Business rate rise 'would threaten 19,000 retail jobs'

The 2 per cent business rate rise expected in the Budget could mean an extra 19,300 redundancies and nearly 600 retailers pushed out of business, according to the British Retail Consortium (BRC).

The Chancellor last month agreed to reduce the proposed 5 per cent increase. But the cut is not enough, says the BRC. The combination of the proposed rate increase with last year's loss of empty property relief and business rate supplements could add as much as £1.6bn to the £5.5bn annual tax bill of retailers.

Stephen Robertson, the director general, said: "The irony is that a third of what the Chancellor gains in extra business rates will be lost to him as a reduced retail sector delivers lower amounts of other taxes and the benefits bill rises."

In the run up to Wednesday's Budget, business groups from every sector are publishing wish lists, despite the widespread belief that the public finances leave little room to manoeuvre. Empty property rates relief is a common theme. The British Chambers of Commerce, the EEF manufacturing group, and accountants Deloitte all share the BRC view that the measure should be reintroduced. A minimum wage freeze, short-time working subsidy and government-guaranteed credit insurance are also popular.

The Chartered Institute of Personnel and Development says the Government needs to keep people in work. Delaying plans to increase employers' National Insurance (NI) contributions, as well as cutting current rates, would boost recovery. Some 37 per cent of 500 companies surveyed said an NI cut was the single measure most likely to improve resilience to the recession.

Manufacturers have a slightly different slant. The EEF says the Chancellor must encourage investment through a temporary rise in the Annual Investment Allowance, and an extension of the research and development tax credit for low-carbon innovation.