Thursday, 30 July 2026
“Large warehouses and logistics facilities already face some of the highest business rates liabilities of any property type. They are also critical infrastructure supporting the UK economy, underpinning advanced manufacturing, e-commerce, defence and national supply chains. Their strategic importance was highlighted when the Defence Secretary unveiled the Ministry of Defence’s new logistics facility at Panattoni Park Swindon.
“Further increasing the business rates burden would have consequences well beyond the logistics sector. These facilities form an essential part of the supply chain for almost every category of goods, from groceries and pharmaceuticals to consumer electronics, serving industries that often operate on extremely tight margins. Higher operating costs are therefore likely to be passed through the supply chain, ultimately affecting occupiers, retailers and consumers.
“Business rates and other tax increases are already influencing investment decisions and occupier strategies, making new development increasingly difficult to justify. At a time when the UK needs more modern logistics space, stronger and more resilient supply chains, and continued investment in employment-generating development, additional costs risk discouraging the very investment needed to support long-term economic growth.
“The Government has also made attracting private capital and foreign direct investment a central economic objective. Policies that weaken the investment case for modern logistics development send a contradictory message to international investors. Logistics real estate is fundamental to economic competitiveness, supply chain resilience and national security. Reducing its attractiveness as an investment destination risks slowing the delivery of critical infrastructure and limiting the flow of international capital into the UK.
“There is a legitimate case for supporting pubs, restaurants and high street businesses, but the current approach lacks consistency. Pubs have received significant business rates support over the coming years, while restaurants facing many of the same cost pressures have not benefited to the same extent. Increasing the tax burden on the warehouses that supply the hospitality sector does little to address the structural challenges facing those businesses.
“Many of the changes introduced in April, together with those now under consideration, are broad in scope and insufficiently targeted. Before implementing further reforms, the Government should undertake detailed impact assessments to ensure policy supports businesses facing genuine hardship without increasing costs for consumers, discouraging investment or weakening the logistics infrastructure on which the wider economy depends.”
