High Street businesses speak of Budget pressures

Businesses on a Hertfordshire High Street tell the BBC they are struggling to cope, with extra costs from the chancellor's October Budget coming into force in days. The government says its "once-in-a-Parliament" Budget allowed it to wipe the slate clean and focus on new business opportunities, so what are the concerns and how is the High Street adapting to more change?

Last year's Budget saw employers bear the brunt of £40bn in tax rises - the biggest increase in a generation.

Just days from the changes taking effect, retail and hospitality firms in the market town of Hitchin say they are facing thousands of pounds in rising costs.

Some of the key changes that are increasing costs for small businesses from this April include:

• Companies to pay National Insurance (NI) at 15% on salaries above £5,000 from April, up from 13.8% on salaries above £9,100
• The legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour
• The rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a "single adult rate"
• 75% relief on business rates, put in place during the pandemic, being reduced to 40%.

To offset the rises, the government announced an increase to businesses' employment allowance, which allows smaller companies to reduce their NI liability.

One of the stalwarts of Hitchin's High Street is Gatwards, which is the oldest family jeweller in the UK.

It has been in business for 265 years, but Charlotte McCrossin, the current manager and eighth generation of the family to run it, believes times are now as tough as they have ever been.

"Footfall is down much worse actually since the Budget because there is no confidence now - consumers are worried," she says.

On the Budget changes, she adds: "I don't know where we're supposed to find all this money.

"We got the business rates bill for the year - that's gone up by seven-and-a-half thousand pounds.

"There's the higher National Insurance. It's not so much the NI going up, it's more the slashing of the thresholds, so it's going to bring more people into NI."

Hospitality businesses are also under pressure.

Tom Weller co-owns a gastro pub and a cafe in the town. He employs 35 people.

"We've already seen, with the national minimum wage increases from last year, a £40,000 uplift in our payroll costs - we're expecting to see a similar amount this year," he says.

Tom says he has no choice but to pass these higher costs on to his customers in the form of price rises.

"We've put prices up by approximately 5% already last year and we're planning a 5-10% increase this year as well.

"There's literally nothing else we can do. If we didn't do it, we'd just be losing money every month and then eventually we'd have to close."

Up and down the UK, the state of many town and city centres is a cause for concern.

About 27,000 shops closed in 2023, according to the British Independent Retailers Association, of which 7,800 were independently owned.

The Federation of Small Businesses says it is a time of uncertainty for many small firms.

Suzanna Austin, who represents Bedfordshire, Cambridgeshire and Hertfordshire, says: "It has made people put off hiring new people, they're not growing, they're embracing technology rather than taking on potentially new staff, or they're retraining or changing perhaps their opening hours so they can cut costs in other ways."

It is something Hitchin's town centre manager Tom Hardy fears.

"I do see that our High Street - or the majority of it - could disappear over the next five to 10 years," he says.

He believes more support is needed.

"If we don't put things in place to make it worth a business's while having a bricks and mortar shop, they'll all go online and we'll have ghost towns."

It is a sentiment echoed by the British Retail Consortium.

Director of insight, Kris Hamer, says: "High Streets have struggled with many headwinds in recent years. The government needs to do more to recognise the economic and social value thriving High Streets bring to communities."

A spokesperson from the Treasury, says: "We are a pro-business government determined to improve the total business environment, and have already achieved a great deal in a short period of time.

"This includes protecting the smallest businesses from the employer National Insurance rise and late payments, and capping corporation tax.

"We delivered a once-in-a-Parliament Budget to wipe the slate clean and without our action, business rates relief for retail, hospitality and leisure would have ended completely in April this year."

Follow Beds, Herts and Bucks news on BBC Sounds, Facebook, Instagram and X.