The Charity Retail Association has warned that proposals to cap the number of charity shops and reduce the rate relief they receive could cause up to a third of charity shops in Wales to close.
Edwina Hart, the Welsh business minister, announced yesterday that there would be a consultation on the proposals, contained in the Business Rates Wales Review, which was led by Brian Morgan, professor of entrepreneurship at Cardiff Metropolitan University and published in the summer.
Morgan’s review said consideration should be given to limiting rate relief to 50 per cent for larger charity shops trading in new goods and restricting the number of retail units eligible for charitable relief in any town. It also suggests restricting the number of premises they can occupy.
In her response to the review, Hart said Morgan would lead a consultation with charities and businesses to examine the evidence relating to his proposals on cutting rate relief for charity shops.
Warren Alexander, chief executive of the CRA, said that if the review’s proposals went ahead they would "hammer Welsh charities" and could lead to 160 more empty shops and 200 job losses in Wales.
He said charity shops raised £12m every year for Welsh charities and provided 700 jobs.
"We’re really disappointed that the Welsh government hasn’t rejected these proposals out of hand," said Alexander. "Our members suggest that up to a third of charity shops could close, which would wipe £4m off the money going to charity in Wales and create 160 extra empty shops. That could mean more than 200 jobs being lost. Those shops that did manage to stay open would be much less profitable.
"In essence, these proposals would hammer Welsh charities and are based on prejudice against charity shops, not on evidence as to what’s best for the high street.
"Charity shops are not responsible for the problems on the high street – and shutting them down will only create more empty shops and fewer jobs and volunteering placements for Welsh people."
The CRA has called for a meeting with the minister to discuss the impact of the proposals.
Gareth Morgan, general manager for Red Cross Retail in Wales, said the British Red Cross could lose up to £100,000 of profit if the proposals went ahead.
"The sharp increases in costs would mean that some of our shops would face closure, because maintaining them will not be a viable option – something that would only add to the further demise of our high streets," he said.
Andrew Hufford, director of income generation at the Welsh cancer charity Tenovus, said reducing rate relief to 50 per cent would have a direct impact on the cancer services it provides to Welsh people.