Supermarket bosses pressure Chancellor to level up through business rates reform

Morrisons has joined with other supermarkets and retail groups to pressure the Chancellor Rishi Sunak to reform business rates in a way that will help to level up the UK economy.

Morrisons chief executive David Potts was a co-signatory of a letter, alongside Tesco UK boss Jason Tarry, Co-op Group chief executive Steve Murrells, and retail associations and union leaders.

The letter, which was revealed by Sky News, said the pandemic had “shown the critical role that shops plays as an anchor for local communities”.

It said: “Beyond jobs, the sector drives footfall for other businesses, is one of the largest local taxpayers, provides vital local services (such as pharmacies), supports local charities and provides locations for local people to meet and socialise.”

The retail leaders believe a permanent 20% reduction in business rates would create 10,000 jobs across their industry in 50 constituencies that are most in need of support.

However it highlights that those areas which have a disproportionate business rates bill are often those most in need of levelling-up.

It added: “As an industry, retail is the largest private sector employer and provides proportionately more jobs in constituencies in need of ‘levelling up’.

“As other major industries have receded from towns and cities across the North and Midlands, retail has become the bedrock of these economies, providing a disproportionately high number of jobs with wages and productivity growing faster than comparable sectors.”

The Chancellor is under pressure to balance the needs and taxes of physical retail with its digital rivals.

Business rates have long been a controversial issue, with successive governments nervous after widespread reform. In July a revaluation was postponed until 2023, with the delay justified so that changes could “better reflect the impact of Covid-19”.