A typical convenience store could see its rates bill rise by "more than triple" at a time when the cost of employment and energy is also rising significantly, the shadow chancellor has said.
According to Sir Mel Stride, high street convenience shops will bear the brunt of Rachel Reeves’s business rate increases in April, facing an average rise of £1,600 over the next two years.
“Independent retailers are facing three years of major hikes in their business rates bills after the Government failed to take decisive action on support for local shops in last November’s Budget,” he told the Telegraph.
“A typical convenience store could see its rates bill more than triple between now and 2028, coming at a time when the cost of employment and energy is also rising significantly.
“The cost-increases facing retailers in April will reduce ability to invest, and that could have an inflationary impact unless the Government acts to permanently lower rates bills,” he added.
Under the change, which comes into force on April 1, Ms Reeves will abolish Covid-era reliefs for retail. At the same time, high street businesses have had their properties revalued.
It will net the Chancellor an extra ÂŁ8.4bn a year by the end of the decade, but is also projected to push up inflation and increase the cost of living.
Analysis of official figures compiled by the Tories has found that the raid will add ÂŁ1,600 to the tax bill of a typical small shop over the next two years.
A store that pays ÂŁ5,269 in business rates faces a bill of ÂŁ6,069 next year and then ÂŁ6,869 the year after, a rise of 30 per cent.
By the end of 2028-2029, its annual business rates will have reached an estimated ÂŁ7,880.
Most shops have already seen their bills more than double this year compared with 2025, after Ms Reeves scaled back reliefs in her first 2024 Budget.
The rate rise comes on top of extra costs imposed by Ms Reeves that will make it more expensive for businesses to hire people, including increases to National Insurance and the minimum wage.
Sir Mel Stride, the shadow chancellor, warned the tax raid will not just hurt businesses but “hit every household at the checkout”.
“By hammering shops, supermarkets and their suppliers, Rachel Reeves risks driving up the cost of the weekly shop,” he said. “Families will be left paying the price for the Chancellor’s reckless choices.”
The Institute of Grocery Distribution (IGD) has predicted Ms Reeves’s policies combined will add 1.3 per cent to food inflation in 2026.
That is the equivalent of an £80 increase in the average household’s annual food bill, which now comes to an estimated £6,000 a year.
James Walton, chief economist at the IGD, said shops would have to pass as much as 80 per cent of the new costs on to shoppers.
He said: “The margins within food and drink are extremely thin. The bulk of any new costs associated with government activity will have to be passed on to the consumer.”
IGD’s analysis found the business rates raid alone will add 0.3 per cent to food inflation.
A Treasury spokesman said: “We’re reforming business rates and backing the high street, with around one in three properties continuing to pay no rates at all and over 750,000 retail, hospitality and leisure properties benefiting from permanently lower multipliers.
“With our £4.3bn support package to limit bill rises, we’re cutting the business rates multipliers by 5p for high street businesses, funded by higher multipliers for the top 1 per cent most expensive properties – meaning many big online warehouses will pay a 33 per cent higher multiplier than small high street premises.”