Retail chiefs urge Chancellor Reeves to soften business rates reforms, warn of High Street damage

Chancellor Rachel Reeves was pressed by leaders of Britain’s biggest retail chains on Wednesday to mitigate planned business rates reforms, with one retail executive describing her as “the face of doom” and industry figures warning the proposals could pile further pain on the High Street.

Around ten chief executives and senior retail figures held a meeting at Number 11 Downing Street to set out concerns that Labour’s proposed changes to business rates — intended to rebalance taxation between bricks-and-mortar shops and online rivals — risk hitting large town-centre stores that act as anchors for local shopping districts.

Industry chiefs at the meeting included John Lewis chairman Jason Tarry, Kingfisher chief executive Graham Bell, who oversees B&Q, and British Retail Consortium chief executive Helen Dickinson. Retailers told the Chancellor that reforms which increase taxes on larger premises — meant to capture warehouses used by online vendors — would also fall on large high-street stores and could reduce footfall for other businesses nearby.

Retailers say the reforms could push roughly 4,000 shops into higher business rates categories, a shift they say would add to rising operating costs across the sector. The industry delegation argued the impact would be felt most acutely by so-called anchor stores that draw shoppers to town centres.

"The industry was clear that its number one concern was the impact these changes could have on town centres and the businesses that rely on anchor stores to draw shoppers," Dickinson said after the meeting.

Retail executives said they delivered evidence and scenarios showing how aggregated floor space and new valuation approaches under the proposed system would translate into material uplifts for many city-centre and suburban retailers. Some attendees used stark language to convey alarm about the cumulative effect of higher property taxes alongside other cost pressures facing the sector.

Labour has framed the reforms as a way to level the tax playing field between physical stores and online sellers by shifting some of the tax burden toward larger premises, including distribution centres and warehouses that serve internet retailers. Party officials have said the changes are intended to modernise a system critics say has not kept pace with changes in retailing.

Retail trade bodies and company executives counter that the proposals, as currently drafted, do not sufficiently protect anchor stores and could harm town centres by reducing the ability of retailers to offer a wide range of goods and services that attract customers.

The meeting at Number 11 represents the latest round of talks between government and business over the future of business rates, a recurring flashpoint for retailers. Business rates are a significant cost for many brick-and-mortar operators and have been the focus of repeated lobbying for reform or relief, particularly since the pandemic and the rapid expansion of online shopping.

Industry groups have called for targeted protections or phased implementation to avoid sudden increases in bills for established high-street stores. The retail representatives also sought clarity on valuation methodology and timing, saying firms need certainty to plan investment and property strategy.

Downing Street did not immediately provide a detailed response to the substance of the meeting. A spokesperson for the Chancellor said discussions with businesses were part of ongoing engagement on tax and economic policy.

The talks add to broader policy questions about how best to support local economies and preserve town-centre vitality while ensuring an equitable tax framework across different retail models. Any legislative changes to business rates will require further consultation and parliamentary scrutiny before becoming law.