Many small businesses are now operating under pressures comparable to those experienced during the covid pandemic but this time without an emergency support framework in place, according to a report by the House of Commons Business and Trade Committee.
The Labour MP Liam Byrne, chair of the committee, said: “SMEs are facing late payments, rising energy costs, increasing crime, a complex tax system and barriers to growth that are compounding rather than easing. These pressures are not isolated; together they pose a real risk to business viability, high streets and economic growth. High streets do not die by accident. If the Government is serious about growth, it must set out a more coherent and ambitious plan for the businesses that make up so much of the UK economy.”
Costs
The MPs reported that ‘small businesses have told us they are subject to rising shop theft, anti-social behaviour, and assaults or threats against their employees’, ‘creating significant economic and human costs’. The MPs suggested that the true scale of the problem is much greater than official figures suggest; ‘illegal trading on the high street is growing and driving consumers away from town centres. Lack of confidence in the police’s response is also leading to underreporting of these offences’. The MPs’ inquiry last year found that small retailers on the high street were facing chargeback scams also known as ‘friendly fraud’, whereby customers tell their credit card companies that they have not made a purchase on their statement to avoid being charged; and get refunded.
Recommendations
Among its recommendations, the report called on UK Government to ‘commit to funding more financial investigators in local Trading Standards services and police forces’; and to ‘amend the business rates regime so that security prevention measures, such as CCTV, do not count towards a property’s rateable value’. Some witnesses complained that premises on the high street were ‘criminal enterprises being used for money laundering’ besides sale of illegal goods, and immigration offences. The MPs concluded that ‘too often successful enforcement activity disrupts rather than stops illegal trading on the high street’.
The MPs heard evidence from Sal Melki, Deputy Director, Illicit Finance, National Crime Agency; and City of London Police Supt Lisa Maslen, head of the police’s National Business Crime Centre; and Association of Convenience Stores (ACS) chief executive James Lowman.
Comment
Lowman said: “This influential group of MPs have backed ACS’ long-standing campaign for CCTV and security to be excluded from business rates calculations. At a time when business rates bills are set to rise significantly for thousands of independent retailers, we welcome these common sense measures that would relieve some of the cost burden for local shops and avoid deterring investment in crime prevention.
“We can’t have thriving high streets and vibrant small businesses without tackling the unacceptable levels of crime that makes those places feel unsafe. Consumers, residents and businesses want safe places to shop, work and invest.”
You can view the 95-page report at https://committees.parliament.uk/committee/365/business-and-trade-committee/publications/.
Photo by Mark Rowe.
