Retail giants warn Andy Burnham against business rates hike ahead of Autumn Statement

Retailers urge Andy Burnham to rule out business rates hike

Tesco, Sainsbury's, and Marks & Spencer are among major retailers that have written to Andy Burnham urging him not to increase business rates for larger stores ahead of the Autumn Statement, scheduled for October 28. The Retail Jobs Alliance (RJA), which represents retailers employing more than one million people, has warned the Labour Prime Minister against hiking the business rates multiplier for stores with a rateable value above £500,000.

The letter, reported by City M. and Birmingham Live, comes as Burnham has committed to easing the business rates burden on pubs, bars, and live music venues as part of his promise to rejuvenate high streets. Retailers fear this could be funded by increasing costs for larger shops.

'Single ecosystem' warning

The RJA, whose members also include Morrisons, Asda, Primark, and B&Q owner Kingfisher, argues that cutting rates for hospitality while increasing them for retail would harm the entire high street. The alliance wrote to Burnham: "The high street is a single ecosystem. Pubs, restaurants, retailers and other local businesses all rely on vibrant town centres with strong footfall and consumer spending."

They added that footfall for hospitality businesses would "inevitably be reduced" if retailers are driven out by higher taxes. The letter also welcomes the government's commitment to "growth in every postcode" and its recent announcement to reduce business rates for pubs, clubs, and live music venues, while calling for further changes to support investment by bricks-and-mortar retailers.

Tax burden and price pressures

The RJA contends that retail is the most heavily taxed sector relative to its economic output, paying 21% of all business rates despite representing only 5% of GDP. They point to last year's autumn budget, which they say added £7bn in new costs and taxes to the sector, describing it as a "direct cost driver on prices".

According to the alliance, approximately 4,000 stores above the £500,000 threshold employ one in three retail workers. The group also noted that "the previous government's introduction and increases to the higher multiplier have already placed unsustainable pressure on the sector."

Union backing and competing proposals

The letter is backed by Usdaw, the UK's fifth-largest trade union, which represents shopworkers. Meanwhile, the Real Rates Reform Alliance has separately called on the government to increase business rates for the highest-value properties in order to fund a 37% tax cut for pubs, according to City M.

The contrasting positions highlight the tension between supporting hospitality venues and protecting large retailers, with both sides claiming their approach would best serve the high street.