It has been a week since the Budget announcement which was hailed as a means to kick-start the retail sector, but businesses could face a cliff edge when all support is withdrawn at a time when they should be gearing the businesses up for the Christmas trading period.
The Chancellor extended furlough and business rates relief until that time, but even then many won’t have been trading long enough and they won’t be strong enough to stand the sudden increase in costs. As a result, many could just go under.
Clients based in the West End of London and focused on the luxury market fear that withdrawing the support measures in one go will just leave them high and dry.
Businesses based in Central London are dependent upon tourists and office workers. There is no indication that those people will making their way back until after restrictions are lifted in June and it will be the same throughout the country.
There is also disappointment that there was no mention of business rates reform. Although the Budget extended rates relief for retail businesses until the end of September, business rates is a huge burden on retailers especially in prime areas and gives online retailers an unfair competitive advantage.
One of our luxury clients, Luke Irwin Rugs Limited, considers that reintroducing business rates so soon will be the death knell of the High Street when so many businesses have been on hold for nine of the last 12 months.
The Budget was not able to address the fundamental issue facing our clients which is the ability to open and to stay open and the Chancellor should urgently look at a way of extending the support until after the Christmas period. Perhaps on the basis that firms could pay money back to the Government after that period and that rates relief could be extended and also reformed.