One of the UK’s biggest high street retailers has backed calls for the Government to scrap the planned postponement of the business rates revaluation.
Discount retailer Poundland, has thrown its weight behind Colliers International’s campaign to reverse the decision by signing an online Government petition.
The company, which operates around 300 stores across the UK, and employs around 10,000 people, said the decision to postpone the 2015 revaluation until 2017 was “reckless” given the current decline of the retail market and would only serve to continue the injustice of businesses paying inflated business rates in a depressed climate.
The retailer said it would also lead to more casualties on the high street, following the collapse of household names such as Clintons, Peacocks, JJB Sports and Comet.
Ben Wall, national portfolio manager at Poundland, said: “It is difficult to understand the logic behind the decision to delay the rating revaluation as it will impact many retailers who are already struggling and facing financial hardship.
“Postponing the revaluation only serves to delay the structured recalibration of the high street, which is needed for it to survive. I strongly believe that the Government is making a reckless decision given the fragile state of the retail sector.”
The proposal to delay the 2015 rating revaluation until 2017 is one of a number of measures being put forward by the Department for Communities and Local Government as part of the Growth and Infrastructure Bill.
If implemented, businesses will continue to pay business rates based on property values in 2008, instead of current values, which are considerably less.
According to Mr Wall, the decision will have a major impact on Poundland’s national property portfolio and its future investment decisions.
“Our business relies upon the estimates of business rates during the period of the rating list, which are key to the financial models on which we base our decisions on opening new stores, relocating and extending existing properties,” he said.
“The postponement of the revaluation until 2017 will surely have unintended consequences and will mean that, in some situations, new store viability will be affected. Not only that, but with each new store employing around 30 people, our ability to create jobs will be significantly reduced.
“It is for these reasons, and the fact that it will aid the continuation of increasing vacancy levels on the high street, that we have signed the online petition to urge the Government to reconsider its position on this issue.”
Since the announcement to postpone the rating revaluation was made by Brandon Lewis MP, Parliamentary Under Secretary of State for Communities and Local Government, businesses have reacted to express their disappointment for the plans.
Property consultancy Colliers International launched an e-petition on the Government website www.direct.gov.uk to voice its concern over the decision and has been urging businesses in the West Midlands to show their support by adding their names to the list.
John Webber, Colliers International’s Birmingham-based national head of rating, said: “Whilst the impact of the rating revaluation postponement will hit the retail sector the hardest, the fallout will be felt far and wide. Poundland is just one example of the effect the decision will have on business growth but I’m sure there are many more retailers, both large and small, who are having to revise their investment plans over the next few years as a result of the extra business rates they will have to pay.
“The Government seems determined to go ahead with the proposed plan but with enough pressure from business it will hopefully see sense and reverse what is frankly a ludicrous idea.”