Rachel Reeves has been warned that 60,000 small shops and 150,000 jobs are at risk without business rates reform in her upcoming Budget. New research by Opinion Matters found that one in eight small high street business owners said they will be at risk of closure if changes are not delivered and 10% said they would be forced to lay off staff.
The Labour Government has pledged to introduce permanently lower rates for smaller businesses. A temporary 40% relief, down from a previous 75% discount, for eligible retail, hospitality and leisure businesses in England is due to expire next April.
Association of Convenience Stores chief executive James Lowman said: “In the last year alone, business rates bills for convenience stores have increased by over £100million.
“These essential local shops are now facing significant further increases with the expected reduction of the 40% retail and hospitality relief, coupled with next April’s revaluation, unless the Government commits to the full use of new powers to introduce a permanently lower multiplier for local shops.
“We’ve been calling on retailers throughout the summer to write to their MPs on the impact that business rates increases are having on their investment plans and have engaged directly with the Treasury to outline the difficult decisions that retailers are already having to make as a result of higher bills.
“It’s essential that the Budget includes a meaningful long-term reduction in rates bills for convenience stores to incentivise investment and provide much needed certainty for the future.”
A separate YouGov poll found that three in four people said they “feel their community would lose part of its identity” without local shops.
Shirine Khoury-Haq, Co-op group CEO, added: “As we approach a critical Autumn Budget, there’s a real danger that the voices of small shops – and the communities they serve – are not being heard.
“Local shops aren’t just businesses; they’re part of the social fabric of Britain. For some, a visit to a local store is one of the few chances they have to chat to someone and feel connected.
“This research shows a clear public mandate for action. Regardless of how they vote, the majority of people want the Government to do more to protect their high streets.
“This is an opportunity for the government to really prove to people that they will do what it takes to make a difference to people’s communities and to their wellbeing.
“The proposed system would improve the financial situation of 99% of retailers. How much they are protected from tax rises depends on decisions made in this Budget.
“To boost local economies, create jobs and provide community cohesion, we need inclusive growth.
“That means supporting the businesses on the corners, in the precincts, on the parades and the high streets of every community. In order for them to not only survive, but to thrive, the Government has to commit to the maximum levels of relief.”
The Tories pledged during their party conference earlier this month to abolish business rates for high street shops and pubs if they win the next general election.
A Treasury spokesperson said: “We are creating a fairer business rates system to protect the high street, support investment, and level the playing field by introducing permanently lower tax rates for retail, hospitality, and leisure properties from April that will be sustainably funded by a new, higher rate on less than 1% of the most valuable business properties.
“Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, and we have set out our long-term plans to address ‘cliff edges’ in the system to support small businesses to expand.”