Sky-high rates blamed for our deserted shopping malls

Empty shops in The Galleries
Empty shops in The Galleries

AN AWARD-winning local entrepreneur has demanded a complete overhaul of business rates, saying they are forcing businesses online and off the high street.

Mandy Summerscales, who owns boutique Fashion PA, spoke out after turning down a unit in Wigan’s Galleries shopping centre and being forced to close her shop in Leigh due to the high trading costs in January.

She is now planning to run her company online after being quoted an annual business rate of around £17,500 in Wigan town centre and asked to pay £600 per month in Leigh.

The 41-year-old said: “It’s a massive cost which new businesses often underestimate. People are finding they could employ a member of staff for the same amount of money as the rates.

“It’s an old-fashioned tax which is out of date. Retail parks are dominating and online retailers are not having to pay the same business rates, so it’s no wonder the high street is struggling.

“In Leigh I was looking at £800 a month in rates and also council tax for me to live above the shop, and for one person in a business that’s an awful lot of money.

“Rents have also plummeted because landlords are basically giving away shops for free so they don’t have to pay the business rates on unoccupied properties. The recession means everyone’s down to the bare bones and it’s quite sad.”

Ms Summerscales has criticised a decision to postpone last year’s planned five-year review of business rates for another two years, saying it means firms are having to pay peak rates set in 2008 when the British economy was in a much healthier state.

She also says businesses are going to have to come up with much more creative ways of keeping costs down if the business rates, which are collected by the Valuation Office Agency and distributed to councils to spend on local services, are not altered.

She said: “I think sharing buildings could well be the future for independent retailers. We’ve all got to help each other out. It’s also becoming harder for people to get a unique selling point because there’s no brand loyalty anymore.

“Anyone will sell anything to anybody, which means businesses have got to keep re-inventing themselves.”

Chancellor George Osborne attempted to relieve the burden on start-up businesses by announcing new occupants would only be charged half the usual business rates when they moved into vacant stores in last year’s Autumn Statement, but Mandy warned this would not help established traders who are often tied into long-term leases.