UK retailers could have to pay £175 million business rates bill in 2013, the British Retail Consortium has predicted.
That is because, according to new figures, the Retail Price Index (RPI) measure of inflation rose by 2.6 per cent in September, posing what the BRC called a "significant threat to our high streets".
Already the RPI has risen significantly over the last two years – by 4.6 per cent in 2011 and by 5.6 per cent in 2012 – which the BRC equates to a cumulative increase of more than half a billion pounds.
British Retail Consortium director Stephen Robertson commented: "This RPI announcement reveals the scale of the potential damage to our high streets that will follow if the government follows previous practice and translates it directly into next April's rates increase.
"The retail industry is the UK's biggest private sector employer, providing crucial first jobs to a million 16-24 -year-olds.
"Expecting retailers to bear a huge rates hike for the third year running can only lead to fewer chances of work, less investment and more troubled high streets," he warned.
For that reason, the BRC has partnered with Retail Week magazine and a host of other industry executives for its Fair Rates for Retail campaign, which urges the government to freeze business rates in 2013.
It is hoped that doing so would support the high street by giving retailers a chance to recover, hire and expand.
At the moment, retailers pay more than a quarter of all business rates (28 per cent), which is why any rise in RPI would have a disproportionately hard effect on an industry which has already been badly effected by the recession.
In a letter to the Financial Times, a number of retail executives including Alex Gourlay, the chief executive of Alliance Boots and Andy Clarke, president and chief executive of Asda, stated that the sector has already given "more than its fair share to the exchequer".
The campaign group warned that another dramatic increase in RPI next year would ultimately mean fewer jobs in the industry and more stores left standing empty on the high street.
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