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'Perfect storm' looms for the high street - Usdaw urges the Chancellor to intervene to save our shops

Date: 09 June 2021 Shopworkers’ trade union leader Paddy Lillis has today written to Rt Hon Rishi Sunak MP, Chancellor of the Exchequer, calling on him to intervene ahead of a ‘perfect storm’ that could further devastate already struggling high streets across the UK.
The retail trade union Usdaw has identified three key issues that will hit retailers at the end of June and could result in further store closures and job losses:
  • End of the moratorium on commercial evictions.
  • Reduced business rates relief.
  • Reductions in support from the Jobs Retention Scheme (furlough). 
Paddy Lillis – Usdaw General Secretary says: “It is clear that measures in the March Budget have not provided retailers with enough time or support to tackle the core issues facing the industry or plan their recovery out of the pandemic and secure jobs across the sector. While the re-opening of so-called ‘non-essential’ retail helped, many retailers continue to face an uncertain future.
 
“Usdaw is deeply concerned that, with the moratorium on commercial evictions and full business rates relief both ending on 30 June, additional cost pressures will push many non-food retailers to scale back, cut jobs or collapse completely. Those will coincide with reductions in furlough support. All of this could result in further significant job losses unless immediate action is taken by Government.
 
“Retailers need urgent support measures to deal with the immediate crisis and a longer term strategy to deal with some of the more fundamental structural issues facing the industry. Therefore, regardless of whether or not the Prime Minister lifts Covid restrictions on 21 June, Usdaw is calling for the Government to adopt an urgent recovery plan for the retail sector.”
 
Usdaw is calling on the Government to immediately: 
  • Extend the current business rates holiday at 100% until the end of the financial year (as has already happened in the devolved nations). From 1 July businesses that were forced to close on 5 January 2021 will only be able to claim 66% business rates relief. Relief is also capped at £2m which for many retailers equates to only a tiny fraction of their overall rates liability. 
  • Fundamental reform of business rates. Despite the recent interim report, following last year’s call for evidence, the Government is yet to take the clear and decisive action that retailers need to reform/reduce this outdated and imbalanced commercial property tax. The call for some form of online sales tax is getting stronger, particularly in light of the rapid growth in online shopping. A levy set at 1% of online sales would raise around £1.5bn. This could fund a cut in business rates of around 20%. 
  • Extend the moratorium on shop evictions for rent arrears beyond June, when any unpaid rent since the start of the pandemic becomes liable. The British Retail Consortium lays bare the extent of the problem, with an estimated £2.9 billion of unpaid rents. The moratorium should be extended beyond 30 June to avoid a cliff-edge scenario and we need legislation to support the fair resolution of disputes between commercial landlords and tenants. In the long-term there has to be a wider solution with a new model for commercial rents and leases that works for retailers, landlords and the wider sector. 
Notes for editors:
 
Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fifth biggest trade union with over 400,000 members. Membership has increased by more than one-third over the last couple of decades. Most Usdaw members work in the retail sector, but the union also has many members in transport, distribution, food manufacturing, chemicals and other trades.
 
For Usdaw press releases visit: http://www.usdaw.org.uk/news and you can follow us on Twitter @UsdawUnion

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