Rachel Reeves is under mounting pressure to reform business rates as figures show 225,000 High Street jobs have been lost over the past five years.
The number employed in retail has fallen from 3.1m to less than 2.9m since 2019, according to analysis of official data by the British Retail Consortium (BRC).
And a survey by the Institute of Directors (IoD) found that for the economy as a whole, hiring intentions are at their lowest level since the height of the pandemic in 2020 following Labour’s raid on employer national insurance (NI).
Retailers are suffering both from the NI raid – which they say will cost them £7billion next year and breached the Labour manifesto – and a business rates system they argue is in desperate need of reform.
At the same time, they are being hit by increases in the minimum wage. The BRC argues that without changes to the business rates system, even 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 relief schemes. Instead, rates relief for hospitality and retail businesses was cut to 40%
Retailers including Currys and Primark have already warned that increases in staff costs mean they will increasingly turn to automation.
BRC chief executive Helen Dickinson said: ‘The Government’s promised reforms of business rates give it a lever to protect future investment and it is vital they ensure no shop pays more as a result of these reforms.
‘Without this, more stores will be forced to close, meaning fewer retail jobs in communities right across the country.’
The business rates system is a levy based on the rental value of a commercial property – meaning that shops pay a premium compared with online giants such as Amazon.
Before the Budget, bosses had called on the Chancellor to extend Covid-era relief schemes which cut their business rates bills by 75 per cent.
They also wanted to see the introduction of permanent reforms to the system that would level the playing field.
Instead, rates relief for hospitality and retail businesses was cut to 40 per cent.
Reeves also announced plans intended to bring down business rate bills for most High Street stores at the expense of larger commercial premises, which will have to pay more.
The idea is to snare big warehouses used by the likes of Amazon but it could backfire – as the proposals will also hit larger bricks and mortar stores.
Retail firms are not the only employers facing pressure to cut back labour costs.
Figures yesterday from the Office for National Statistics (ONS) showed employee numbers across the UK 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, principal policy advisor for employment at the IoD, said the data ‘points to a worrying outlook for job creation in the UK’.
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