More than 60,000 small shops and 150,000 jobs are at risk unless the government delivers business rates reform in full in the autumn budget, according to the Co-op.
The retailer is calling on Rachel Reeves to make full use of new powers to cut business rates for small shops from 2026.
Legislation passed earlier this year enables the Chancellor to use the autumn budget to raise the rate of tax for the largest business properties to fund a cut for smaller retail, hospitality and leisure premises. The BRC has repeatedly called for large shops to be exempt from the higher rate and for other sectors to fund a discount for small shops instead. Reports earlier this month suggested Reeves was preparing to heed the call.
Co-op group CEO Shirine Khoury-Haq today said the proposals as they stood would ease the burden for 99% of retailers, and warned there was a danger small shops were “not being heard”.
“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,” she said.
“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.”
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ACS CEO James Lowman backed her call, saying: “It’s essential the budget includes a meaningful long-term reduction in rates bills for convenience stores to incentivise investment and provide much-needed certainty for the future.”
An Opinion Matters survey of 300 small high street business owners for the Co-op found 13% said they would be at risk of closure without business rates reform, and 19% said they would be forced to cut staff numbers to stay open. Applying the percentages to the 483,000 small retail businesses in England puts 62,000 at risk of closure without rates reform and 91,000 facing laying off staff to stay open.
Public support
Separate YouGov research found 56% of UK adults saw local shops as important to their wellbeing, but 69% doubted the government would deliver on its promise of a rates cut for them.
Khoury-Haq said: “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% 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 proposed reforms are to replace business rates relief for RHL properties, which was introduced in response to the pandemic and stands at 40%, with a cap of £110,000 per business.
Lowman said it made it all the more essential that the government make “full use of new powers to introduce a permanently lower multiplier for local shops”.
“We’ve been calling on retailers throughout the summer to write to their MPs on the impact that business rates increases are having on their investment plans, and have engaged directly with the Treasury to outline the difficult decisions retailers are already having to make as a result of higher bills,” Lowman said.
Online giants
The call was echoed by business owners who urged the government to level the playing field between high street and online giants, which was the intention of the legislation.
“The high street still matters,” said Benedict Selvaratnam, owner of Freshfields Market in Croydon, Surrey.
“It’s where people meet, work, and live. Without rates relief and reform, we’ll see more closures, more risk-averse owners, and less investment in our towns.
“We were expecting government to follow through on their manifesto commitments, to look at redistribution, to ensure online giants pay their fair share, and to support bricks & mortar businesses.”
Jack Matthews, owner of Bradley’s Supermarket in Quorn, Leicestershire, said: “We’ve always played an important role in the community. For many elderly people, sometimes we’re the only conversation they have in a day, and we’re proud to play that role.
“We need the government to deliver rate relief in the autumn budget. Losing a convenience store in a rural community could have a huge impact, and those are the stores that need government support the most.”
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