Business Rates Valuation Delay

RNS Number : 7997T

Frasers Group PLC

22 July 2020

 

Date: 22 July 2020

Frasers Group Plc

("Frasers Group" or the "Company")

Business Rates Valuation Delay

Fraser's Group has long petitioned the Government to change the business rates environment.  At a time where much of the UK high street is fighting for its survival, Frasers Group looks on with anguish and bewilderment at yesterday's announcement by the Government to delay the next business rates valuation until 2023.

With the High Street already in meltdown, Covid-19, the lockdown, and its after-effects are now pulverising what remains. Yet the Government stands aside and has buried its head in the sand on the critical business rates issue, raising unfair and uneconomic revenue sums from already distressed businesses.  Not only has it has kicked the can down the road; it has also kicked businesses when they are clearly down.  We expect that the Government's inaction will drive further stores and businesses on our high streets into closure, in the process costing many people their jobs and livelihoods.

Occupiers of the High Street, including Frasers Group fascias, are still paying business rates based upon values from 2015, and the Government has now decided that occupiers should continue to do so for an extra 2 years. These outdated 2015 values bear no correspondence to present day values or trading conditions and the Government is perfectly well aware of this. Yet the Government will now have businesses wait a total of 8 years before taking the necessary steps to align business rates with reality; even then, with the anticipated transitional arrangements we may never get there. As we noted in both our half year results announced on 16 December 2019 and in subsequent correspondence to the Prime Minister, there are House of Fraser stores paying no rent but still losing money and that a business rates correction could dramatically change the situation in terms of saving stores. However with yesterday's announcement, Frasers Group will again have to carefully review the viability of a number of stores within its portfolio.

How many more businesses on the High Street have to disappear and jobs be lost before the Government takes this issue seriously?  How does the Government reconcile its maintenance of a punitive and outdated business rates regime, with its predictable and devastating effect on the viability of bricks and mortar businesses, with its recent policy/stimulus decisions seeking to have customers return to our high streets?

Ends.

Frasers Group Plc   T. 0344 245 9200

Tom Piper, Company Secretary   E. [e-mail]

 

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