Rachel Reeves has been blamed for the demise of Claire’s amid more grim news from the high street.
Fingers have been pointed at the Chancellor’s policies after Modella Capital announced that the chain and the Original Factory Shop are being put into administration.
The firm cited ‘highly adverse government fiscal policies’ as well as high inflation and weak consumer confidence for the move – which leaves around 2,500 UK jobs at risk.
Ms Reeves is also facing a backlash for blocking a business rates bailout for pubs, despite Keir Starmer hinting at another climbdown.
The huge employer national insurance raid in the 2024 Budget and a host of other tax hikes are seen as having crushed economic activity and recruitment.
A spokesman for Modella Capital said: ‘Very sadly, we have had to initiate insolvency proceedings for The Original Factory Shop (TOFS) and Claire’s Accessories UK & Ireland.
Rachel Reeves has been blamed for the demise of Claire’s amid more grim news from the high street
Fingers have been pointed at the Chancellor’s policies after Modella Capital announced that the chain and the Original Factory Shop are being put into administration
‘This has been a very tough decision. We have worked intensively in an effort to save both businesses, having made last-ditch attempts to rescue them, but neither has a realistic possibility of trading profitably again.
‘In these circumstances, administration is the only option. In both cases, the legacy effects of trading prior to our ownership left them highly vulnerable.
‘The climate on the high street remains extremely challenging and TOFS and Claire’s are not alone in experiencing difficulties.
‘This is borne out by recent Sensormatic statistics and other data sources suggesting an alarming drop-off in pre-Christmas footfall.
‘A combination of very weak consumer confidence, highly adverse government fiscal policies and continued cost inflation is causing many established and much-loved businesses to suffer badly.
‘It’s a simple fact that if retailers can’t make money, they risk having to close – and jobs across the country are lost.’
Business rates – a tax charged on commercial properties which is recalculated every three years – will see many pubs forced to pay eye-watering bills from April.
Pubs were offered temporary relief from paying full business rates during Covid, but the Chancellor’s decision to scrap the discount in the Autumn Budget has now left many landlords contemplating closure.
Trade body UK Hospitality has warned that business rates for an average pub will increase by 76 per cent.
Sir Keir said yesterday that the government was ‘talking to’ the hospitality sector about ‘further support’ it could be given as high business rates threaten pubs with extinction.
‘We’re talking to the sector, particularly hospitality and pubs, about what further support we can put in, whether that’s licencing freedoms or other measures,’ Sir Keir said.
‘We want to talk to the sector. I want to keep working with them to make sure we can work this through.’
He added the government is ‘very open’ to the discussion of pubs having more freedom to be ‘open for longer’.
However, the Treasury is believed to have ruled out further business rates relief for the sector, suggesting the existing transition support is enough.
More than 1,000 pubs joined a campaign to bar Labour MPs from their pubs in protest at the government’s actions.
The Rock Inn in Bramley and the New George in Kirkstall, pubs in or nearby Ms Reeves’ Pudsey constituency, said they would refuse entry to the Chancellor if she tried to visit over the Christmas holidays.
But the manager of The Rock told the Daily Mail he would maintain the ban on Labour MPs despite the government looking at changing licensing rules.
Keir Starmer’s (pictured) MPs have been barred from many pubs in protest at business rates increases
‘Unbar? I don’t think so,’ said Terry Weston, manager of the New George. He added that Starmer’s plans ‘won’t be doing me any favours’ and the government should reduce business rates instead.
An employee from the Rock Inn added that opening later would ‘not make any difference at all’.
‘People can’t afford to come out with all the bills they have to pay and rising costs – it’s ridiculous.
‘When it comes to April and the minimum wage goes up, there’s going to be loads of pubs closing. They’re just killing us off. They don’t want people in pubs; they don’t want people talking to each other saying how bad things are.’