The outgoing chief executive of John Lewis, Peter Ruis, has cautioned that proposed increases in business rates could have a detrimental effect on the high street and the broader economy, potentially limiting employment prospects for young people. Ruis stated that customers are expressing anxiety about their children's difficulty in finding work.
He indicated that a hike in business rates, anticipated in the upcoming budget, would particularly affect large retailers, including John Lewis. Ruis noted the current economic climate as a 'perma-crisis' and highlighted a significant decrease in graduate job openings compared to previous years. "I think I read recently there are 10,500 graduate jobs compared to 60,000 or 70,000 five or six years ago," he said. This trend, he added, is causing concern among customers in their 40s and 50s who are worried about their children remaining at home without employment.
Approximately one million individuals aged 16 to 24 in the UK are currently classified as NEETs (not in education, employment, or training).
Retailers are reportedly concerned that Prime Minister Andy Burnham and Chancellor John Healey might be planning to increase business rates for larger shops to offset lower bills for establishments like pubs and music venues. Sports Direct founder Mike Ashley has also voiced opposition, calling the idea of placing further pressure on major retailers "delusional."
Several prominent retail chains fear that such a tax increase could escalate the cost of living, negatively impact employment, and deter investment. These businesses argue against paying higher rates, with specific concerns about potential increases for stores valued at £500,000 or more.
Ruis, whose tenure at John Lewis concludes this week, emphasized the broad impact such a measure would have. "It would have a terrible impact for all retailers," he stated, adding that smaller stores, while not directly targeted by this specific rate hike, would also suffer. He explained that major retailers like John Lewis often serve as anchors for high streets, drawing customers who then patronize other businesses. "John Lewis is the anchor to pretty much everywhere we are, and people drive into that town to visit us and then visit everyone else, so it’s really critical that that doesn’t happen," Ruis said.
Retail organizations contend that they are well-positioned to provide employment for young people but require a more favorable operating environment. Ruis suggested that reforming business rates could facilitate hiring more graduates and boost the economy, particularly when coupled with the recovery of the retail and hospitality sectors. "I think the economy moves fastest with retail and hospitality," he commented. "When you see the two of us going gangbusters, the economy starts to pick up."