Sainsbury’s urges government to cut business rates to boost jobs

Supermarket chain Sainsbury’s has teamed up with the Union of Shop, Distributive and Allied Workers (USDAW), which represents 148,000 of its staff, to urge the new government to deliver on its promise to reform business rates.

In a statement, Simon Roberts, the boss of Sainsbury’s said the business rates system was "no longer fit for purpose" and that current planned increases would mean thousands of closed shops and job losses, as well as almost 5.5 billion pounds of lost government revenue.

Failure to address business rate concerns could lead to 17,300 retail closures over the next ten years, new research carried out by Development Economics shows, while a 20 percent cut in retail business rates would increase government tax revenues by 70 million pounds net per annum and protect and create over 17,000 retail jobs.

The report adds that reducing the business rates burden would lead to capital being freed up for businesses to invest in new stores, in innovation and technology, while also keeping prices down for customers.

Current business rates system "no longer fit for purpose" states Sainsbury’s boss

Commenting on the research, Simon Roberts, chief executive of Sainsbury's, said: “All responsible retailers want to pay their fair share of tax, but the current business rates system has become an enormous burden on our industry. It is no longer fit for purpose. It has failed to keep pace with major changes in how customers are now shopping and how much our retail industry has changed over the last decade. As a result, it is directly causing store closures and job losses across the sector.

“We believe there is a better way - one that will contribute to higher economic growth and help our communities to thrive. Today’s report shows that reducing business rates would enable businesses to invest in more stores, creating jobs and generating prosperity. We welcome the new Government’s manifesto commitment to reform business rates and hope that it will move quickly to deliver on this promise, which would deliver real benefits for communities, employees and businesses alike.”

Paddy Lillis, general secretary of USDAW, added: “The scale of the challenge the retail industry faces is huge, with very high numbers of job losses and store closures that are scarring our high streets and communities.

“A robust plan is needed for the future of retail work that addresses both the immediate and urgent priorities facing the industry and staff, as well as wider measures to help deliver better jobs. We need a co-ordinated and inclusive approach, involving all key stakeholders.”