James Moore: Osborne needs to rescue retail from rates regime

Outlook Shoppers, you've never had it so good. Well, that might be over-egging the pudding just a bit, but in austerity Britain where wages are down, taxes and most bills are up, at least the shops are cheap.

So says the British Retail Consortium anyway.

The BRC will today unveil figures showing that shop price inflation came in at just 1.2 per cent for the year to the end of February, the lowest for two years.

Food prices are continuing to rise rapidly, by 4.2 per cent. But that doesn't include various "money off your bill" promotions, and pretty much everything else (clothes, furniture, electricals) is actually cheaper than it was last year.

Retailers have had to learn a hard and expensive lesson: If you aren't willing to tickle their fancies with promotions and deep discounts, shoppers will stay at home. And offline while they're there.

But there is trouble brewing. Retailers already have scant room for manoeuvre, and the problem is going to get worse in April when business rates are due to rise by an eye-popping 5.6 per cent.

The flawed way that this levy is collected – it is based on premises' rateable value – is part of the reason so many high streets have become virtual deserts, populated only by pound shops, pawnbrokers, bookies and boarded up fascias.

Anyone who can has fled out of town, where landlords are a might picky about the sort of companies they rent to but where rateable values tend to be much lower.

What this tells you is that the whole system is in a bit of a mess. However, sorting it out is likely to take some doing.

In the meantime, some rate relief is due because it isn't just retailers who will be clobbered by its rise. Dishing out a clobbering like this at a time when growth is anaemic – where there is any – would be deeply counter productive.

The Chancellor doesn't have much room for manoeuvre himself, as he has been keen to remind us. But with so much sound and fury about how "counter-productive" it is to levy a 50p top rate of tax on people who can readily afford to pay, it might be worth paying attention to this more damaging charge, the impact of which is felt far more widely.

With growth desperately needed, perhaps the call from the BRC to act on business rates is one of the few that George Osborne should heed as he finalises his budget.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?