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Labour 'risks destruction of the High Street': Retailers say Reeves's budget will mean shops closures, job cuts and higher prices By EMILY HAWKINS Updated: 22:01 GMT, 20 November 2024 e-mail 4 View comments The boss of Lidl has said that the retail industry is ‘reeling’ from the Budget amid warnings it will lead to the ‘destruction’ of the High Street. Lidl GB chief executive Ryan McDonnell said hikes to National Insurance, wages and business rates will cost it ‘tens of millions’ of pounds and could push up prices. The supermarket was among more than 80 major store chains, including Tesco, Marks & Spencer and Boots, to sign a letter this week warning Chancellor Rachel Reeves that shops will close, jobs will be lost, and prices will go up as a result of her Budget.
Warning: Lidl GB chief executive Ryan McDonnell said hikes to national insurance, wages and business rates will cost it 'tens of millions' of pounds and could push up prices The letter warned the industry faces a £7billion hit. And today, the boss of the British Independent Retailers Association warns many firms are ‘fearing for their very survival’. Andrew Goodacre, whose 4,500 members range from garden centres to department stores, says that the Budget ‘has sent shivers throughout the entire retail and hospitality industries’.
Writing in the Mail, he cautions that Reeves risks ‘begetting the very High Street destruction’ Labour says it wants to avoid and calls for proposed rises in business rates to be reversed. He says: ‘High street shops can take no more.’ His comments come after UK Hospitality – an industry group that represents 130,000 venues including bars, restaurants and hotels, yesterday said the Government must ‘urgently rethink’ the National Insurance hike to stem rising inflation and looming job losses.
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Share this article Share HOW THIS IS MONEY CAN HELP How to choose the best (and cheapest) stocks and shares Isa and the right DIY investing account Last month Reeves raised the National Insurance rate paid by employers on staff wages from 13.8 per cent to 15 per cent and cut the threshold at which firms start paying it from £9,100 to £5,000. This disproportionately affects retailers as they employ many people on part-time contracts.
The £25billion tax raid came alongside inflation-busting increases to the minimum wage, higher business rates and a new rights for workers that will cost employers £5billion a year. Lidl chief McDonnell said the package of higher costs ‘poses a challenge’ for his 960 UK shops. ‘There is a lot of impact we will have to negotiate,’ he said.
‘The industry is reeling. We are talking about £7billion for the whole industry. For us it will be in the tens of millions.
’ Despite the blow, he said Lidl was on course for ‘our biggest Christmas ever’, having won shoppers from rivals. The comments came as accounts showed Lidl GB revenues rose 16.9 per cent to £10.
9billion last year while it swung to a profit of £43.6million, having lost £76million the previous year. Workers face the axe as part of plans by private equity-owned supermarket Morrisons to close its Rathbones bakery in Wakefield with the loss of 378 jobs.
HMV: They are tone deaf Staff costs: HMV boss Doug Putman The Budget has pitted the Government against businesses and workers, the owner of HMV has declared. Doug Putman, the Canadian billionaire behind the vinyl and CD store, has put plans for more stores ‘on pause’ as it is no longer ‘worth the risk’. He hinted at cutting staff costs and raising prices.
‘How does that help overall?’ said Putman, who owns Toys R Us and saved HMV from administration in 2019. He said the Budget pitted workers and businesses against the Government. ‘I think the Government is lost, it is tone deaf,’ he said.
‘If that’s the Budget, you have sorely missed the mark, not just with retail, with the farmers, the list goes on. ‘I wish we had politicians who had a bit more understanding. I don’t think they have ever had to run a floor and work in a shop.
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