Roberto Lobue, Partner and Retail Sector Specialist at accountancy and advisory firm Menzies LLP, says without employment reforms and a more stable tax regime, UK high streets won’t survive another parliament:
“Burnham’s focus on business rates could present a last stand for UK high streets as we know them. These are places built on community and employment opportunities as well as avenues for tax receipts, and many pubs, restaurants and retailers won’t survive another parliament under a system currently deemed unfair for those that work within it. Shifting part of this burden on to owners of empty properties and distribution warehouses, however, could target further imbalances, noting that many of the businesses that fill our highstreets store and sell stock through the very same locations, and many empty properties are not left vacant out of choice.
“Retail is a markedly more difficult sector than it was even when Labour first took office, with businesses large and small caught between rising utility and wage costs and softer consumer demand, all against a backdrop of persistent inflation. Domestic pressures are compounded by international competitors undercutting on price due to a comparatively lower tax burden. The removal of COVID-era reliefs and the impact of global tariffs continue to bear down on British businesses, compounded further by ongoing geopolitical crises, and the Employment Rights Act now adds to this list. Guaranteed hours risk reducing the part-time and weekend roles that the sector typically provides to younger generations, which could leave the sector more exposed in its most fragile era, and come at a cost, given the need to generate tax receipts to fund new government plans.
UK retail needs the stability to plan ahead rather than remaining stuck in reactive mode, backed by a tax regime settled enough to give employers the confidence to hire and consumers more in their pockets to spend. Policies from De Minimis exemptions to business rates have been in limbo for years now, and while business rates reform could ease part of the sector’s strain, its success depends on whether it adds or removes costs and complexities that could shift again later down the line. Our advice to clients is to watch how the government’s direction develops between now and the Autumn Budget, rather than acting on early rumours, much of which could change should a new Chancellor take office.”
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