The Chancellor’s economic update to the House of Commons today was disappointing says John Webber, Head of Business Rates at Colliers International, in the fact that yet again it failed to mention the “elephant in the room “ – either business rates reform or any policy concerning an extension of the business rates holiday for the beleaguered retail, hospitality and leisure sectors.
“We are in dire times” continued John Webber, “and the Chancellor did not deny this. Our economy has shrunk 6.1% from before the crisis and 800,000 jobs have been lost since February. And the Chancellor spelled out that it will get worse before it gets better.”
Research last week from the British Chamber of Commerce suggested that the restrictions caused by the latest national lockdown will lead the country on course for a double-dip recession in the first quarter of 2021. And the Federation of Small Businesses has said at least 250,000 UK small businesses are set to fold without further help from the government. “The message from business is clear- the level of support is just not enough for businesses to face this emergency.”
One area the Chancellor seems determined to ignore are business rates payments still hanging over heads of the distressed retail, hospitality and leisure sectors. Businesses in the sector are expected to pay around £12 billion in business rates from April if there is no extension of the current rates holiday (Retail paying £7.625 billion and Hospitality/restaurants £4.375 billion). Given that the major supermarkets, who are still currently trading, pay around £2billion of this bill, that means that non- essential retail and the restaurant/ hospitality sector, currently closed due to lockdown, will need to find around £10 billion to meet their business rates liabilities from the end of March. This is totally infeasible for many businesses.
Webber continued, “The Government’s latest grant schemes, are all very well, but we are hearing that to some extent they are a post code lottery- with some boroughs processing grants at much greater speeds to others- and some local authorities have not even started yet. The position on State Aid restrictions has also not been confirmed, so many businesses are unsure of what they can claim and are still missing out.”
“ Whilst we welcome the financial support for businesses through the grants system – essential given the latest Lockdown- we ask the Chancellor for some clarity going forward- both in terms of State Aid restrictions and business rates reliefs post March 2021, particularly for the struggling retail, hospitality and leisure sectors. It is disappointing that yet again he has missed a golden opportunity to tackle this issue and has put his head in the sand that all will be Ok in the Spring.”