The Chancellor’s economic update to the House of Commons was described as “disappointing” by John Webber, head of business rates, Colliers International.
Rishi Sunak failed to mention 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,” said 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 would mean the country was 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.”
Businesses in the sector were expected to pay around £12bn in business rates from April if there is no extension of the current rates holiday (Retail paying £7.625bn and Hospitality/restaurants £4.375bn). Given that the major supermarkets, who are still currently trading, pay around £2bn of this bill, that means that non-essential retail and the restaurant/ hospitality sector, currently closed due to lockdown, would need to find around £10bn to meet their business rates liabilities from the end of March.
Webber said: “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.”