Logistics leaders warn business rates reform could drive up high street prices
A coalition of logistics professionals and long-term industrial investors has warned that changes to the business rates system risks damaging the British high street by pushing up costs.
The group, which includes major investors Segro, Prologis and Tritax Big Box, said that the proposal to apply a higher business rates multiplier to more valuable properties would disproportionately affect high-street retailers, manufacturers and SMEs.
As it stands, the bill will introduce a higher multiplier for business with a rateable value – market price – over £500,000, using the proceeds to set a lower tax for smaller businesses.
The bill aims to level the playing field between high street and e-commerce businesses by increasing the amount large e-commerce warehouses pay in bills.
But the investor group said that the “blanket approach” by the Government “risks driving up costs across supply chains, fuelling inflation and deterring investment into precisely the sectors the Government wants to grow.”
According to the investors, only 11 per cent of space in their portfolios is occupied by e-commerce businesses, while 66 per cent is used by transport, logistics, manufacturing and retail occupiers.
‘Poorly thought out’
“Without a more balanced approach, these reforms could ultimately weaken the very industries they seek to support, placing pressure on SMEs, delaying sustainability upgrades, and harming the high street,” the group said.
“The Government is rushing through Parliament new business rates legislation that has not been properly thought out and will potentially add millions of pounds onto the rates bills of UK PLC – doing little to help grow the economy,” John Webber, head of business rates at Colliers said.
The response from Segro and Tritax comes after City AM analysis of insolvency notices found more than 1,100 companies faced winding-up orders in the first fifteen weeks of 2025, an increase of nearly a quarter compared to last year and the fastest rate of corporate closure since 2010.
Over one in ten of the more than 300 companies facing winding-up petitions so far in April alone were retail and hospitality businesses.