Up to 100,000 jobs on the high street are at risk if the Labour Party proceeds with tax changes, industry leaders caution. Around 400 major retailers in the UK, spanning supermarkets to department stores, could shut down if proposed adjustments to business rates are implemented. The British Retail Consortium highlights that approximately 4,000 large stores with a rateable value above £500,000 are in jeopardy under the new plan. Should these 400 stores close, the potential loss of jobs could exceed 100,000, leading to a significant drop in business rates revenue for local councils.

During a recent meeting, Chancellor Rachel Reeves was urged by store executives, including Jason Tarry of John Lewis, to urgently reform the business rates system, which poses a significant financial burden for retailers. The BRC emphasizes the importance of large stores in attracting foot traffic to high streets and shopping centers, supporting various local businesses. The organization warns that forcing large stores into a higher tax band could result in a detrimental impact on jobs, local economies, and government revenue.

With the retail sector contributing 5% to the economy but bearing over 20% of all business rates expenses, the BRC advocates for excluding large stores from the proposed tax hikes. The trade body suggests redistributing the burden to other large properties, like office buildings, where business rates constitute a smaller proportion of costs. The Treasury plans to unveil further details in the upcoming Budget, ensuring that only a small percentage of properties will face increased rates.

In response to calls for reform, the Treasury emphasizes its commitment to a fairer business rates system that supports the high street and encourages investment. Lower tax rates for retail, hospitality, and leisure properties are set to be introduced in April, funded by higher rates on a minimal percentage of valuable business properties. The government aims to eliminate cash caps on these lower rates and address system inefficiencies to facilitate small business growth.

As discussions continue on improving the business rates framework, Chancellor Reeves explores options to eliminate obstacles for small firms and promote economic growth. Proposals include revising rules around small business rates relief to spur expansion and investment. The goal is to create an economy conducive to growth that benefits both businesses and workers.

Industry stakeholders, such as Kate Nicholls of UKHospitality, welcome the government’s efforts to reform the flawed business rates system that has historically disadvantaged businesses in the hospitality sector.