Retail, the largest private-sector employer in the UK, boasts a workforce of nearly three million individuals engaged in various roles across shops, warehouses, transport, and administrative offices. Among them, 365,000 are Usdaw members, representing a diverse range of workers from those seeking flexible schedules to long-serving employees who have advanced to managerial positions without formal qualifications.
In addition to these workers, the supply chain of retail involves farmers, drivers, warehouse staff, and service providers, making retail a vital component of the daily economy. However, the sector has faced significant challenges in recent years.
Over the past decade, retail has witnessed a decline of 350,000 jobs, with 100,000 lost in the last year alone. The closure of over 10,000 shops in the previous year has further exacerbated the situation, impacting families relying on these jobs and affecting the vitality of our high streets.
Recognizing the struggles faced by the retail sector, the Government has proposed a permanent business rates reduction to support retail, hospitality, and leisure businesses. This initiative is seen as a positive step towards addressing longstanding issues.
Despite retail contributing only 5% to the economy, it bears over 20% of all business rates, creating an unfair burden on retail establishments that serve as community hubs. It is imperative that changes to business rates rectify this disparity to support the sustainability of retail operations.
To finance these changes, the Treasury is contemplating raising business rates for large non-domestic premises, potentially affecting supermarkets and anchor stores that are crucial employers in the retail sector. Such a move could result in reduced working hours, closures of stores, and job losses, ultimately impacting prices for consumers.
It is crucial to understand that increased costs, including taxes, can have a cascading effect on retail operations, leading to challenges in maintaining affordable prices for consumers. Therefore, there is a need for a balanced approach that supports businesses while safeguarding the interests of workers and consumers.
By excluding shops from higher business rates bands and slightly increasing rates for large commercial buildings, the government can ensure revenue neutrality while minimizing adverse effects on jobs and prices. This strategy can promote a favorable environment for retail businesses to thrive and contribute to local economies.
Looking ahead, a collaborative effort involving organizations like Usdaw and the British Retail Consortium is essential to secure a prosperous future for retail workers and businesses. The forthcoming Autumn Budget presents an opportunity to make impactful decisions that safeguard the retail sector and its workforce.
Proposals for a substantial and lasting reduction in business rates for smaller retail, hospitality, and leisure premises, coupled with a fair distribution of tax burdens, can pave the way for a resilient and thriving retail landscape across the UK.