Co-op warns 150,000 jobs at risk ahead of Autumn Budget
The Co-op has warned that 60,000 small shops and 150,000 jobs could be lost without business rates reform in next month’s Autumn Budget.
The Manchester-headquartered group has said Britain’s high streets “face a critical moment” and that Chancellor Rachel Reeves needs to announce “maximum” business rates relief on 26 November.
The call comes after City PM reported in September that Rachel Reeves is exploring “fixing” cliff-edge business rates, which make small businesses pay higher taxes upon opening a second property.
The Chancellor is reviewing changes to the small business rates relief, with a decision expected to be announced at the Autumn Budget.
At the time, Treasury officials pointed to concerns small street shops faced “sudden jumps” in taxes when opening a new property.
The government is set to consider moving “slab” business rates, where a single multiplier is paid on the full rateable value of properties, to a “slice-based” marginal tax rate system, where bands are taxed at increasing rates.
Firms face lower tax rates for retail, hospitality and leisure properties with a rateable value of less than £500,00 while those above the threshold pay at a rate determined by a higher multiplier.
The new rates for businesses will be set at this year’s Autumn Budget but Reeves has indicated that reliefs for businesses with properties at a rateable value of less £15,000 could be changed.
Also last month, the British Retail Consortium warned that the government risks ‘losing the battle’ against inflation if business rates on large shops rise.
Online tax backed to ‘level the playing field’
According to new research from YouGov, seven in ten UK adults lack confidence that the government will deliver on its promise of relief for small businesses.
The data also shows that if business rates reform is not delivered, 10 per cent of small high street business owners say they would need to lay off staff, and one in eight say they would be at risk of closure.
Also according to the research, 77 per cent of small high street shop owners say business rates reform is essential for survival while 44 per cent would struggle to grow without protections.
A total of 36 per cent of respondents said they would freeze pay rises and 26 would halt hiring altogether.
The research shows that 77 per cent would back an online retail tax to ‘level the playing field’ with e-commerce giants.
Business rates reform an ‘opportunity’ for Rachel Reeves, Co-op boss
Shirine Khoury-Haq, Co-op Group CEO, said: “As we approach a critical Autumn Budget, there’s a real danger that the voices of small shops – and the communities they serve – are not being heard.
“Local shops aren’t just businesses; they’re part of the social fabric of Britain. For some, a visit to a local store is one of the few chances they have to chat to someone and feel connected.
“This research shows a clear public mandate for action. Regardless of how they vote, the majority of people want the government to do more to protect their high streets.
“This is an opportunity for the government to really prove to people that they will do what it takes to make a difference to people’s communities and to their wellbeing.
“The proposed system would improve the financial situation of 99 per cent of retailers. How much they are protected from tax rises depends on decisions made in this Budget.
“To boost local economies, create jobs and provide community cohesion, we need inclusive growth.
“That means supporting the businesses on the corners, in the precincts, on the parades and the high streets of every community. In order for them to not only survive, but to thrive, the government has to commit to the maximum levels of relief.”
The methodology
The Co-op’s headline claim that 60,000 businesses could close and 150,000 jobs lost of business rates are not reformed in the Autumn Budget is based on survey data from Opinion Matters.
According to those figures, 12.82 per cent of small high street business owners in England say they would be at risk of closure without business rates reform.
It also found that 18.92 per cent of small retail businesses said they would either be forced to cut staff or risk closure without business rates reform.
Data from the UK Statistics Authority shows that there are approximately 482,810 small retail businesses in England.
When taking that number, applying 12.82 per cent means that 61,896 businesses are at risk of closure without rates reform.
For the 18,92 per cent statistic, 91,348 businesses would be forced to cut staff or be at risk of closure.
On the jobs line, The Co-op said it estimated how many roles would be lost of small businesses had to cut between five per cent and 30 per cent of its headcount.
That would equate to between 100,000 and 200,000 jobs at risk, with 150,000 being used as a midpoint.