High Streets on Brink of Collapse
The recent tax hike on employers’ National Insurance contributions is set to have devastating consequences for Britain’s high streets. Retail and hospitality chiefs are warning that they will be forced to reduce opening hours, cut staff, and even shut down entirely in response to the increased costs.
Ghost Towns Ahead
Luke Johnson, chairman of bakery chain Gail’s, believes that the tax increase will only accelerate the decline of town and city centers. The Night Time Industries Association (NTIA) is predicting that four in 10 of its members will be at risk of closure within six months. Michael Kill, the industry group’s chief executive, warns that the autumn Budget has effectively signed a death sentence for many night-time economy businesses across the UK.
Reduced Hours and Closures
Andrew Goodacre, chief executive of the British Independent Retailers Association, says that his members will be forced to reduce staff hours, cut employee numbers, and limit trading hours. This will ultimately lead to a decline in high street vitality. The Chancellor’s decision to raise the cost of doing business will disproportionately affect retailers and hospitality companies, which employ large numbers of people on low wages.
Employment Costs Soar
UKHospitality estimates that the sector will face an additional £3.4bn in employment costs as a result of the Chancellor’s policies. Industry leaders are warning that many companies will be forced to slash investment plans, consider price rises, job cuts, or closures. Kate Nicholls, chief executive of UKHospitality, says that the Budget is causing venues to consider cutting their opening hours or closing on more days to manage rising staffing costs.
Consequences for Local Communities
The impact of these closures will be felt across local communities, where high streets are often the lifeblood of social and economic activity. Clive Black, an analyst at Shore Capital, warns that the extra costs will undoubtedly be a blow to high streets and shopping centers. Billions of pounds have been wiped off the value of shares of high street employers since the Budget, amid concerns over the looming cost increases.
Urgent Support Needed
The NTIA is calling for urgent support to prevent the closure of 40% of businesses in the night-time economy within the next six months. The group represents bars, pubs, and clubs with late opening hours, which are in severe jeopardy following the Budget. Without swift action, the consequences for high streets and local communities will be severe.
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