Rachel Reeves has received a caution against imposing changes to business rates that could burden retail workers, as highlighted in a joint plea from the shop workers union Usdaw and the British Retail Consortium. The call emphasized the importance of safeguarding both shops and their employees in the upcoming Budget announcement in November.
With nearly 3 million individuals employed in the retail sector in the UK, the industry has faced significant challenges, resulting in the loss of 350,000 jobs over the past decade and the closure of over 10,000 shops last year. The Labour Party has committed to revamping business rates to revitalize high streets, proposing a permanent reduction for retail, hospitality, and leisure properties starting next year.
To finance these adjustments, the Treasury is contemplating raising business rates for large non-domestic establishments such as office buildings and banks. However, concerns have been raised about the potential adverse effects on larger retail stores.
In a statement penned by Joanne Thomas, General Secretary of Usdaw, and Helen Dickinson, Chief Executive of the British Retail Consortium, it was warned that the proposed changes could impact supermarkets and anchor stores, which employ a significant portion of retail workers and drive foot traffic to high streets. The repercussions could include reduced working hours for employees, more closed shops, job losses, and ultimately, increased prices for consumers.
The plea to the government is to exclude shops from a higher business rates band and instead raise rates for large office buildings and other commercial properties. The emphasis is on the ripple effect of store closures, leading to reduced employee hours, limited training opportunities, slower pay progression, and decreased footfall in surrounding businesses.
The advocates urge for fairness in the Autumn Budget, prioritizing the protection of good jobs and elevating living standards without imposing financial burdens on retail workers. A Treasury spokesperson noted plans for a fairer business rates system, ensuring support for the high street, investment, and a leveled playing field through lower tax rates for retail, hospitality, and leisure properties, funded by a higher rate on a small percentage of valuable business properties.
The proposed changes aim to sustainably boost small businesses and avoid cliff edges in the system, providing long-term stability for business expansion and economic growth.