Wednesday 30 June 2021 / 10:30 PM Bridget Phillipson / Business

New figures show over 400,000 businesses in England to be hit by end of support measures on 1st July – despite many being unable to open

Labour have today released new figures showing 375,000 businesses will be hit by changes in business rate relief on 1 July.

In addition, from 1 July, all businesses – including in sectors hardest hit by continuing restrictions – will be forced to contribute 10% towards the cost of furloughing employees. An estimated 450,000 will be affected by this change.

Despite the government’s own border chaos leading to a spread of the Delta variant and delaying the roadmap till 19 July, Ministers have refused to push back the date for ending this business support in tandem, meaning businesses forced to pay will include those still legally closed or operating at a significantly reduced capacity.

The figures commissioned by Labour to the House of Commons Library show:

  • Just under 400,000 businesses in England will be affected by the cut in business rates relief for retail, hospitality and leisure businesses from 1 July: Local Authorities have estimated that 374,172 will be claiming the relief in July
  • Affected businesses will lose business rates relief at an average of around £1,200 per business
  • Approximately 30% of affected businesses are hospitality and leisure properties, 60% are shops and 10% are other types including accommodation.
  • This suggests that 225,000 shops, 112,000 hospitality and leisure businesses and 37,000 other businesses will be affected.
  • 450,000 businesses will have to pay £225 million more as a result of the reduction in furlough generosity.

Labour has called on the Government to:

  • Delay the increased employer contribution to furlough, given that most of people remaining on furlough are employed in the sectors affected by the ongoing restrictions – hospitality, live events, accommodation and tourism.
  • On business rates relief, learn lessons from the Labour-led Welsh government, which has given the vast majority of businesses 100% business rate relief for the course of this financial year. In contrast, the Conservative government is sending out bills to businesses that cannot fully open.

Shadow Chief Secretary to the Treasury, Bridget Phillipson MP said:

“The government’s reckless and negligent approach to border controls is being paid for by British businesses now.

“A month’s delay may seem like a short time, but for businesses in retail, hospitality and leisure, legally closed from trading or relying on the summer season the delay is another blow.

“We want to see businesses make it through and thrive because they are an important part of what makes our country great, and essential for driving our recovery.

“The government must make sure economic measures go hand in hand with public health measures and that our British businesses and high streets are not left out in the cold.”