Leading representatives from Wales' retail sector have written to
Finance Secretary, , urging him to abandon plans
for a new surtax on their industry.
Together the Welsh Retail Consortium and British Independent
Retailers Association warn that the surtax would unfairly
penalize businesses, putting them at a competitive disadvantage
compared with counterparts across the border. The call comes
ahead of the expected ratification of the Welsh Government's
Budget.
While the Finance Secretary has expressed support for smaller
retailers, the joint letter stresses that both small and larger
businesses are vital to healthy high streets. “Retail is the
lifeblood of Welsh high streets,” it states. “Whether independent
shops or national chains, these businesses create jobs, drive
growth, and deliver essential services for communities across
Wales.”
The joint letter was submitted to Mr Drakeford in recent days.
The full text reads:
Dear Finance Secretary,
Scrap the surtax on retail premises
We acknowledge the positive steps the Welsh Government has
taken in recent years, including more regular revaluations and,
in the forthcoming Budget, the proposed lower multiplier for the
smallest retail premises. Acknowledging the rate burden on
retailers, through the introduction of a lower multiplier for
these businesses is a welcome and significant step forward and
one which should be maintained.
However, we are writing jointly ahead of the Welsh Budget to
urge you to reconsider introducing a higher business rates
multiplier/surtax for retail businesses. Our sector currently
pays disproportionately more in business rates compared to other
industries. We believe that all retail businesses should be
removed from the higher multiplier, and that this can be
accommodated within the existing business rates
framework.
Medium-sized and larger businesses - and our high streets and
town and city centres - would be negatively affected by the
proposed surtax. These are the very businesses that anchor our
communities and which smaller retail, hospitality, cultural, and
leisure businesses rely upon for footfall, and that customers
rely on for essential and value for money
products.
The proposed surtax on medium-sized and larger stores risks
worsening existing cost pressures and customer prices.
Furthermore, the sheer chasm between the multiplier that will
apply to the sector in Wales compared to England – 51.5p in the £
v 43.2p in the £ – risks shifting investment out of Wales. Making
Wales a materially more expensive place to operate would make
economic recovery more challenging. It would not serve the
interests of the Welsh economy if retailers were incentivised to
invest in Cheltenham or Chester rather than Cardiff, Caerphilly,
or Carmarthen.
A thriving Welsh retail sector supports local jobs,
investment in town and city centres, and ultimately contributes
to tax revenues. Continued investment in premises is essential to
keep these businesses attractive to customers and minimise the
number of vacant premises.
Our organisations have a range of proposals for how the
business rates system could better support economic recovery in
both the short and long term. We welcome your efforts to mitigate
the impact on smaller retailers, and your recognition of the
disproportionate burden business rates place on retail. However,
we strongly believe the Welsh Budget should reflect the
challenges facing retail by permanently exempting the industry
from the higher rates surtax.
Your sincerely,
Sara Jones, Welsh Retail Consortium
Andrew Goodacre, British Independent Retailers
Association
