Chancellor’s Autumn Statement Ignores Reduction of Business Rates

A study carried out by the British Retail Consortium (BRC) also found that three quarters of MPs believe trading costs should be brought under control to reinvigorate the UK’s high streets.

The Chancellor instead offered relief from rates to newly-built commercial properties 18 months after completion until September 2016.

Other announcements made during the Autumn Statement included cutting Defra’s budget by £55 million over the next two years and increasing the threshold for annual investment allowance for farm businesses from £25,000 to £250,000 for two years.

The Food and Drink Federation welcomed the changes to capital allowances and the reduction of the rate of corporation tax by one to 21%.

Melanie Leech, director general at the Food and Drink Federation, said, “The Chancellor’s announcements on increasing the annual investment allowance and reducing the headline rate of corporation tax should both stimulate business investment. This is great news, particularly for an industry which encompasses businesses of all sizes – from global companies choosing to invest in the UK through to small to medium-sized enterprises looking to grow their operations in response to growing overseas demand for food and drink products.

“Our industry has had seven consecutive years of export growth and we know we can continue to expand the export of high-quality British food and drink. We are pleased that UK Trade and Investment has recently strengthened its commitment to support food and drink businesses and welcome today’s announcement of its funding increase and of the new export finance facility which should also help even more companies to grow through export.”

Stephen Robertson, director general of the British Retail Consortium, added, “Many of the issues we’ve campaigned about are now receiving much more attention and it’s reassuring that the importance of high streets is now widely recognised. The Government can take credit for a high-profile review of high streets and for planning reforms that encourage investment. But continued weak consumer spending and rising business costs mean we’re seeing more and more empty shops.

“A business rates freeze is essential to offer immediate relief, but there is much more still to be done if high streets are to go on providing jobs and services. If action isn’t taken, the cost of that failure will be borne by communities across the country in the form of more boarded-up premises and an acceleration of the downward spiral that’s gripping too many town centres.

“The Chancellor’s failure to offer immediate support for struggling high streets by announcing a business rates freeze is disappointing. Giving a grace period to new-build premises should encourage speculative investment but, with one in nine shops already standing empty, more help to keep high street businesses trading in them would have been better.

“Business rates rose dramatically in both 2011 and 2012, adding more than £0.5 billion to retailers’ rates bills. Shop vacancy numbers and retail employment are already being hit. The Chancellor should have removed the threat of a further 2.6%, £175 million increase next April to avoid more empty shops. It’s welcome news that small retailers will benefit from relief for an extra year, but retail chief executives tell us a third successive substantial rates hike will deliver a further blow to investment and job creation. It is not too late for the Chancellor to offer a freeze to prevent that.”