Retail serves as the largest private-sector employer in the UK, with close to three million individuals engaged in various roles within shops, warehouses, transportation, and corporate offices. Among these workers, 365,000 belong to the Usdaw union, representing a diverse range of employees from those needing flexibility to seasoned retail professionals who have advanced into managerial positions without formal qualifications.
When considering the broader supply chain encompassing farmers, drivers, warehouse staff, and service providers, retail plays a fundamental role in the everyday economy. However, the sector has faced challenges in recent years, witnessing a significant decline in job opportunities. Over the past decade, around 350,000 retail jobs have disappeared, with 100,000 lost just in the previous year. Additionally, over 10,000 stores closed their doors in the same period, impacting both individual livelihoods and the vitality of high streets.
To address these issues, the government has proposed a permanent reduction in business rates for retail, hospitality, and leisure establishments. This initiative is seen as a positive step to alleviate the burden on these sectors, especially considering that while retail makes up only a small portion of the economy at 5%, it contributes over 20% of all business rates collected, creating an imbalance that disproportionately affects community-based retail outlets.
To finance these rate reductions, there is a proposal to increase business rates for large non-domestic properties, which could inadvertently impact supermarkets and major retail stores, jeopardizing jobs and potentially leading to higher consumer prices. Such a move could trigger reduced working hours for employees, store closures, and price inflation, ultimately affecting working-class individuals and consumers.
It is crucial to recognize the interconnectedness of the retail ecosystem, where the success or struggles of larger stores can have a cascading effect on neighboring businesses, causing a ripple effect within local communities. Therefore, prioritizing fairness and sustainability in the Autumn Budget is essential to safeguarding good jobs, enhancing living standards, and supporting inclusive economic growth.
One viable solution proposed is to exclude small shops from increased business rates and instead slightly raise rates on larger commercial properties, such as office buildings, where the impact on costs and employment is more manageable. This approach aims to maintain revenue levels for the government while minimizing adverse effects on workers and prices, striking a balance that benefits all stakeholders.
As stakeholders advocate for a brighter future for towns and cities, there is a shared vision for empowering retail workers with secure, well-compensated jobs and revitalizing commercial hubs across the country. Collaborative efforts between industry representatives like Usdaw and the British Retail Consortium are essential in shaping a sustainable future for the retail sector, beginning with prudent decisions in the upcoming budget to protect businesses and their workforce.
The call for a substantial and enduring reduction in business rates for smaller retail establishments, coupled with a commitment to ensure no shop faces increased financial burdens, underscores the need for a fair and equitable approach to revenue generation that supports the long-term prosperity of the sector and the communities it serves.
