The government is to revisit plans to relax restrictions on Sunday trading hours, as a way to appease supermarkets and other large retailers faced with a new higher level of business rates, The Grocer can reveal.
It’s understood the idea has been informally broached by Treasury sources and comes after supermarket chiefs warned Chancellor Rachel Reeves of the potentially disastrous impact of government plans to hike rates for large stores and online companies.
A delegation of leading retailers met the Chancellor face to face earlier this week for talks to express anger over the plans, which they said would lead to shop closures and redundancies.
The meeting followed legislation passed earlier this year enabling Reeves to use her autumn budget to add up to 10p to the business rates multiplier for larger properties with a rateable value of £500,000 or more, to allow discounted rates for smaller retailers and hospitality operators.
Industry concern has been brewing over the impact of the upcoming budget. A leading source told The Grocer the idea of relaxing Sunday trading had been mooted by the Department for Business and Trade as part of a package of potential mitigation for the higher rate.
“The idea of looking again at Sunday trading hours has been raised by Treasury sources as part of a wider discussion over rates reform and measures that could help retailers, but at the moment there are no firm plans – it’s much more a case of people flying kites,” added another senior source.
“We’ve been down this path at least three times before and each time we have seen a similar pattern of events and the same outcome.
“There will be some retailers who are strongly in favour of this and others opposed. Under the Conservatives perhaps the deciding factor for the plans not going ahead came from those in the party who wanted Sunday to be kept special. With Labour the big fly in the ointment is likely to be the unions.”
Sunday trading hours row
As well as facing an inevitable backlash from trade unions concerned over longer working hours, Labour would meet huge opposition from small shops to any plans to extend Sunday hours for supermarkets.
The ACS has vehemently opposed previous plans to change Sunday trading hours, in the past claiming it would deliver a devastating blow to convenience stores.
Sunday opening hours were temporarily loosened in 2012 for the London Olympics.
In 2016, then business secretary Sajid Javid came up with plans to devolve Sunday trading hours to local authorities under measures in the Enterprise Bill, which would allow councils to ‘zone’ any relaxation so they will be able to prioritise high streets and city centres.
The Tory government again considered scrapping Sunday trading restrictions during the pandemic, as first revealed by The Grocer in March 2020. However once again the plans were dropped, amid a rebellion from Conservative MPs who warned the changes would harm high streets and local shops.
It’s understood the New West End Company, a partnership of 600 UK and international retailers focused on London’s biggest shopping area, which has consistently advocated for relaxing current Sunday trading laws, has been meeting with supermarkets and major retailers to rally fresh support for changes.
Whilst it is inevitable the government would face controversy if it does decide to push ahead with its plans, some believe the economic factors at play mean conditions will now allow Reeves to proceed – although it would be difficult to introduce without becoming bogged down in another drawn-out row.
A source said: “It makes sense to change outdated Sunday trading laws to drive economic growth. Business rates are equally outdated so you can see why the government wants to reform them.
“This change might mean they can get a higher rate over the line as well as providing consumers with more choice.”
The government’s move comes as pressure grows on the Chancellor to do more to help retailers, despite the latest ONS figures showing a 2.7% rise in retail sales in July.
Kris Hamer, director of Insight at the British Retail Consortium, said: “Unfortunately, this level of sales growth makes little dent on the £7bn of new costs that retailers are having to shoulder following last year’s budget. With a date now set for the next budget, government must ensure no additional tax is levied onto retailers, or else many will be forced to make difficult decisions around raising prices, store closures, and jobs.”
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