Minister demands quick rates reform: Reynolds urges Reeves to act as High St morale collapses

A Cabinet minister has called for business rates to be reformed “as soon as possible”.

Business Secretary Jonathan Reynolds’ comments came as a growing backlash against the budget from British corporations increases pressure on the government to act.

The High Street has been reeling from a £7bn hit due to the National Insurance tax raid and the minimum wage rise announced by Rachel Reeves last month to combat inflation.

In a further setback for retailers and hospitality, the Chancellor failed to deliver on her promise to replace business rates with a fairer system and instead left businesses with higher bills from April.

The extent of disappointment across the industry was underlined yesterday when a survey by business lobby group CBI showed confidence in the high street fell at the fastest rate in two years after the budget.

The Labor Party has faced an avalanche of criticism since Reeves announced a £40bn tax rise last month, which critics say breached a stated promise not to increase National Insurance, was anti-business and will cost jobs.

The High Street was just one area of ​​the economy affected. Retailers are demanding a fundamental overhaul of the business rates system to soften the blow.

The British Retail Consortium estimates that 17,300 stores will close over the next decade unless the tariff regime is reviewed.

The issue has been highlighted by the Mail’s Save Our High Streets campaign.

Asked about the situation by MPs yesterday, Reynolds said: ‘I want business rates reform as soon as possible and as extensive as possible.

“The type of conversation we want has to cover not only the future structure of business rates but also some of the broader points and evasion issues.”

Addressing members of the House of Commons business committee, he added: “I really recognize how important this is to all of us, regardless of where we represent, the health of the High Streets and the future of business rates are an important part of that”. .’

The CBI report found high street confidence fell at the fastest rate in two years in the wake of the Budget as retailers reeled from an onslaught of higher costs.

“The last time retailers felt this gloomy was in November 2022, at the peak of the inflation shock,” said CBI chief economist Ben Jones.

“Sharp increase in employers’ national insurance next year will hit retailers hard.”

The list of companies that warned that tax increases would hurt their prospects also continued to grow.

Bike and motor repair chain Halfords, online giant AO World and building materials store Topps Tiles yesterday became the latest big retailers to warn of the impacts of Reeves’ budget, saying it will add costs worth million pounds.

AO World estimated its wage bill will rise by around £8m due to increased employer National Insurance contributions and next April’s pay rise.

Founder and CEO John Roberts said the chain will likely have to raise prices and make savings to mitigate the impact.

He added: ‘This whole budget is extremely inflationary for retailers. Is anyone naive enough to think that won’t be reflected in pricing?

Meanwhile, Halfords said it faces a £23m hit from the budget measures and may need to increase repair shop prices.

The company said the cost implications were “particularly serious” given its workforce of more than 12,000 people.

Only £9 million of additional cost burden was already included and mitigated in its plans for 2025-26.

Boss Graham Stapleton said: “The cost implications of the budget are particularly acute for a specialist retailer that provides expert advice and support to customers, face to face.”

Topps Tiles also said it expects £4 million in additional costs from next April.