High Street to cut 225,000 jobs in just five years: Reeves urged for business rates reform to stem decline
Rachel Reeves is under increasing pressure to reform business rates as figures show 225,000 jobs have been lost on the High Street in the past five years.
The number of workers in retail has fallen from 3.1 million to less than 2.9 million since 2019, according to analysis of official data by the British Retail Consortium (BRC).
And a survey by the Institute of Directors (IoD) shows that hiring intentions for the wider economy are at their lowest level since the height of the pandemic in 2020, following Labour’s attack on national insurance (NI).
Retailers are suffering both from the NI raid – which they say will cost £7bn next year and which is at odds with the Labor manifesto – and from a business rates system they say is in desperate need of reform.
At the same time, they are hit by minimum wage increases. The BRC says that without changes to the business rates system, more jobs will be lost.
The issue has been highlighted by the Mail’s Save Our High Streets campaign.
Before the Budget, bosses had called on the Chancellor to extend Covid-era aid programmes. Instead, the rate reduction for catering and retail businesses was reduced to 40%
Retailers including Currys and Primark have already warned that rising staff costs means they will increasingly focus on automation.
BRC chief executive Helen Dickinson said: ‘The government’s promised reforms to business rates give it leverage to protect future investment and it is vital that they ensure no store pays more as a result of these reforms.
‘Without this, more stores will be forced to close, meaning fewer retail jobs will be created in communities across the country.’
The business rates system is a levy based on the rental value of a commercial property. This means that stores pay a premium compared to online giants like Amazon.
Before the Budget, bosses had called on the Chancellor to extend Covid-era support schemes, cutting their business rates by 75 per cent.
They also wanted to see the introduction of permanent reforms to the system that would create a level playing field.
Instead, the rate reduction for catering and retail businesses was reduced to 40 percent.
Reeves also announced plans aimed at reducing business rates for most High Street shops at the expense of larger commercial properties, which will have to pay more.
The idea is to capture large warehouses used by the likes of Amazon, but it could backfire as the proposals will also affect larger physical stores.
Retail companies aren’t the only employers under pressure to reduce labor costs.
Figures from the Office for National Statistics (ONS) yesterday showed that the number of workers across Britain fell by 35,000 in November.
And the number of vacancies fell by 31,000 to 818,000 in the three months to November, meaning there have been 29 consecutive periods of decline.
Alexandra Hall-Chen, chief employment policy adviser at the IoD, said the data “points to a worrying outlook for job creation in Britain”.
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