By Stephen Patterson, Chief Executive at NE1 Ltd
Death and taxes are memorably the only certainties in life. This month, taxes will be the number one concern for businesses as they face a maelstrom of increasing costs.
A triple whammy made up of the hike in Employer National Insurance Contributions, the rise in the minimum wage, and cuts to business rate relief will create a perfect storm, hitting at a time when many businesses are already struggling with soaring operational costs and volatile economic conditions. High street retail and leisure businesses, reliant on bricks and mortar premises, will be hardest hit.
Without government support and action, job cuts, loss of investment, poor growth and business closures are likely, as well as price rises for customers. In the long term, without action, the very survival of our flagship high streets, the lifeblood of our country, is under threat. This is not scaremongering; the government itself has acknowledged the critical role UK high streets play as engines of growth both nationally and locally. Without a robust plan, flagship high street destinations could feasibly become unsustainable and risk collapse.
Working on behalf of our businesses to address these issues, NE1 is proud to have joined forces with other business partnerships nationally to form High Streets UK, a pro-growth coalition representing over 5,000 businesses across the country that contribute over £50 billion in Gross Value Added (GVA) annually. Business representatives from Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Leeds, Liverpool, London, and Newcastle have come together to tackle the most pressing issues facing the UK’s flagship High Streets and to unlock local and national growth.
One of the immediate and most pressing challenges high streets face is the crippling and complex business rate system in this country which has been recognised for many years as unwieldy and not fit for purpose. We welcome this government’s long-overdue commitment to reviewing and reforming business rates, which was announced in the Autumn Budget, and have actively contributed to the Government’s Business Rates Discussion Paper.
More importantly, following High Streets UK’s inaugural quarterly forum, held in Liverpool, we submitted a series of policy recommendations to the government; all are realistic and achievable and have been shaped by insights from our 5,000 business members operating on flagship high streets nationwide. We have called for decisive action to avoid store closures and job losses, two of the unintended consequences we foresee resulting from rate rises.
Under the government’s current proposed reforms, properties with rateable values exceeding £500,000 could face a business rate multiplier of up to 10p higher than the current level. This would place an unfair and disproportionate burden on physical flagship high street locations. Upcoming rates revaluations which are scheduled for 2026 fuel additional uncertainty and will deter short to midterm investment.
Whilst we support a permanent rate reduction for smaller retail, leisure and hospitality businesses when the temporary relief ends in 2026/2027, the current proposals place an excessive burden on flagship high streets and large businesses based there. We are also pressing for a full impact assessment of the proposed multiplier increases and a freeze on any rise in the higher multiplier until 2027/28 to provide businesses with much-needed certainty and time to plan.
Properties in the heart of city centres – often occupied by large retail, hospitality, or leisure operators, and businesses in professional services – play a vital role as major employers, anchors of their local communities and drivers of footfall. If these businesses falter, the ripple effect will be felt throughout the high street and beyond.
We urge the government to adopt our proposals for reforming business rates to protect the high street, encourage investment and create a fairer, more sustainable system.
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