How labour is wrecking the high street: 13,000 shops closed in a year
The British high street has endured another devastating blow, with over 13,000 shops closing their doors permanently in 2024—a staggering 28% increase from the previous year. Experts warn that worse is yet to come, with projections of 17,350 store closures in 2025, raising questions about Labour’s handling of the economy.
Record closures in 2024
According to the centre for retail research (CRR), the 2024 closures marked the highest number recorded since data collection began in 2015. Independent retailers bore the brunt, with 11,341 closures—an alarming 45.5% increase compared to 2023. This trend highlights the vulnerabilities of smaller businesses, which often operate on razor-thin profit margins.
The grim outlook for 2025 surpasses the challenges seen in 2022 when 17,151 shops shut following the withdrawal of pandemic-related government support. The figure is also set to eclipse the 16,145 closures during the peak of lockdown in 2020.
The impact of labour’s policies
Labour’s economic policies, particularly those spearheaded by Chancellor Rachel Reeves, have come under intense scrutiny. Planned hikes in National Insurance contributions and an inflation-busting increase in the National Living Wage are set to take effect in April 2025, further straining retailers already grappling with soaring costs.
Additionally, the controversial business rates system, which taxes commercial properties based on rental value, continues to place physical shops at a disadvantage compared to online giants like Amazon. Despite pleas from retailers to reform this system, little has been done to alleviate the financial burden.
Andrew Goodacre, CEO of the British Independent Retailers Association, warned, “The planned increases in National Insurance, minimum wage, and business rates will leave many independent retailers with no choice but to shut up shop.”
Industry leaders voice concerns
Retailers have repeatedly called for urgent reforms to Labour’s tax and economic strategies. In November, more than 80 industry leaders, including executives from Marks & Spencer, Tesco, and John Lewis, signed an open letter to Chancellor Reeves. They cautioned that her Budget would force businesses to hike prices, cut jobs, and close stores.
Helen Dickinson, Chief Executive of the British Retail Consortium, noted, “2025 looks to be a challenging year for the retail industry. With £7 billion in new costs introduced by the Budget, many firms will have no choice but to raise prices or shut their doors.”
Business rates relief: A missed opportunity
Retailers had urged Labour to extend pandemic-era relief schemes that slashed business rates bills by 75%. Instead, relief for hospitality and retail businesses was reduced to 40%, with the average shop’s bill projected to rise from £3,589 to £8,613 in the 2025-2026 tax year.
Alex Probyn, president of commercial property firm Altus Group, called Labour’s decision to scale back relief “foolhardy,” warning that it would disproportionately harm small retailers.
Consumer confidence at an all-time low
The cost-of-living crisis, compounded by labour’s policies, has eroded consumer confidence. Shoppers are tightening their belts, further reducing footfall on the high street. Insolvency experts at Begbies Traynor reported a sharp rise in the number of UK retailers in “critical financial distress” during the final quarter of 2024.
A grim future for independent retailers
Professor Joshua Bamfield, director of the CRR, emphasised that the future looks bleak for independent retailers, which are expected to account for 14,660 of the 17,350 predicted closures in 2025. These businesses, already struggling to stay afloat, may not survive the Treasury’s tax increases and minimum wage hikes.
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Shadow Business Secretary Andrew Griffith accused Labour of ignoring the needs of businesses and wealth creators. “The triple whammy of trash-talking confidence, the ‘jobs tax’ NI hike, and increased business rates shows Labour just don’t understand business,” he said.
Calls for action
Retailers and business leaders are united in their call for immediate reforms to prevent British high streets from becoming ghost towns. As Helen Dickinson put it, “Labour must urgently rethink its policies to ensure the survival of the retail industry and the livelihoods it supports.”
With the high street at a tipping point, the coming year will be a litmus test for Labour’s ability to navigate the economic challenges facing the nation. Without significant intervention, the future of Britain’s beloved high streets hangs in the balance.
