MORE than 40,000 high street shops will close by 2020 unless George Osborne softens a “£14bn business rates bombshell”, store bosses and campaigners have warned.
Industry chiefs told the Treasury this week that nearly a third of high street stores could disappear because the Chancellor is “sucking the life out of town centres” with sky-high business rates.
Officials have already met with Treasury Secretary David Gauke privately to warn him.
The trade body says that combined with the cost of meeting the new Living Wage, and a levy to fund new apprenticeships, retailers face a £14bn hike in costs over the next four years.
BRC chief Helen Dickinson told the Sun newspaper yesterday: “The Government needs to wake up and realise that its policies are going to be a tragic failure unless there’s a major rethink.”
The Treasury generates more than £20bn from rates each year – with more than £7bn coming from high street stores. Last year the Chancellor announced plans to devolve rate setting powers to local councils – but this transfer won’t take place until 2020 and many fear this will result in costs escalating further.
The BRC warning came as the CBI warned businesses were facing a crippling burden from “policy costs” – such as rates and the Apprenticeship Levy – and warned it was hitting UK companies’ ability to “drive growth”.
CBI chief Carolyn Fairbairn said: “The danger of this rising policy burden is that it holds back businesses, particularly smaller firms.”