RUTH SUNDERLAND: Chancellor in business rate betrayal

This is supposed to be the golden time of the year for retailers. But the holiday spirit is dangerously in short supply. Invoking Scrooge is hardly doing justice to the effect Rachel Reeves’ budget is having on high streets across the country.

The Chancellor has compounded the misery of shops and restaurants that have already struggled to survive the pandemic, the rise of online retail and a business rates system that has been grotesquely unfair for years.

Instead of the anger dying down after the budget, as Reeves would have hoped, the anger is reaching a boiling point as the implications of his triple whammy become clear.

Shops and other venues are facing higher minimum wage costs, a rise in employers’ National Insurance and an abject failure by the Government to deliver on its promise to reform business rates.

Reeves’ budget is also a betrayal of his own sex: he is failing millions of women who work in these sectors, often for low wages.

The dispute over National Insurance has taken priority, but there is latent unrest over business rates.

In its manifesto, the Labor Party committed to reforming the system.

Reeves spoke of “first steps” in the Budget, with a plan to introduce permanently lower rates for High Street businesses operating on less valuable properties. This will be funded by a higher rate on larger facilities, which Labor describes as capturing warehouses used by online giants. However, it will also affect larger traditional retailers such as supermarkets.

This may be quite reasonable in itself, but it will be a problem tomorrow, if ever.

The ‘intention’ – a weasel word if ever there was one – is for these changes to occur from the 2026/April 27 financial year. Meanwhile, smaller High Street businesses will see their rates reduction reduced from 75 per cent to 40 per cent in 2025/26 with a cap of £110,000, so they will have to pay much more.

Labor cynically pretends that this latest measure is a benefit by claiming that the Conservatives would have ruled out relief altogether.

The nonsense of adding points will not help small traders, who will have to find thousands of extra pounds anyway. Business rates raise £26bn of much-needed cash for local economies, so reform must be sustainable.

But the Mail and Mail on Sunday have been campaigning for fairer business rates for years.

The Government had a long time in opposition to formulate its plans. There should be no need to delay it for at least another year.

It will be too late for many, including long-established family businesses, who will close the shutters before the wonderful new regime arrives.

The UK has already lost 6,000 stores in the last five years: in two-thirds of these closures, business rates were a factor in the decision, according to the British Retail Consortium.

If no action is taken, the BRC estimates that another 17,300 stores could close over the next decade.

Those that remain open will likely cut staff, reduce hiring and raise prices, fueling inflation.

Reeves seems obsessed with coddling public sector workers, so she may have missed that retail is the largest private sector employer, providing jobs to millions, most of them women.

A bitter irony is that this country’s first female chancellor – who wants to be seen as a role model for young women in their careers – risks being responsible for putting large numbers of women out of work.