400 of Britain's largest shops face fresh wave of closures over Labour tax hikes

Hundreds of Britain's largest stores face a fresh wave of closures under Labour's plan to raise business rates.

The British Retail Consortium (BRC) has warned that as many as 400 large-format stores could close if the Government presses ahead with a new surtax on properties with a rateable value above £500,000. The trade body said that "like all of retail," these stores were already struggling with soaring employment costs, heavy taxes, and rising rates bills. As many as 1,000 outlets have closed in the past five years.

Although retail makes up 5% of the economy, it shoulders more than 20% of the entire business rates burden, with large stores accounting for about a third of that total.

With food profit margins as slim as 2% to 4%, the BRC said higher business rates would leave large shops with little choice but to raise prices, cut jobs, or close entirely.

These 4,000 major stores employ one in three of the retail industry's three million workers and act as anchor tenants that draw people into shopping centres, retail parks and high streets.

The BRC noted that its presence helps sustain surrounding pubs, cafes, and independent shops. If 400 disappeared, it is estimated that up to 100,000 jobs could vanish, and councils would lose "well over" £100 million a year in rates income.

The BRC urged the Chancellor to act in the autumn Budget, warning: "Without simply shifting the cost onto larger stores - which would be massively damaging to our high streets".

It proposed excluding large retailers from the new higher rate band and instead adjusting rates for commercial properties such as office blocks, where costs are a smaller factor and the impact on jobs and prices less severe.

BRC chief executive Helen Dickinson said: "Britain's largest shops are magnets, pulling people into high streets, shopping centres and retail parks, supporting thousands of surrounding cafes, restaurants and smaller and independent shops.

"After years of rising costs, far too many stores have disappeared - leaving behind empty shells that once thrived at the heart of our communities. Four hundred more large stores could disappear if the Government forces them into its new higher tax band. This would mean up to 100,000 jobs lost, emptier high streets, and less revenue for the Exchequer.

"The Chancellor can back families, jobs and high streets this autumn, by excluding large shops from the new higher business rates tax band. This would not cost the Exchequer a penny, yet would help secure the future of 400 retail stores, and the communities they support, right across the country.

"But failure to act risks shuttering hundreds more stores, costing jobs, communities and the economy far more in the long run."

The warning comes after the Chancellor said she was considering reforms to business rates, including scrapping "cliff edges" that affect smaller firms. Treasury officials are reviewing the system as part of plans to boost growth and reduce red tape.

Their initial report said small business rate relief rules "can discourage" firms from expanding or investing. Last week, leaders of several major retailers, including John Lewis, met Chancellor Rachel Reeves to press for a shake-up.

Business rates bills already rose this year after discounts for hospitality, retail and leisure firms were scaled back from 75% to 40% in April.