Imran has today in Parliament called on the Chancellor to reform the business rates system that sees smaller, independent high-street business face higher rates than those for large, multinational corporations with out of town warehouses

Questioning the Chancellor on wage growth, Imran declared that wage growth for those employed in many city centres such as Bradford was being held back by retailers who face disproportionate business rates that sees them pay just as much as online retailers, despite lower turnovers, which forces them to cut jobs and wages, and he urged the Chancellor to commit to reforming a business rate system he labelled as “outdated” to encourage wage growth and boost the high street economy.

The current system of business rates taxes businesses based on the ‘rateable value’ of their properties, but doesn’t take into account the turnover of the business, creating a situation where businesses based in higher rated city centres are paying just as much as that which online retailers with huge warehouses pay, despite occupying a smaller space and having a smaller turnover. Across England and Wales, Amazon paid just £38 million in business rates, compared to £36 million paid by House of Frazer, despite making a £9 billion a year profit that is 11 times that of House of Frazer.

Faced with many other costs associated with their ‘bricks and mortar’ stores that online retailers do not have, the addition of business rates, regardless of whether they make a profit or not, has forced many businesses in city centres to close, leading to abandoned and decaying high streets as businesses leave premises empty. The British Retail Consortium estimated that there are 2,500 fewer retail stores in 2018 than in 2015. Those that survive are often forced to cut costs to get by, leading to stagnating wages and job cuts.

Speaking on his call to reform the business rates system, Imran said:

“The unfair business rates system based on a model created well before the internet and online shopping piles yet another cost on top of those already borne by high street stores, and sadly for many it is too much, forcing the closure of hundreds of businesses each year that costs us lost revenue and lost jobs.

“As the economy and the way that people shop changes, the outdated business rate system that sees a high street store that is struggling to turn a profit pay outrageous business rates whilst online retailers pay next to nothing in comparison, must change with it before our high streets are annihilated.

“We need jobs, shops and businesses back on our high streets, not in lifeless out of town warehouses where profits are sucked up by multinationals and not spent in the local community, and we need our tax system to better reflect the economy of the 21^st century, which is why I am calling on the Chancellor to set out in the Autumn Budget a thorough review of business rates.”