Ikea joins calls for an increase in business rates in Britain
Ikea has joined the chorus of retailers demanding business rates reform to prevent job losses and store closures.
Peter Jelkeby, the British furniture chain’s chief executive, warned that Labour’s proposals “don’t go far enough”, especially after the sector was hit by higher labor costs in the budget.
His move comes after more than 80 big names, including Currys and Asda, wrote to Chancellor Rachel Reeves urging her to reconsider her punitive property tax plans.
A report this week by the Center for Retail Research suggests Labour’s business policies could be deadlier than the pandemic for the High Street.
It predicts that as many as 202,000 jobs could be lost due to higher business rates and labor costs, compared to 200,164 in 2020.
The issue has been highlighted by the Mail’s Save Our High Streets campaign.
More help: Ikea says reform of business rates in Britain is needed to stem job losses
Ikea, which employs more than 10,000 staff in Britain, urged the Chancellor to take strong action on business rates.
Jelkeby said: “It is a welcome step that this government is considering changes to the business rates regime.
But the proposals do not go far enough in addressing their disproportionate impact on retail, especially in light of the cumulative burden on retailers post-Budget.
It is important that the reforms recognize this and create a more level playing field.”
Retailers will be hit this year by the £25 billion increase in employers’ national insurance contributions and an inflation-busting rise in the minimum wage.
Greene King boss Nick Mackenzie said the Budget was ‘hurting pubs at a time when the cost of doing business was already at an all-time high’.
He added: ‘Raising taxes and wages without a clear plan to reduce regulation and costs will inevitably impact investment and could mark a moment of lasting damage to the pub sector.’
Julian Metcalfe, founder of Itsu and Pret, said “empty high streets are a real concern” because in many cases business rates are as high as or higher than rental prices. “It’s heartbreaking,” he said.
‘Some costs are so high that people would not dare to start a business now. That’s bad for Britain.’ Business rates are based on the rental value of a business premises, meaning shops pay a premium compared to online giants such as Amazon.