John Lewis boss calls for shake-up of business rates after 'two-handed grab by the Chancellor
The departing boss of John Lewis has called for a ‘radical’ shake-up of Britain’s business rates system following a ‘two-handed grab’ from private enterprise by the Chancellor.
Nish Kankiwala said the group, which includes the department store chain and the Waitrose supermarket chain, faces ‘tens of millions’ in additional costs as a result of the Budget.
He highlighted the £25billion National Insurance tax raid on employers and the prospect of higher business rates bills.
‘That seems to be, you know, sort of [a] two-handed grab, and that’s unhelpful,’ Kankiwala told the Financial Times.
Fears: Departing John Lewis boss Nish Kankiwala (pictured) said the group faces ‘tens of millions’ in additional costs as a result of the Budget
Rachel Reeves has faced a furious backlash since the Budget, with more than 80 leading retailers signing a letter this week warning the rise in National Insurance will lead to store closures, job losses and higher prices.
The tax raid, which critics argue breached Labour’s manifesto pledge not to raise National Insurance, came alongside an inflation-busting rise in the minimum wage and new rights for workers that will cost business £5billion a year.
Attention is now turning to the Government’s failure to deliver on its promise to ‘replace the business rates system’ to ‘level the playing field between the High Street and online giants’.
That has left firms facing a sharp rise in business rates in April, on top of the other extra costs, with retailers braced for a £140million increase.
Writing in the Mail yesterday, the boss of the British Independent Retailers Association said his 4,500 members, who include garden centres, DIY shops, furniture sellers and department stores, ‘are reeling from the coming increase in business rates’.
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Andrew Goodacre added: ‘We call on the Chancellor to reverse the increase – High Street shops can take no more.’
Speaking as his two-year tenure in charge of John Lewis nears an end, Kankiwala said: ‘If they could delay the national insurance, but also if they could fundamentally bring forward a radical reshaping of business rates, I think that will make a massive difference.
‘Not just for small and medium enterprises, but I think for retail generally. It’s very important.’
Business rates are a local levy based on the value of a commercial property, meaning shops pay a premium compared to the online giants such as Amazon.
Household names from Marks & Spencer to Currys have railed against the system, calling it unfit for purpose and at odds with the modern age.
But in the Budget, Reeves simply launched a ‘conversation about how the Government can best deliver’ a fairer system. This included lower bills – but not until 2026.
In their letter to the Chancellor this week – the signatories also included Boots, Greggs and B&Q – retail bosses called for a ‘permanent reduction’ in business rates bills to help ‘offset’ the £7biliion of extra costs they face from the national insurance tax raid, higher minimum wage and levies on packaging.
A Treasury spokesman said last night: ‘We had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability.’
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