Boots last week (November 18) signed a letter sent to Chancellor Rachel Reeves sharing businesses’ “significant concerns” about the “impact of the budget on the retail industry”.
“The sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable and higher prices a certainty,” the letter said.
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Sent by the British Retail Consortium (BRC), the letter was signed by the chief executives of 82 businesses who said that “for any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timescale”.
“The effect will be to increase inflation, slow pay growth, cause shop closures and reduce jobs,” it said.
“We are already starting to take difficult decisions in our businesses and this will be true across the whole industry and our supply chain,” it added.
Bills will “significantly increase”
The letter acknowledged the government’s “focus on improving the fiscal situation and investing in public services”.
But it raised concerns that the “proposals [would] merely redistribute rates within the industry and would see many retailers’ bills significantly increase”.
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The letter said that the rise in NICs, the reduction in the threshold at which employers start paying them and the increase in national living wage from April 2025 – as well as a packing levy from October 2025 – could increase the retail industry’s costs “by up to £7 billion a year”.
“As things stand, retailers’ bills will increase by £140 million in April 2025 due to the inflationary uplift and a reduction in the existing retail discount for those businesses that receive it,” it added.
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“Changes must lead to a significant, permanent reduction of rates bills for all retail properties if they are to offset the effects of the extra costs above in any meaningful way,” it said.
The letter also said that the businesses would “welcome the opportunity to meet with [government] to discuss [their] concerns and to work together on a solution”.
“By adjusting the timing of some of these changes, the government would give businesses time to adjust and greatly mitigate their harmful effects,” it added.
“Real consequences”
Meanwhile, Community Pharmacy Scotland (CPS) also last week (November 20) sent a joint letter to the cabinet secretary for finance calling for support for independent contractors.
“As the front door of the NHS, they need your support to protect them from significant increases in overheads following the UK government’s recent budget,” it said.
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“Public sector relief from NICs is being offered to insulate secondary care,” the letter said, calling for “equivalent” relief to be provided for pharmacies in Scotland.
“Failure to do so will have real consequences for the communities we serve,” it added.
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Reeves delivered the government’s first budget last month (October 30), announcing that employer NICs will rise by 1.2 percentage points to 15% from April 2025.
The national living wage is also set to rise by 6.7% to £12.21 an hour in April, while the national minimum wage for 18-20 year-olds will increase by 16.3% to £10 an hour.
And the employment allowance – which supports small businesses with their employment costs – will increase from £5,000 to £10,5000.
