Ikea joins calls for shake-up of business rates in Britain

Ikea has joined the chorus of retailers demanding business rates reform to prevent job losses and shops shutting. 

Peter Jelkeby, UK chief executive of the furniture chain, warned that Labour’s proposals ‘do not go far enough’, especially after the sector was hit with higher employment costs in the Budget. 

His move comes after more than 80 big names, including Currys and Asda, wrote to Chancellor Rachel Reeves urging her to reconsider her plans for the punitive property levy. 

A report this week by the Centre for Retail Research suggests that Labour’s business policies could be deadlier than the pandemic for the High Street. 

It predicts as many as 202,000 jobs could be lost due to higher business rates and employment costs, compared with 200,164 in 2020. 

The issue has been highlighted by the Mail’s Save Our High Streets campaign. 

Ikea, which employs more than 10,000 staff in the UK, urged the Chancellor to take firm action on business rates. 

Jelkeby said: ‘It is a welcome step that this Government is considering changes to the business rates regime. 

But the proposals do not go far enough in addressing their disproportionate impact on retail, particularly in light of the cumulative burden on retailers after the Budget. 

It is important the reforms recognise this and create a more level playing field.’

Retailers will this year be hit by the £25bn rise in employer National Insurance contributions and an inflation-busting rise in the minimum wage. 

Greene King boss Nick Mackenzie said the Budget ‘hurt pubs at a time when the cost of doing business was already at an all-time high’. 

He added: ‘Increasing taxes and wages without a clear plan to reduce regulation and costs will inevitably affect investment and could mark a moment of lasting damage to the pub sector.’ 

Julian Metcalfe, founder of Itsu and Pret, said ’empty high streets is a real worry’ as in many cases business rates are as high or higher than rents. ‘It’s heartbreaking,’ he said. 

‘Some costs are so high people wouldn’t dare start a business now. That’s bad for Britain.’ Business rates are based on the rental value of a commercial property, meaning shops pay a premium compared with online giants such as Amazon.