Mary Portas calls on Chancellor to freeze business rates

Updated: 
The Prince & Princess of Wales Hospice auction - London

The Government's former high street tsar Mary Portas is calling for the Chancellor to freeze business rates ahead of Wednesday's Budget, saying the future of independent retailers hangs in the balance.

The so-called "Queen of Shops" has said that the Government should do more to help retailers than just swapping the measure it uses to determine the annual increase of business rates from the higher Retail Price Index (RPI) to the lower Consumer Prices Index (CPI) - an option which business rates advisory firm Altus Group says may be considered by the Chancellor.

The retail expert, once hired by David Cameron to find a way of saving Britain's high streets, advocated for the switch seven years ago, which the Government has committed to do from 2020.

However, Ms Portas said that the move will end up being "too little, too late".

"It's imperative that Government seriously considers freezing business rates so that our independent retailers have a fighting chance of survival in today's shaky and volatile market," she said.

Business rates are currently on track to rise by a total of £1.15 billion in England from April 1 next year, being linked to the RPI rate of 3.9% in September.

Altus Group said that even if Chancellor Philip Hammond were to limit the increase to the September CPI rate of 3%, it would still increase business rates by a total of £884 million, with the retail sector shouldering £226 million of the rise.

A number of firms across the country have been left reeling following the revaluation of business rates earlier this year, which accounted for property price changes over the last seven years.

Robert Hayton, executive vice president of Altus Group, said: "Whilst the indications are that the Chancellor is signalling a concession in tax rises of about £266 million, he should be bolder and go further."

A Freedom of Information request filed by Altus shows that in the five months following the revaluation, a total of 81,083 premises liable for business rates were hauled before a magistrate after failing to pay their rates.

Altus said that the figures fuel claims that the system is "criminalising struggling firms".

Mr Hayton said: "There are two factors at play here. One is that councils are taking action on non-payment much earlier than in the past, but the main issue is one of affordability.

"It isn't only those whose values have increased that are struggling. The current, deeply unfair, system of transitional adjustment severely limits the amount by which bills can go down, meaning many businesses in locations where values are falling are paying disproportionate bills."

He added: "A rates liability freeze is the minimum that the Chancellor should do for business in Wednesday's Budget."