As the dust settles on a turbulent period for Britain’s high streets and commercial centres,the debate over business rates has moved from technical policy issue to existential battleground. Few feel the impact more acutely than central London‘s businesses, where soaring rateable values collide with uneven footfall, shifting consumer habits and mounting operational costs. Standing at the forefront of this fight is Ros Morgan, chief executive of the Heart of London Business Alliance, who has emerged as one of the most vocal advocates for a system that better reflects economic reality on the ground.In a wide-ranging conversation with Property Week, Morgan sets out why she believes the current regime is stifling investment, punishing bricks-and-mortar operators, and undermining the capital’s global competitiveness – and what meaningful, “fairer” rates reform would really look like for the West End and beyond.
Morgan outlines why business rates are failing central London and what must change
For Morgan, the core problem is that the current rating system is structurally out of step with how central London actually trades and evolves. A valuation mechanism rooted in historic rental levels and glacial revaluations punishes physical presence and rewards digital scale, leaving high-footfall districts such as the West End paying disproportionately more than out-of-town warehouses or online operators. The result is a tax regime that treats a flagship store on Regent Street the same way it treated it a decade ago, despite seismic shifts in consumer behavior, hybrid working and international tourism. As Morgan notes, this is not just a spreadsheet issue; it is indeed a competitive threat that drains investment from the very streets that anchor London’s global identity.
- More frequent revaluations to reflect real-time market conditions rather than outdated rental peaks.
- Lower, more agile multipliers so that tax liabilities move with trading reality, not against it.
- Targeted reliefs for cultural, hospitality and creative uses that drive footfall and night-time vibrancy.
- Parity between online and physical retail so that ratepayers on central London streets are not subsidising digital-only rivals.
| Issue | Impact on Central London | Morgan’s Fix |
|---|---|---|
| Outdated valuations | Overtaxed prime locations | 3-year revaluation cycle |
| High multiplier | Deters new investment | Capped, tapered increases |
| Online advantage | Unfair burden on high streets | Digital activity levy |
| Complex reliefs | Confusion, under-claiming | Simple, automatic discounts |
The impact of unfair rates on West End retailers hospitality and cultural institutions
For shops, bars, theatres and galleries clustered around Leicester Square and Piccadilly, the current business rates regime functions less like a tax and more like a structural penalty for daring to trade in the UK’s most high-profile district. Legacy valuations anchored to pre-pandemic footfall mean some occupiers are paying rates bills higher than their rent, a burden that forces independent retailers to trim opening hours, freeze hiring and abandon long-planned refurbishments. Hospitality operators report a squeeze on margins that leaves little room for menu innovation or staff training, while cultural institutions quietly shelve experimental programming in favour of safer, commercial bets. The result is a subtle but measurable erosion of the West End’s vibrancy, where the cost of staying open crowds out the capacity to stay distinctive.
This distortion is felt most sharply by smaller businesses and charities,whose tax liabilities rise in lockstep with headline values,but whose revenues remain acutely sensitive to weather,strikes and shifting visitor habits. A growing number of members describe rates as their single biggest operational risk, forcing a reshuffle of priorities that can include:
- Delaying capital investment in store refurbishments, kitchen upgrades and backstage infrastructure
- Scaling back outreach programmes, community events and off-peak performances
- Reducing staffing levels at peak times, undermining service quality and visitor experience
- Consolidating units or exiting secondary streets altogether, hollowing out once-busy corridors
| Operator Type | Main Rates Impact | Typical Response |
|---|---|---|
| Independent retailer | Overheads outpace sales growth | Shorter hours, fewer staff |
| Restaurant & bar | Margins squeezed on every cover | Price rises, menu simplification |
| Theater & gallery | Programming risk becomes unaffordable | Conservative line-ups, fewer new works |
How a reformed rates system could unlock investment jobs and long term urban resilience
Resetting the tax burden so it nudges investment instead of penalising it would give developers, landlords and occupiers the confidence to back ambitious, future‑proofed schemes. A predictable, more proportionate rates regime, tied to regular revaluations and genuine reliefs for refurbishment, could turn stalled projects into live construction sites and unlock a new wave of mixed‑use, sustainable buildings. That means more cranes on the skyline, but also more apprentices on site, more designers in studios and more hospitality and retail roles supported by the footfall that follows. In central London’s cultural and commercial districts, where margins are tight and competition is global, the shift from a “tax on presence” to a “platform for growth” is not abstract policy theory; it is the difference between incremental decline and renewed confidence to invest.
Urban resilience depends on more than flood defences and green roofs; it is grounded in a tax system that keeps the high street vibrant, upper floors occupied and heritage assets in productive use. A smarter approach to business rates could support this by encouraging long‑term stewardship and rewarding those who retrofit, diversify their tenant mix and animate street level space. Under the model advocated by Heart of London Business Alliance, the winners would be places that are busier, safer and more inclusive, where investment flows into public realm, culture and climate adaptation rather than into firefighting short‑term vacancies and arrears.
- Incentivised reinvestment: Reliefs linked to retrofit, decarbonisation and accessibility upgrades.
- Stronger local economies: Stable tax bases funding cleaner streets, culture and transport.
- Quality jobs: Growth in creative, retail, hospitality and construction roles.
- Resilient neighbourhoods: Active ground floors, reduced vacancy and safer night‑time economies.
| Policy lever | Investment impact | Resilience gain |
|---|---|---|
| Frequent revaluations | Reduces risk for long‑term projects | Aligns tax with real‑world conditions |
| Targeted reliefs | Unlocks stalled refurbishments | Modern, energy‑efficient stock |
| Support for culture & SMEs | Attracts visitors and spending | Diverse, adaptable local economies |
Policy roadmap from valuation reform to targeted reliefs to deliver a fairer rates regime
For Morgan, the path to meaningful change begins with a clear, time-bound shift in how commercial properties are valued, moving away from opaque, backward-looking assessments to a clear system that better reflects current trading realities. That means more frequent revaluations, a simpler appeals process and a realistic look at how digital and physical retail now coexist on the high street. Within this framework, business groups are urging government to hardwire fairness into the DNA of the system through phased reforms that prioritise areas where the pain is most acute. In central London,where long leases and legacy valuations collide with pandemic scars and structural shifts in footfall,the stakes are especially high.
The emerging blueprint is not just about lowering bills, but about reshaping incentives through smart, targeted reliefs that reward investment, innovation and community value. Priorities flagged by the Heart of London Business Alliance include:
- Permanent improvement relief for property upgrades that support sustainability and accessibility.
- High-street resilience discounts for small and independent occupiers in cultural and hospitality clusters.
- Transitional protections that smooth sharp increases following revaluation, especially for heritage and creative venues.
| Relief Type | Main Beneficiaries | Policy Goal |
|---|---|---|
| Improvement relief | Landlords & major occupiers | Unlock greener, modernised stock |
| High-street discount | SMEs & independents | Protect diversity on key streets |
| Transitional cap | Ratepayers facing sharp hikes | Avoid shock to cashflow |
Future Outlook
As Westminster again becomes the stage for a long-awaited overhaul of business rates, Morgan’s message from the Heart of London district carries wider resonance.The pressures facing central London’s cultural and commercial core – from shifting consumer habits to rising occupational costs – are being felt in high streets and city centres across the UK.
Whether ministers opt for targeted reliefs, a full recalibration of the tax base or more radical structural reform, the direction of travel will determine not only the fate of flagship destinations but also the confidence of investors weighing up where – and whether – to commit long term.
For now, the business rates debate remains a test of how seriously policymakers take the future of bricks-and-mortar commerce. As Morgan and the Heart of London Business Alliance continue to press their case, the question is no longer if the system must change, but how quickly – and how far – government is willing to go to deliver a settlement that businesses consider genuinely fair.
