UK (Parliament Politics Magazine) – Chancellor Rachel Reeves says the UK economy is “stuck” as the Treasury reviews business rates to ease cliff edges and support small businesses.
As reported by The Standard, Chancellor Rachel Reeves warns Britain’s economy feels “stuck” and signals reforms to business rates, tackling cliff edges for small firms.
What did Rachel Reeves say about the UK economy and small business reforms?
Rachel Reeves stated,
“Our economy isn’t broken, but it does feel stuck. That’s why growth is our number one mission. We want to see thriving high streets and small businesses investing in their future, not held back by outdated rules or strangled by red tape.”
She added,
“Tax reforms such as tackling cliff-edges in business rates and making reliefs fairer are vital to driving growth. We want to help small businesses expand to new premises and building an economy that works for, and rewards working people.”
Treasury plans to change business rates
The Treasury is examining changes to British business rates, aiming to reduce red tape and boost economic growth. Its initial report on business rates signals that small business relief rules “can discourage” investment, with reforms under consideration.
Under current rules, acquiring a second property strips firms of small business rates relief unless specific conditions are met. This move is part of the government’s ongoing promise to broaden its review of business rates, responding to pressure from companies and industry calls for major reform.
High street giants, including John Lewis, met Rachel Reeves last week, pressing for changes to current business rates regulations.
Earlier this year, business rates for hospitality, retail, and leisure firms rose after the April cut discounts from 75% to 40%.
Ministers plan to review business rates to improve them after the merger of the Valuation Office Agency with HMRC. The government is reviewing how business rates are calculated to minimise cliff edges and boost relief for property investors.
Kate Nicholls’ views on the government’s business rates reforms
Kate Nicholls, chairwoman of UKHospitality, stated,
“For too long, the broken business rates system has unfairly punished hospitality businesses and I’m pleased that the Government is taking action to reform it.”
She added,
“These measures to remove punitive cliff edges and barriers to investment are positive and will help to rebalance the system, as will the Government’s commitment to lower business rates bills for hospitality businesses.”
What did Helen Dickinson say about the impact of business rates on retail and local investment?
Helen Dickinson, chief of the British Retail Consortium, called business rates outdated, complex, and harmful, supporting proposed government reforms.
She stated,
“But for retail businesses, the most pressing question is how the Government’s plan for a permanent business rates reduction for retail, hospitality and leisure premises will be implemented.”
Ms Dickinson added,
“Currently, retailers account for 5% of the economy yet pay over 20% of the total business rates bill, which is why such reforms are desperately needed. Until we get clarity on these changes, which isn’t expected until the Budget, many local investments in jobs and stores are being held back.”
What did business leaders say about Rachel Reeves’ tax pledge?
Business leaders called on Rachel Reeves not to increase taxes for working people ahead of the upcoming budget.
On 26 November, Ms Reeves will announce tax rises, though Labour’s manifesto pledge restricts changes for working citizens as growth stalls.
The Confederation of British Industry’s head, Rain Newton-Smith, warned that the chancellor cannot tap corporate funds again.
She said,
“The fact is that geopolitics and global markets have shifted. The world is different from when Labour drafted its manifesto, and when the facts change so should the solutions.”
Ms Newton-Smith added,
“The chancellor cannot raid corporate coffers again so she must look elsewhere, embracing long-term strategic tax reforms rather than maintaining a slavish adherence to manifesto promises on tax or ideas based on the world as it was 18 months ago.”
Key facts about the UK’s upcoming budget
On November 26, 2025, the UK budget will be released, highlighting a £41–50 billion shortfall with debt servicing costs over £100 billion annually. Key tax reforms will include changes to IHT and CGT, a property tax overhaul, and reduced pension tax relief.
Economic priorities will focus on infrastructure investment, planning reform, and fiscal rule compliance. Business impacts will cover business rate adjustments, lowering the VAT threshold, and NI expansion to landlords and partnerships.