Treasury in talks with retail chiefs over future of high street, raising hopes Chancellor could step in to avert crisis
The Treasury has held talks with dozens of retail chiefs over the future of the high street, raising hopes Chancellor Rishi Sunak could step in to avert a deepening crisis.
Officials are understood to have spoken with senior retailers in recent days to assess the depth of the problem and whether Government action could have an impact.
The Covid-19 crisis has delivered a body blow to the retail sector that has already seen the Government hand out a 12-month business rates payment holiday worth £10billion.
Coming to the rescue?: Treasury talks with retail chiefs has raised hopes Chancellor Rishi Sunak could step in to avert a deepening crisis
However, a coalition of retailers has told the Treasury reinstating business rates in full next April will make 800 store unviable overnight, at a cost of 10,000 jobs. It follows a report last week that 125,000 retail jobs have been lost this year.
But the Treasury is understood to be concerned that blanket measures may be costly and only serve to prop up struggling firms. It has asked chains to provide two tranches of evidence on the issues facing shops – the first of which is due to be handed over on Friday.
The Mail on Sunday has learned that the Treasury may be considering adjusting the way business rates are calculated for retailers, by re-calibrating the so-called ‘multiplier’.
Because of years of above-inflation increases, the multiplier has increased to a level that means many retailers are paying business rates equivalent to half their rents. In some case it is far higher.
It is not yet clear if any adjustment would affect other industries or include supermarkets, where sales have blossomed during the crisis. There is also speculation over whether revised rates charges based on more up-to-date rental values could be rushed in.
The talks follow a lobbying effort from chains such as Boots, Debenhams, River Island and Topshop-owner Arcadia. Meanwhile, in a letter sent to the Chancellor this weekend, industry body UKHospitality is warning that bar, cafe and restaurant businesses have accrued £760million of unpaid rent since March – which will exceed £1billion after the September quarterly rent deadline.
It has asked Sunak to extend tenant protections on aggressive debt enforcement for a further six months to prevent a ‘bloodbath’ from October 1 when landlords will be able to take back the keys at thousands of sites.
The letter said: ‘Many landlords have already made it clear, in writing, that they will use the end of the moratorium to issue winding-up petitions to large high street chains and individual businesses.’
It said that if tenant protections were extended until next spring, firms that suffered ‘elimination of revenue’ in lockdown could enjoy Christmas trading, making them more able to repay debt.