Retail workers are at risk of bearing the burden of business rate reforms, according to a caution issued to Rachel Reeves. The Usdaw union and the British Retail Consortium have jointly urged the Chancellor to safeguard shops and their employees in the upcoming November Budget.
Approximately 3 million individuals are employed in the retail sector in the UK, but it has witnessed a significant decline with 350,000 job losses in the past decade and the closure of over 10,000 shops last year. The Labour Party has pledged to revamp business rates to revitalize high streets by implementing a permanent cut for retail, hospitality, and leisure properties starting next year.
To finance these changes, the Treasury is contemplating raising business rates for large non-domestic establishments like office buildings and banks. However, concerns have been raised regarding the potential impact on larger retail stores. In a statement, the General Secretary of Usdaw and the Chief Executive of the British Retail Consortium emphasized the adverse effects this could have on supermarkets and anchor stores, potentially leading to reduced employee hours, more closed shops, job losses, and increased prices.
The government is being urged to exclude shops from a higher business rates band and instead increase rates for large office blocks and other commercial buildings. The importance of preserving good jobs, raising living standards, and promoting fairness in the Autumn Budget was highlighted, emphasizing the need not to burden retail workers with financial adjustments.
In response, a Treasury spokesperson highlighted the efforts to establish a fairer business rates system by introducing permanently lower tax rates for retail, hospitality, and leisure properties from April. This initiative is expected to be funded by a new, higher rate applied to less than 1% of the most valuable business properties, aiming to support the high street, encourage investment, and create a level playing field. Plans to address system flaws and support small businesses are also outlined for future implementation.