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 banned it.”
Their anger is directed at his controversial budget decision to slash business rates relief, meaning the bill for businesses like his will more than double next year.
It comes on top of large increases in employer contributions to National Insurance and the national minimum wage.
“The way they’re acting, they’re going to put us out of business,” adds a rueful Sutcliffe of the Labor Party. “I don’t mind paying anyone a decent wage, but how is a small business going to survive all of these changes at once?”
Sutcliffe, who employs family members including his son Richard, 26, in his century-old shop, continued: ‘I’m glad I’m not starting out. Do they want empty main streets? That’s where they’re headed.
He speaks from his shop, Sutcliffe’s of Farsley, founded in 1900.
With just one empty 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 their shiny facades, freshly covered in Christmas decorations, the West Yorkshire town’s traders fear its triple whammy of tax rises could push some of them over the edge.
Raymond Sutcliffe and his son Richard face business rates, national insurance costs and higher staff salaries
Sutcliffe’s distress is echoed by some of his neighboring traders and across the country, as businesses in the retail, leisure and hospitality sectors face a £140m increase in their bills next year.
This follows a move by Reeves to reduce business rates relief from 75 per cent to 40 per cent. This means that some smaller operators will have to pay much more.
Under a “temporary” policy introduced during the pandemic, business rates relief was due to end in April next year.
Instead, the Chancellor (pictured right) extended it for a further year, albeit at a slower pace, while promising to introduce a “fairer” system in 2026-27.
But businesses, from national chains to the small shops in Farsley we visited, are calling for an urgent review of the hated tax.
Trade body British Retail Consortium has warned that more than 17,000 stores could close over the next decade unless the system is reformed.
It’s not just stores that 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 seen by The Mail on Sunday from the Independent Retailers Association, whose 4,500 members include garden centres, DIY stores and furniture retailers, found business rates relief would be harder to accept than Insurance contribution National or minimum wage increases. .
Uphill from Sutcliffe’s greengrocer, on Farsley’s main shopping street, is Whittakers Schoolwear, which sells uniforms for local pupils.
Hardware store owner Mark Cox says Chancellor sees small retailers as an easy target
Brad Hutchinson, 41, co-owner, says Reeves’ budget moves have turned the small chain he founded with his family from a growing business to one forced to plan cuts.
“Staff and national insurance costs next year will be an extra £170,000 for us as a business, which is huge,” he explains.
‘That’s without the increased cost of losing business rates relief. We haven’t even looked into that yet. It is likely to cost us tens of thousands of pounds.
Most businesses eligible for help each year are £110,000. Hutchinson started the business 16 years ago with his brother and father. Since then, it has grown to have ten stores spread across the north of England.
It employs 70 people full time, but that figure rises to 270 in the summer, mainly school and college leavers and university students.
“For a 16- to 17-year-old working 27 hours a week, it’s a 30 percent increase in cost to us, which is huge,” Hutchinson said of the tax increases.
Next summer it will not hire as many people and says: “We are already looking at what we can do to reduce opening hours in some of our stores, which will mean some of our staff will lose money.”
The budget is “against growth,” he insists, saying: “Last week I was approached about taking over a school clothing business that was for sale.”
‘I would have been interested 12 months ago, but that’s something I’m not doing now.
‘At our head office we have been looking at how we can make cuts. We have to raise prices.
“We have seen increases in the price of goods, costing us £400,000 in the last four years, and we have lost margin, but you have to preserve the margin as a successful business.”
He predicts more businesses will close and people will find it difficult to find jobs, “particularly in retail.”
Travel agent Simon Taylor, owner of Farsley Travel, warns that rising business rates could be the last straw for his business.
The 49-year-old says: ‘This is our only branch and we have three employees. With rate relief dropping from 75 per cent to 40 per cent on top of everything else, that could be too much for the business. The store earns a minimal amount as it is; This will wipe out our profits.
‘I think Rachel Reeves should reconsider, especially for small businesses. I can see us closing along with many other small businesses. “They won’t be able to survive.”
Hardware store owner Mark Cox, 51, accused the Chancellor of using traditional retailers as “soft targets”. “It seems that they are leaving the Amazons of this world alone, who seem to be able to carry on as normal,” said the exclusive trader. ‘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 extra business rates bill will “cost thousands of pounds a year”.
‘Many businesses like ours were launched during the reduction in business rates. Now having to pay it with only 40 percent relief is a lot of money to get it,” 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 it,” he added. “The only option What we should do is raise prices, but people don’t have money; They’ll just think, “I’ll go to Asda and pay £20 for a pie.”
“I think we will close; it’s inevitable.”
In a scathing attack on his local MP, he adds: ‘Rachel Reeves? Are you laughing? They should never have been chosen.
The Government says it is committed to creating a fairer system that protects the High Street.
“The current relief was only temporary, and business rates are expected to return to normal in April next year,” a Treasury spokesperson said.
“Instead, the measures taken by this Government are delivering 40 per cent relief for 250,000 properties, and from 2026 we will permanently cut business rates for retail, hospitality and leisure businesses for the first time.”
This would be funded by a higher rate from 2026-27 on properties with a rateable value of at least £500,000.
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