Raymond Sutcliffe is furious. “I didn’t know Rachel Reeves had been here as a customer,” says the 61-year-old greengrocer, owner of one of the oldest shops in the Chancellor’s constituency in Leeds. “If I had, I would have excluded her.”
His anger is aimed at her controversial budget decision to cut business rates relief – meaning the bill for businesses like his will more than double next year.
It comes on top of large increases in employers’ national insurance contributions and the national minimum wage.
“They’re going to put us out of business the way they’re going,” added a rueful Labor Sutcliffe. “I don’t mind paying someone a decent wage, but how can a small business survive all these changes at once?”
Sutcliffe, who employs family members including his son Richard, 26, at his century-old shop, continued: ‘I’m glad I’m not starting. Do they want empty shopping streets? That’s where they’re going.”
He is speaking from his shop, Sutcliffe’s of Farsley, founded in 1900.
With just one vacant shop and a wide range of businesses housed in attractive stone buildings, Farsley – in the heart of Rachel Reeves’ Leeds West and Pudsey constituency – appears to be thriving.
But behind the brightly colored shop fronts, recently covered in Christmas decorations, traders in the West Yorkshire town fear its triple tax rises could tip some of them over the edge.
Raymond Sutcliffe and his son Richard are facing higher business rates, national insurance costs and employee benefits
Sutcliffe’s distress is being echoed by some of its neighboring retailers and across the country, as businesses in the retail, leisure and hospitality sectors face a £140 million increase in their bills next year.
This is the result of an initiative by Reeves to reduce business rates relief from 75 percent to 40 percent. It means some smaller operators will have to pay significantly more.
Under a ‘temporary’ policy introduced during the pandemic, business rates relief was planned to end in April next year.
Instead, the Chancellor, pictured right, extended the scheme for another year, albeit at a lower rate, while promising to introduce a ‘fairer’ system in 2026-2027.
But businesses ranging from national chains to the small Farsley shops we visited are calling for an urgent review of the hated levy.
Trade body British Retail Consortium has warned that more than 17,000 stores could close over the next decade unless the system is reformed.
Not only shops are affected. The British Beer and Pub Association estimates that the average drinker will see their annual business rates rise from £12,000 to around £18,000 next year.
A new survey in The Mail on Sunday from the Independent Retailers’ Association – whose 4,500 members include garden centres, DIY stores and furniture stores – found that relief from business rates would be harder to swallow than the premium for the national insurance or an increase in the minimum wage. .
Uphill from Sutcliffe’s greengrocer on Farsley’s main shopping street is Whittaker’s Schoolwear, which sells uniforms for local pupils.
Hardware store owner Mark Cox says the Chancellor sees small retailers as a soft target
Brad Hutchinson, 41, co-owner, says Reeves’ budget measures have turned the small chain he founded with his family from a growing business to one forced to plan cuts.
“The staff and national insurance costs will be an extra £170,000 for us as a business next year – which is huge,” he explains.
‘That is without the higher costs resulting from the disappearance of the business rate reduction. We haven’t even looked at that yet. It’s probably going to cost us tens of thousands of pounds.’
The maximum number of businesses that can receive support each year is £110,000. Hutchinson started the company 16 years ago with his brother and father. It has since grown to ten outlets across the north of England.
He employs 70 full-time staff, but in the summer this increases to 270, mainly school and university leavers and university students.
“For a 16- to 17-year-old working 27 hours a week, this means a 30 percent increase in costs for us, which is huge,” Hutchinson said of the tax increases.
He won’t be hiring as many people next summer. He said: ‘We are already looking at what we can do in terms of limiting the opening hours of some of our stores, which will result in some of our staff losing money.’
The Budget is “anti-growth”, he insists, saying: “I was approached last week about taking over a schoolwear company that was for sale.
‘Twelve months ago I would have been interested, but I’m not now.
‘At our head office we have looked at how we can cut costs. We have to raise prices.
‘We have seen the price of goods rise, costing us £400,000 over the last four years, and we have lost margins, but as a successful business you have to maintain margins.’
He predicts that more businesses will close and it will be difficult for people to find jobs, “especially in retail.”
Travel agent Simon Taylor, owner of Farsley Travel, warns that the rise in business rates could be the last straw for his business.
The 49-year-old says: ‘This is our only location and we have three employees. With the rate cut going from 75 percent to 40 percent, on top of everything else, that might be too much for the company. The store already makes a minimal amount – this will wipe out our profits.
“I think Rachel Reeves needs to reconsider this, especially for small businesses. I see us closing, along with quite a few other small businesses. They won’t be able to survive.’
Hardware store owner Mark Cox, 51, accused the Chancellor of using bricks-and-mortar retailers as “soft targets”. “It seems they are leaving the Amazons of this world alone, who can carry on as normal,” the sole proprietor said. ‘They keep talking about change, but I don’t know anything about change for the better. A lot of people say they didn’t get what they asked for.”
Chancellor Rachel Reeves spoke at the CBI conference in London last week
Cake shop co-owner Steven Newbatt, 43, runs The Farsley Cake, which caters for weddings, birthdays and special occasions.
He fears the bill for extra business rates will cost ‘thousands of pounds a year’.
“Many businesses like ours emerged during the tariff cut. Now that it has to be paid with only a 40 percent exemption, that’s a lot of money to find,” he says. “There are only two of us here, but it is a big building and we have four floors, so we will have to pay,” he added. “The only option we have is to raise prices, but people don’t have the money. They just think: ‘I’ll go to Asda and pay £20 for a cake’.
“I think we’ll close – it’s inevitable.”
In a scathing attack on his local MP, he adds: ‘Rachel Reeves? Laugh, she should never have voted.’
The government says it is committed to creating a fairer system that protects the high street.
“The current relief was only temporary as business rates are expected to return to normal in April next year,” a Treasury spokesperson said.
‘Instead, this Government’s action will deliver 40 per cent relief to 250,000 properties, and from 2026 we will permanently reduce business rates for retail, hospitality and leisure businesses for the first time.’
This would be funded by a higher rate from 2026 to 2027 for properties with a rateable value of at least £500,000.
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