Liam Byrne, chair of the Business and Trade Committee, said a ‘more coherent and ambitious plan’ is needed to support businesses.
The Government needs a series of major reforms to arrest business closures and decline on the high street – including cutting costs, overhauling business rates and ending late payments, according an influential committee.
A reported by Parliament’s Business and Trade Committee found that small business across the UK are now operating under pressures similar to, and in some cases worse than those experienced during the Covid-19 pandemic.
Liam Byrne, chair of the committee, said a “more coherent and ambitious plan” is needed to support businesses.
The fresh report by the committee found that current pressure are “cumulative, structural and self-reinforcing”.
It added that the level of current pressures mean there is a risk of accelerating business closures and the Government undermining its growth agenda without action.
It highlighted late payments as a specific issue which needs attention, pointing towards evidence from Sage indicating that UK small businesses were owed £112 billion in unpaid invoices by the end of 2024.
Nearly half of all invoices are paid late, even with payment terms of 60 to 90 days now routine in sectors such as construction, it added.
The report also drew attention to a pattern of closures on UK high streets, after the committee heard evidence that business rates, retail crime and energy costs are disproportionately affecting bricks-and-mortar businesses.
Mr Byrne 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.”
A Government spokesperson said: “Small businesses are the lifeblood of our communities and while we know they are facing a difficult time, we are determined to make the UK the best place for them to thrive.
“That’s why we are supporting them with a £4.3 billion support package to cap big business rate bill hikes and by taking action through our Modern Industrial Strategy and Small Business Plan, and we will also publish a new High Streets Strategy later this year to reinvigorate our communities.”
Shadow business secretary Andrew Griffith said: “Today’s report from the Business and Trade Select Committee confirms what high street businesses already know: business rates, retail crime and energy costs are pushing bricks and mortar shops to the brink.
“Labour’s answer is higher taxes and more regulation.”
