Skip to main content Skip to footer

Kick in the Teeth for Retail and Hospitality as Chancellor misses golden opportunity

25 11 20 Why the Chancellor has Missed a Golden Opportunity in his Spending Review hero

The Chancellor’s Spending Review today has been described as a “kick in the teeth for the retail and hospitality sectors” by John Webber, Head of Business Rates at Colliers International, since there is every indication that the business rates holiday currently enjoyed by the retail and hospitality sector may well come to an end in March.


The Spending Review which laid out plans for the UK economy for the financial year 2021-22, described the country as facing  an “economic emergency,” and explained how the Government will spend taxpayers’ money, including support for NHS, education, defence, roads, and police. Detail on what to do with the “elephant in the room” – tackling business rates – was ominously omitted in the Chancellor’s speech, with the exception of announcing a freeze of the business rates multiplier in 2021-22 in the small print - a “tiny concession” given the tiny rate of CPI.

According to John Webber, Heads of Business Rates at Colliers International, this is “Desperately disappointing”. “The Chancellor said this Review was all about “Jobs, Jobs, Jobs”, but has forecast that, despite the measures he has revealed, the UK will see 2.6 million unemployed by Q2 next year. It is incomprehensible how he can say that on one hand, but then ignore the cries of crucial sectors of our economy, particularly the retail and leisure/ hospitality sectors, who need clarity over whether they will facing massive business rates rises again in April next year, once their COVID-19 business rates “holiday” comes to an end.”

“And given that separately, the OBR has stated that business rates income is to grow by £12.8 billion next year, this worryingly indicates a probable end of the rates holiday and a return to unsustainable bills next year.”

The Chancellor has said he will wait until the New Year to announce on the “Rates issue” and decide on further reliefs. “By then many retailers will have made their plans for the forthcoming year and many of these will include closures and job losses in anticipation of the big bills coming through the letterbox.” adds Webber.

“We are also disappointed that despite promises to hear about the first tranche of the consultation on business rates reform this Autumn, this too has been kicked into the New Year.”

Business rates contribute £26 billion net to the economy, but the system, in its normal form, has been largely criticized as outdated and unfairly geared against the retail sector, putting bricks and mortar retailers at a disadvantage to purely on-line rivals or to other sectors. Criticisms were strong even before the impact of COVID-19 had taken its toll.

The business rates team at Colliers say the Chancellor should have:

  • Announced an extension of the current 2020/2021 100% business rates holiday for the retail and hospitality sectors which is due to end next March, for another six or even twelve months from April 2021; giving the sector time to recover from the impact of the COVID-19 pandemic. “It is indeed inconceivable that retailers will be able to take back their high business rates commitments in April, particularly as they have missed their normal lucrative November trading period.” Says Webber.

  • Provided business rates relief for other sectors who have not had the advantages of the business rates holiday. This includes the office sector where many businesses were prohibited from using their offices during lockdown and workers were told to work from home. The financial implications have been dramatic. Colliers appealed to the Government to introduce a business rates holiday for the period of lockdown and to introduce some reliefs for the disruption to businesses seen since. As we get through a second period of lockdown, this is more important than ever, and it is disappointing this has not been addressed.

  • Extended the deadline dates for applications for the lockdown grants so that businesses can take advantage of the forthcoming relaxation of current State Aid limits. At current limitation levels, only the smallest businesses can benefit from grants. Yet these larger employers are the ones responsible for maintaining most jobs.

  • Made good on the promise to bring in proper business rates reform. The current system is outdated, and the Government had said it would report back on the first tranche of its consultation on reform this Autumn. However, as we move into December, nothing has been said. Colliers has urged the Government to bring about an immediate reduction in the multiplier to £0.30, from current levels of £0.51 - making business rates a more affordable tax across the board, so all rate payers can benefit. There should also be an immediate reform of the reliefs system also.

  • Brought in a business rates arrears moratorium until April 2021 at least for those businesses, who because of the pandemic have been unable to pay their business rates bills, allowing businesses a chance to sort out their finances. Many hard-pressed businesses are now receiving enforcement orders from their billing authorities for failure to pay their rates bills. We have been urging the Government to instruct Local Billing Authorities to show flexibility and support to business rather than stepping up the heavy-handed court summons.

John Webber, Head of Business Rates at Colliers said “The Chancellor had a golden opportunity today to bring some relief to businesses across the country who are struggling as a result of the unprecedented circumstances we have seen in 2020. It has been disappointing that he gave little mention to business rates nor reassured businesses that they will not be faced with either untenable bills next Spring or court action now.”

“We urge him to make further announcements in the month ahead, particularly before we end the year. This issue is not going away and failure to clarify the position until the New Year may well lead to even more business closures and job losses across the country than the high numbers already forecast.”

View our Business Rates services


Related Experts

John Webber

Head of Rating

Rating

Birmingham

I have over 30 years’ experience in the rating industry and lead a 90 plus rating team at Colliers International.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers International Management Executive as well as sitting on the company’s promotion panel. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am vocal commentator on the 2017 Revaluation.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers International). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  John sits on the RICS Rating Diploma Committee having passed the prestigious qualification in 2014.

Philip Harrison and I founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating Team is now a leading brand in its own right.

View expert

Suzy Simpson

Head of Content, Communications and PR

PR

London - West End

As Head of Content, Communications & PR for Colliers in the UK, I am responsible for driving the strategic direction of corporate communications, media relations, and the programming and production of multi-channel content to engage external and internal audiences across the UK.

Get in touch for help with: 

  • Content Communication Strategy 
  • Media Relations
  • Corporate & Internal Communications
  • Media Training & Personal Brand Training

 

View expert