How Will Labour’s Policies Impact UK Businesses?

With statistics indicating 2025 will be the worst fiscal year for retailers since the pandemic, experts have painted a bleak picture of the high street, as quoted in a report by the Daily Star.

ALSO READ
Kim Kardashian is obsessed with Princess Diana, she is on a mission and doing this

Research on store and company closures on UK high streets was conducted by the Centre for Retail Research (CRR). Labour recently unveiled new policies in their budget that are reportedly going to have a significant impact on businesses.

They claimed that higher business rates and employment costs, which Rachel Reeves introduced in November, could result in the loss of up to 202,000 jobs the following year.

According to recent statistics, the already struggling high streets could suffer a staggering £7 billion loss as a result. By September 2024, there will be 6,945 high street stores in the UK, with 38 closing every day.

Lower wages, fewer employees, and higher customer prices are the main effects of the new budget on workers. A total of 169,395 retail jobs have already been lost by businesses this year, a 41.9% increase over 2023.

Major high-street retailers like The Body Shop, Homebase, and Carpetright have gone out of business this year.

Joshua Bamfield, a professor at the Centre, told This Is Money that many retailers had to make even more drastic cuts due to the issues of shifting consumer shopping habits, inflation, and rising energy costs, rents, and business rates.

Many businesses relied on the business rate relief, which has been reduced in the new budget.

The rate has been lowered even though it has been extended once more for the retail, hospitality, and leisure industries. The rate will now be reduced to 40% from its previous 75%. With their rates bill for 2025–2026 nearly doubling, many UK businesses will be hard hit.

Experts believe this will take the UK back to pandemic levels, which saw severe recession and an unprecedented drop in GDP. Additionally, 345,000 businesses shut their doors in 2022 following massive COVID disruption.

FAQs

Why are job losses predicted for the UK in 2025?
Higher business rates and employment costs, combined with inflation and energy expenses, are forcing retailers to cut jobs and close stores, as outlined in Labour’s recent budget.

Which businesses will be the most impacted?
Independent and smaller businesses, particularly those in retail, hospitality, and leisure, will struggle the most as a result of reduced rate relief and rising operational costs.