Rachel Reeves tells small business owner: ‘We are trying to help’

Chancellor Rachel Reeves told a shop owner the Government was “trying to help” as she visited independent retailers ahead of Small Business Saturday.

Ms Reeves toured the Leeds Corn Exchange on Friday where Deborah Bellamy, owner of Hidden Wardrobe, told her that businesses had found it “very tough” in recent years with rising costs and minimum wage increases, and had to let some staff go.

The Chancellor said: “I know it’s tough and there are a lot of costs but we are trying to help.”

She told Ms Bellamy: “I’m not sure if you’ve looked at the national insurance changes that we made in the Budget but we’ve increased the employment allowance to £10,500. So you should look to see what happens to your business because… if your national insurance bill is less than £10,500, you won’t pay any national insurance.

“We’ve tried to design it in a way that supports the smallest businesses.”

The Government has said some 865,000 employers will not pay any NI next year because of the employment allowance rising from £5,000 to £10,500.

There are 1.4 million private sector businesses in the UK that employ staff.

The Chancellor later told reporters her message to small businesses was to “look at some of the detail in the Budget”.

Ms Reeves said: “The smallest businesses will be paying less or no national insurance because of the changes I announced.

“I met one small business today who employs three people, and she didn’t know about those changes, but they mean for her business that she’s next year unlikely to pay any national insurance at all whereas this year she is paying national insurance.

“So the smallest businesses will benefit from those changes in the Budget because we recognise the importance of small businesses and their needs.”

She added: “In addition to those changes around national insurance, I’m also making changes to business rates.

“Under the plans that I inherited as the Chancellor in July, we would have seen a business rates relief for retail hospitality and leisure businesses disappear entirely from next April.

“I didn’t want that to happen, so we have been able to extend business rates really for a further year, and we’ve also made a commitment in the Budget to reform business rates to have permanent lower rates for smaller retail, hospitality and leisure businesses.

“That’s so important because I do recognise over the last few years, the Covid pandemic, the cost-of-living crisis, that there are challenges that are unique to smaller businesses, particularly in those sectors.”

During the visit, Ms Reeves also visited gift shop Attic In Bloom, where she bought an ornament for her desk at 11 Downing Street.

A growth service will be launched next year to help small and medium-sized businesses find Government support and advice under one roof, Business Secretary Jonathan Reynolds said.

The UK-wide business support system will include a “revamped web offer” and launch in the first half of 2025 with the aim of saving small businesses time and money, the Department for Business and Trade said.

The Liberal Democrats urged Labour to take the opportunity of Small Business Saturday to scrap the changes to national insurance.

“On a day to celebrate small businesses, they should take this opportunity to scrap this tax hike and focus instead on supporting our high streets, not continuing to saddle them with more burdens,” Lib Dem Treasury spokesperson Daisy Cooper said.