Co-op warns 150,000 jobs at risk

The Co-op has issued a warning that 60,000 small shops and 150,000 jobs could be at risk without reform to business rates in next month’s Autumn Budget. The group has stressed that Britain’s high streets are at a “critical moment” and urged Chancellor Rachel Reeves to announce “maximum” business rates relief on 26 November.

This call for action follows reports that Rachel Reeves is considering addressing the “cliff-edge” business rates, which impose higher taxes on small businesses when they open a second property. The Chancellor is reviewing potential changes to the small business rates relief, with a decision anticipated in the Autumn Budget. Treasury officials have highlighted concerns about the “sudden jumps” in taxes faced by small street shops when expanding.

The government is contemplating a shift from “slab” business rates, where a single multiplier applies to the full rateable value of properties, to a “slice-based” marginal tax rate system, where bands are taxed at increasing rates. Under the current system, firms with retail, hospitality, and leisure properties valued under £500,000 face lower tax rates, while those above this threshold pay a higher rate. The new rates for businesses will be set in this year’s Autumn Budget, but Reeves has suggested that reliefs for businesses with properties valued under £15,000 might be adjusted.

Last month, the British Retail Consortium warned that increasing business rates on large shops could hinder efforts to combat inflation.

According to YouGov research, seven in ten UK adults lack confidence in the government’s commitment to delivering small business relief. The data indicates that without business rates reform, 10% of small high street business owners might need to lay off staff, and one in eight could face closure.

The research also reveals that 77% of small high street shop owners view business rates reform as essential for survival, with 44% struggling to grow without protections. Furthermore, 36% of respondents would freeze pay rises, and 26% would halt hiring altogether. Additionally, 77% would support an online retail tax to create a level playing field with e-commerce giants.

Shirine Khoury-Haq, CEO of Co-op Group, stated: “As we approach a critical Autumn Budget, there’s a real danger that the voices of small shops – and the communities they serve – are not being heard. Local shops aren’t just businesses; they’re part of the social fabric of Britain. For some, a visit to a local store is one of the few chances they have to chat to someone and feel connected. This research shows a clear public mandate for action.

“Regardless of how they vote, the majority of people want the government to do more to protect their high streets. This is an opportunity for the government to really prove to people that they will do what it takes to make a difference to people’s communities and to their wellbeing. The proposed system would improve the financial situation of 99% of retailers. How much they are protected from tax rises depends on decisions made in this Budget.

“To boost local economies, create jobs and provide community cohesion, we need inclusive growth. That means supporting the businesses on the corners, in the precincts, on the parades and the high streets of every community. In order for them to not only survive, but to thrive, the government has to commit to the maximum levels of relief.”

The Co-op’s claim that 60,000 businesses could close and 150,000 jobs could be lost if business rates are not reformed in the Autumn Budget is based on survey data from Opinion Matters. According to these figures, 12.82% of small high street business owners in England say they would be at risk of closure without business rates reform. Additionally, 18.92% of small retail businesses said they would either be forced to cut staff or risk closure without reform.

Data from the UK Statistics Authority indicates there are approximately 482,810 small retail businesses in England. Applying the 12.82% figure suggests that 61,896 businesses are at risk of closure without rates reform. For the 18.92% statistic, 91,348 businesses could be forced to cut staff or face closure. The Co-op estimated that between 100,000 and 200,000 jobs are at risk if small businesses have to reduce headcount by between 5% and 30%, with 150,000 used as a midpoint.