Raymond Sutcliffe is fuming. ‘I didn’t know Rachel Reeves had been in here as a customer,’ says the 61-year-old greengrocer, who owns one of the oldest shops in the Chancellor’s constituency in Leeds. ‘If I had, I’d have barred her.’
His ire is aimed at her controversial Budget decision to slash business rates relief – which means the bill for businesses like his will more than double next year.
It comes on top of big increases in employers’ National Insurance contributions and the national minimum wage.
‘They are going to put us out of business, the way they are going on,’ a rueful Sutcliffe adds of Labour. ‘I don’t mind paying anyone a decent wage, but how is a small business going to survive all these changes at once?’
Sutcliffe, who employs family members including his son Richard, 26, in his century-old shop, went on: ‘I’m glad I’m not starting out. Do they want empty high streets? That’s where they’re heading.’
He is speaking from his store, Sutcliffe’s of Farsley, established in 1900.
With just one vacant 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 its bright shop fronts, newly covered in Christmas decorations, traders in the West Yorkshire town fear her triple whammy of tax rises could tip some of them over the edge.
Raymond Sutcliffe and his son Richard face higher business rates, national insurance costs and staff pay
Sutcliffe’s distress is echoed by some of his neighbouring shopkeepers and across the country, as firms in the retail, leisure and hospitality sector face a £140 million increase in their bills next year.
This is as a result of a move by Reeves to cut business rates relief from 75 per cent to 40 per cent. It means some smaller operators will have to pay significantly more.
Under a ‘temporary’ policy introduced during the pandemic, business rates relief was meant to end in April next year.
Instead the Chancellor, pictured right, extended it for another year, albeit at a lower rate, while promising to introduce a ‘fairer’ system in 2026-27.
But firms, ranging from national chains to the small stores in Farsley that we visited, are calling for an urgent overhaul of the hated levy.
The British Retail Consortium trade body has warned that more than 17,000 shops could close over the next decade unless the system is reformed.
It is not just shops that are affected. The British Beer and Pub Association reckons that the average boozer will see its annual business rates bill go up from £12,000 to about £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 shops and furniture retailers – found that business rates relief would be more difficult to swallow than either the National Insurance contribution or minimum wage increases.
Uphill from Sutcliffe’s greengrocer’s on Farsley’s main shopping street, is Whittakers Schoolwear, which sells uniforms for local pupils.
Hardware store owner Mark Cox says the Chancellor sees small retailers as a soft target
Brad Hutchinson, 41, who is its co-owner, says Reeves’ Budget measures have turned the small chain that he founded with his family from a growing business into one that is being forced to plan cutbacks.
‘The staffing and National Insurance costs next year are going to be an extra £170,000 for us as a business – which is massive,’ he explains.
‘That’s without the increased cost from the loss of business rate relief. We’ve not even looked into that yet. It’s likely to cost us tens of thousands of pounds.’
The most businesses can get in relief each year is £110,000. Hutchinson started the business 16 years ago with his brother and father. It has since grown to ten outlets spread across the north of England.
He employs 70 staff full-time, but that goes up to 270 in the summer, mainly school and college leavers, and university students.
‘For a 16- to 17-year-old doing 27 hours a week, it’s a 30 per cent increase in the cost to us, which is massive,’ Hutchinson said of the tax rises.
He won’t be taking on as many people next summer, saying: ‘We’re already looking at what we can do in terms of reducing opening hours at some of our shops, which will mean some of our staff will lose money.’
The Budget is ‘anti-growth’, he insists, saying: ‘I was approached last week about taking on a schoolwear business which was up for sale.
‘I would have been interested 12 months ago but that’s something I’m not doing now.
‘At our head office, we’ve been looking at how we can make cuts. We’ve got to put prices up.
‘We’ve seen increases in the price of goods, which has cost us £400,000 in the last four years, and we’ve lost margin but you’ve got to retain margin as a successful business.’
He predicts more firms will close and people will find it hard to find jobs, ‘particularly in retail’.
Travel agent Simon Taylor, owner of Farsley Travel, warns that the increase in business rates could be the last straw for his business.
The 49-year-old says: ‘This is our only branch and we have three staff. With the rate relief going down from 75 per cent to 40 per cent on top of everything else, that might be too much for the business. The shop makes a minimal amount as it is – this is going to wipe out our profits.
‘I think Rachel Reeves should reconsider – especially for small businesses. I can see us closing along with quite a few other small businesses. They are not going to be able to survive.’
Hardware store owner Mark Cox, 51, accused the Chancellor of using bricks and mortar retailers as ‘soft targets’. ‘They do seem to be leaving alone the Amazons of this world who seem to be able to carry on as normal,’ the sole trader said. ‘They keep talking about change but I don’t know about change for the better. A lot of people are saying they didn’t get what they asked for.’
Chancellor Rachel Reeves speaking 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’.
‘A lot of businesses like ours have started up during business rate relief. Now having to pay it with only 40 per cent relief is a lot of money to find,’ he says. ‘There’s only two of us here but it’s a big building and we have four floors, so we’ll have to pay it,’ he added. ‘The only option we’d have is to put prices up but people haven’t the money – they’ll just think ‘’I’ll go to Asda and pay £20 for a cake’’.
‘I think that we’ll shut down – it’s inevitable.’
In a scathing attack on his local MP, he adds: ‘Rachel Reeves? Are you having a laugh, she should never have been voted in.’
The Government says it is committed to creating a fairer system that protects the High Street.
‘The current relief was only temporary, with business rates expected to return to normal in April next year,’ a Treasury spokesperson said.
‘Instead, action taken by this Government is 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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