The boss of Marks & Spencer has called on the Chancellor to use the increase in corporation tax to overhaul business rates and rescue the High Street.
Steve Rowe said the ‘seismic upheaval’ caused by the pandemic would lead to thousands more lost jobs unless the ‘unbearable yoke’ of business rates is slashed.
Rowe, 53, urged Rishi Sunak to use a planned rise in corporation tax, expected at the March 3 Budget, to pay for it.
Plea: Steve Rowe said the ‘seismic upheaval’ caused by the pandemic would lead to thousands more lost jobs unless the ‘unbearable yoke’ of business rates is slashed
His comments come after Sunak caused consternation as he delayed the business rates review until the autumn.
The pandemic has accelerated shoppers’ move online, heightening calls for sky-high taxes on commercial property – rates – to be overhauled.
More than 200,000 shop jobs were lost last year and 16,000 stores were forced to close. Rowe, who became chief executive of M&S in 2016, said: ‘The ever-increasing burden of rates has become an unbearable yoke around the neck of thousands of shopkeepers, and their communities.
‘Our sector faces the fight of its life and the Government needs to act on its forthcoming review on rates. The fairest way to tax is based on profit. By our calculations, a minimal increase in corporation tax would fund our proposed reduction for all ratepayers.’
Under the blueprint put forward by the retail veteran, rates would fall by a third. This could be funded with a corporation tax rise from 19 to 22 per cent.
The retail sector pays a quarter of all rates, even though it only makes up five per cent of the economy. Tesco has led calls for an online sales tax to hit the likes of Amazon, while Next favours increasing rates paid on warehouses to fund a cut for high street premises.
The call for permanent reform has been backed by a string of well-known shop chains and restaurateurs.
Kevin O’Byrne, finance chief at Sainsbury’s, said: ‘Taxation is completely out of step with the way retail and customer shopping patterns have changed. Without urgent reform, it will be increasingly challenging for high street shops to survive.’
Julian Dunkerton, the founder of Superdry, who backs an online sales tax, said: ‘The business rates system is killing our high streets. If nothing is done, it will cause damage to our town centres which they will never come back from.’
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