Peers slam High Street tax raid: House of Lords votes to spare stalwarts like M&S from increased charges

Rachel Reeves has been warned that Britain’s high streets could be ravaged as flagship stores look to escape her soaring taxes.

In a House of Lords debate yesterday on the Chancellor of the Exchequer’s business rates reforms that will hammer the biggest stores, peers heard that the demise of town and city centres posed a threat to ‘social cohesion’.

‘If the Government continues to increase costs on businesses in the same way as they have begun, there will not be any businesses left on our high streets to tax,’ Baroness Scott of Bybrook told Parliament.

The comments came as peers voted by 283 to 177 to back her amendment to exempt ‘anchor’ stores such as Marks & Spencer and John Lewis from higher rates.

Industry experts welcomed the vote – but expectations of any meaningful change are low.

Retailers face a ‘perfect storm’ of higher costs from next month as employer National Insurance contributions and the minimum wage rise, alongside business rates.

Taxing times: The House of Lords was told how Chancellor Rachel Reeves’s ’s business rates reforms will hammer the biggest stores

The issue has been highlighted by the Mail, which has launched a Save Our High Streets Campaign.

The Chancellor has promised to reform business rates – a tax that is based on the value of a property – but the changes so far will mean major retailers paying a higher levy on their biggest stores.

Experts believe this could force them to move to out-of-town locations. It is feared there would be a knock-on effect on smaller shops, which benefit from the number of shoppers who visit the big stores.

Worrying figures yesterday revealed 249,000 retail jobs have been lost in the past five years.

And British Retail Consortium (BRC) boss Helen Dickinson has warned that ‘worse could be yet to come’ after the professional services firm PwC forecast an acceleration in closures on the High Street.

The Government has promised to ‘level the playing field between the High Street and online giants’ by putting up rates for larger premises.

It is intended to target giant warehouses used by the likes of Amazon but also means bills will increase for 4,000 shops.

In the Lords, Baroness Scott said that higher business rates ‘could end up being the straw that breaks the camel’s back’ as stores face a barrage of tax hikes.

‘If the anchor stores move away, they will not be able to sustain themselves,’ she said.

Lord Thurlow also warned that without a ‘golden goose’, many local communities would suffer. ‘The damage to society locally in losing them will be difficult to restore, and social cohesion will suffer,’ he said.

The Chancellor has delayed the introduction of a new business rates system until 2026 at the earliest.

Shops should not have to pay more under the reforms, according to Marks & Spencer, Tesco, Sainsbury’s, B&Q owner Kingfisher, Morrisons, Primark and Asda. Tom Ironside, director of business and regulation at the BRC, said: ‘The House of Lords has clearly seen the risk of raising business rates on large retail stores, which provide vital services for customers and drive footfall which supports surrounding businesses.

‘The Government needs to go further and ensure no shop pays more as a result of the reforms.’