Paphitis raps Government over business rates amid retail 'perfect storm' warning
Theo Paphitis has accused the Government of delivering a "sucker punch" to the retail sector by failing to adequately reform business rates, while also warning that the industry faces a "perfect storm" of cost pressures.
The entrepreneur behind retailers Boux Avenue, Ryman and Robert Dyas said the sector is having to stomach a tax which was "introduced in a different world" and that the Government has failed to provide an "honest and equitable reform of what is an archaic system of business rates".
The former Dragons' Den star said: "Retail, especially within bricks and mortar in the UK, is facing the perfect storm - c hanges in consumer habits, the impact of the weaker pound against the dollar and euro, coupled with increasing labour costs, the apprenticeship levy and the sucker punch in the lack of an honest and equitable reform of what is an archaic system of business rates.
"The facts are that footfall and activity on our high streets and town centres are in decline but businesses like ours are about to see an overall increase instead of a decrease in their rates bill in the next 12 months."
London's business rates bill alone will rocket by £9.4 billion over the next five years to more than £51 billion, according to specialists CVS.
The hikes follow a government revaluation in October, with the industry calling for a major reform of the system.
Chancellor Philip Hammond announced in the Autumn Statement that the Government will introduce a cap on increases in 2017, from 45% to 42%. From 2018 the cap will go from 50% to 32%.
But Mr Paphitis said: " With regard to the so-called recent business rates reform, retail has changed dramatically over the years but is faced with a tax that was introduced in a different world."
In better news for the businessman, all of his outlets celebrated a rise in like-for-like sales in the six weeks to December 24.
Boux Avenue saw an increase of 16.6%, Ryman 1.4% and sales at Robert Dyas grew 2%.