy summer and Scotland’s early exit in the football tournament with higher sales and market share growth in England.
Its cheeky advert played on the German word for football team, “Mannschaft” and it was deemed one of the best campaigns of the Euros.
Overall, the soft drink maker posted a 5.2 per cent rise in overall sales to £221.3million, but its pre-tax profits were 10 per cent lower due to the closure of its delivery business, Barr Direct.
Euan Sutherland, the former Superdry, Saga and Co-op chief who recently took charge, said “AG Barr’s an excellent business with exciting, tangible and deliverable growth opportunity.”
Bejing's bounce
GLOBAL stock markets hit a record high yesterday as China began a stimulus blitz in a bid to turn around its post-Covid economic slump.
In a rare public briefing, the People’s Bank of China laid out plans to cut interest rates, which lowers borrowing costs for firms and buyers, with separate measures to stabilise the stock market.
Hope spread across Asia and Europe, sending the FTSE 100 up. London-listed Burberry saw a huge surge as it prepared for a growing demand for fashion in China.
Pay rise a red card
CARD FACTORY, the budget greetings retailer, has blamed the rising national living wage for a near-halving of its profits.
The chain, which has more than 1,070 stores across the UK and Ireland, reported a 43 per cent slump to £14million, despite sales rising by 3.7 per cent in the six months to July.
The firm said it had faced £64.4million of extra staffing costs compared to last year. Its value slumped by a fifth yesterday as investors dumped shares.
THE cost of fixing a blocked sink or broken boiler can now be split on Klarna’s Buy Now Pay Later scheme.
The Swedish finance firm has partnered with small business platform XERO so tradesmen can accept payments in interest-free instalments.