Chancellor Rachel Reeves is facing direct blame for the collapse of two major high street retailers, Claire's Accessories and The Original Factory Shop, in a fresh blow to the UK's struggling retail sector.
Administration Blamed on Government Policy
The owner of both chains, Modella Capital, announced it had been forced to place the businesses into administration, putting approximately 2,500 UK jobs at risk. In a stark statement, the firm pointed the finger at 'highly adverse government fiscal policies', alongside high inflation and severely weak consumer confidence, as the primary reasons for the failure.
A spokesman for Modella Capital stated the decision was 'very tough' and followed intensive, last-ditch efforts to save the companies. 'Neither has a realistic possibility of trading profitably again,' they said, highlighting the 'extremely challenging' climate on the high street. They cited recent Sensormatic data showing an alarming drop in pre-Christmas footfall as evidence of the wider crisis.
Pub Sector Rebellion Over Business Rates
The Chancellor is simultaneously confronting a furious backlash from the pub and hospitality sector for blocking a business rates bailout. Despite hints from Prime Minister Keir Starmer about potential 'further support', the Treasury is believed to have ruled out additional relief.
Business rates, the tax on commercial properties, are set to be recalculated in April. Trade body UK Hospitality warns the average pub will face a 76 per cent increase in its bill. This follows the Chancellor's decision to scrap the Covid-era discount in the Autumn Budget.
In protest, more than 1,000 pubs have joined a campaign to bar Labour MPs from their establishments. Two pubs in or near Ms Reeves' Pudsey constituency – The Rock Inn in Bramley and the New George in Kirkstall – said they would refuse entry to the Chancellor over Christmas.
Pubs Dismiss Licensing Concessions
While Sir Keir suggested the government was 'very open' to discussing licensing freedoms, such as allowing pubs to 'open for longer', landlords dismissed the idea as missing the point. 'Unbar? I don't think so,' said Terry Weston, manager of the New George, adding that the plans 'won't be doing me any favours'.
An employee from the Rock Inn stated that opening later would 'not make any difference at all', citing rising living costs that prevent people from going out. 'When it comes to April and the minimum wage goes up, there's going to be loads of pubs closing. They're just killing us off,' they said.
Wider Economic Concerns Mount
The collapse of Claire's and The Original Factory Shop is seen as symptomatic of broader economic pressures. The 2024 Budget's increase in employer National Insurance contributions and other tax hikes are widely viewed as having crushed economic activity and recruitment.
The Modella Capital spokesman summarised the dire situation facing retailers: 'It's a simple fact that if retailers can't make money, they risk having to close – and jobs across the country are lost.' The administration of these two well-known chains signals deepening trouble for the UK's high streets as the new year approaches.
