Why rates reform is vital for Yorkshire's under-pressure retailers - Olga Watterich

In reality, business means the barbers who cut your hair and the nurseries who look after your children while you’re at work. It means the pub where you meet your friends, and the shop which sold you the phone, computer or newspaper via which you are reading these words. Business means livelihoods; it is the lifeblood which sustains communities throughout Yorkshire and the Humber and beyond.

It is the latter of those examples that I want to talk about today: retail. Our everyday familiarity with shops means it is easy to take them for granted – but where would we be without them? Retail workers were rightly recognised as key workers during the dark days of the pandemic, when their efforts kept families fed and communities functioning.

Today, the retail and wholesale industry continues to underpin economic activity in every town and city in the country.

New CBI Economics research shows the sector contributes a staggering £352bn a year to the UK economy. It’s hard to truly understand a figure so big, but for context, the £50bn which retailers and wholesalers pay each year in taxes would be enough to fund 110 new hospitals.

In Yorkshire alone, the industry is worth more than £23bn and

sustains in excess of 460,000 jobs, either directly or in its supply chains. That is more than a fifth of the region’s entire workforce.

Yet the fallout from Covid and war in Ukraine continues to weigh heavily on the sector. Consumer habits have changed, perhaps forever, and supply chain and price pressures show little sign of easing.

It is a tough time to be running a retail or wholesale business – and it’s about to get tougher.

In the spring, Business Rates are set to rise in line with inflation. That means businesses will be hit with an eye-watering 10 per cent hike to bills which – due to a slow and outdated revaluations system – already means retailers and wholesalers are overpaying. For some, rates liabilities are already as high as their rent.

At a time when retailers are proving a first line of defence against the cost-of-living crisis by keeping prices as low as possible to insulate households, this type of cliff edge could pose an existential threat.

That is why the CBI has urged Government to both rethink the planned rise and implement longer term reforms which reward investment.

The CBI is also keen to see greater flexibility added to the Apprenticeship Levy – a move which could have an enormous impact for a sector whose £4bn a year training spend amounts to a tenth of the UK’s total.

Together, these measures would renew optimism within the sector. And that, crucially, can help trigger the fresh investment which the UK sorely needs. Only this week, data showed our economy contracted over the past quarter, and predictions now are for a two-year recession.

It is therefore imperative to rebuild economic momentum. And where better to start than in a lynchpin sector which plays a vital role in every Yorkshire and the Humber town and city?

By Olga Watterich Associate Regional Director, Yorkshire and the Humber, CBI