Chancellor Rachel Reeves is facing direct blame for the demise of major retail chains Claire's Accessories and The Original Factory Shop, as the UK's high street crisis delivers another devastating blow.
Retail Giants Fall Amid 'Adverse' Government Policies
Owner Modella Capital has confirmed it is placing both Claire's Accessories UK & Ireland and The Original Factory Shop (TOFS) into administration. The firm pointed a finger at 'highly adverse government fiscal policies', combined with high inflation and weak consumer confidence, for the collapse.
This move puts approximately 2,500 UK jobs at immediate risk. A spokesman for Modella Capital stated the decision was 'very tough' and followed intensive, last-ditch efforts to save the businesses. He confirmed that neither retailer had a 'realistic possibility of trading profitably again' in the current climate.
'The climate on the high street remains extremely challenging,' the spokesman said, citing recent data showing an 'alarming drop-off in pre-Christmas footfall'. He concluded starkly: 'It's a simple fact that if retailers can't make money, they risk having to close – and jobs across the country are lost.'
Pubs Join the Fray in Business Rates Rebellion
The Chancellor is simultaneously confronting a fierce backlash from the hospitality sector for blocking a business rates bailout for pubs. This comes despite Prime Minister Sir Keir Starmer hinting at a potential climbdown, saying the government was 'talking to' the sector about 'further support'.
Business rates, a tax on commercial properties, are set for a major recalculation in April. Trade body UK Hospitality warns that rates for an average pub could surge by 76 per cent. The scrapping of a Covid-era discount in the Autumn Budget has left many landlords contemplating closure.
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 herself over Christmas.
License Changes Dismissed as 'Not Enough'
While Sir Keir mentioned being 'very open' to discussing licensing freedoms, such as allowing pubs to 'open for longer', publicans have dismissed this as inadequate. Terry Weston, manager of the New George, said such plans 'won't be doing me any favours' and demanded a reduction in business rates instead.
An employee from The Rock Inn was equally dismissive, stating that opening later would 'not make any difference at all'. They blamed the cost-of-living crisis, saying: 'People can't afford to come out with all the bills they have to pay and rising costs – it's ridiculous.' They warned of a wave of closures when the minimum wage rises in April, accusing the government: 'They're just killing us off.'
The Treasury is believed to have ruled out further business rates relief, suggesting existing transition support is sufficient. This stance leaves the high street and hospitality sectors braced for further pain, with the fallout from the 2024 Budget's tax hikes continuing to ripple through the economy.
