Reeves ruins Christmas: Shops suffer disastrous December after Chancellor’s £30billion Budget raid
Rachel Reeves has been accused of ruining Christmas for retailers as her budget draws shoppers away from the high street.
Figures show the Chancellor is keeping a tight grip on the wallets of customers hurt by the £30bn tax raid.
After a surprising decline in Black Friday sales at the end of November, stores say December has been disastrous and the ‘gloomy’ outlook extends into January.
This means there is little festive enthusiasm in what should be the ‘Golden Quarter’ for struggling shops as Christmas approaches.
They are also being battered by Labor policies, facing rising business rates, rising costs following a crackdown on employers’ National Insurance and sharp increases in the minimum wage. They will also have to grapple with an avalanche of new workers’ rights approved by Parliament this week.
Andrew Griffith, the Conservative Party’s business spokesman, said: ‘The gloom and gloom on our high streets is being reflected in pubs, restaurants and even car showrooms as shoppers retreat ahead of coming tax rises.
‘This is a crucial time of year for businesses, but Reeves risked ruining everyone’s Christmas with higher costs and no vision or optimism for the year ahead. It’s like a hangover without a Christmas party beforehand.’
The dark picture unfolds on ‘Super Saturday’, usually the busiest day of the year for stores, when customers rush out to buy last-minute gifts.
Rachel Reeves accused of ruining Christmas for retailers as her budget draws shoppers away from the high street
Chancellor is keeping a tight grip on the wallets of customers hurt by £30bn tax raid, figures show
The Confederation of British Industry (CBI), in its survey of retailers, stated that sales decreased this month compared to last month and described December as ‘weak’.
Sales are expected to fall further in January, making it the weakest month in four years since March 2021 during the pandemic. Even online purchases are down and ‘expected to contract rapidly next month’.
Mr Griffith added: ‘It is worrying that retail sales volumes are falling, but it is hardly surprising given that consumers have been hit so hard by rising taxes. ‘Under Labour, people are being forced to tighten their belts and save money on weekly shopping.’
Consumer expert Kate Hardcastle said: ‘This paints a clear picture. Households act like risk managers, not like shoppers. When trust is eroded, people procrastinate; Instead of buying once, they think twice. The decadence doesn’t end at Christmas. The retail industry expects sales to decline through January, indicating that this is due to uncertainty, not seasonal fads. People will not be able to do this if they feel that there is a possibility that they will regret the product they purchased.
‘December was a month when people ‘locked in’ to joy. Now people ask, “Am I sure?” ‘ the moon he asked.’
Announcing her budget in November, Ms Reeves said she ‘asked ordinary people to pay a little more’ but said the biggest burden would fall on ‘the broadest shoulders’ due to higher taxes on property and savings.
The Office for National Statistics said on Friday that Black Friday deals, which came just two days after the measures were announced, failed to attract shoppers and sales fell an unexpected 0.1 per cent in the month.
Danni Hewson, head of financial analysis at AJ Bell, blamed rumors of potential tax increases as “unnerving consumers at the height of the festive shopping period”, saying customers “remain an abundance of caution”.
Join the discussion
Is it because shoppers and businesses are being taxed in December that Britain’s high streets are in such poor shape?
Announcing her budget in November, Ms Reeves said she ‘asked ordinary people to pay a little more’
Richard Lim of Retail Economics said: The timing of the Budget could not be worse for the retail sector, which relies on sales in the ‘Golden Quarter’ [October to December]. The Wednesday before Black Friday has created a huge sense of anxiety among consumers, especially with all the speculation.
Cost of living remains the biggest challenge for households. Although we have seen inflation decrease in the last four years, we have not seen a decrease in prices and this has reduced people’s discretionary spending.
‘All the leaks that have come before the Budget, testing the response to see what might happen if there is an increase in income tax, have been extremely unhelpful in terms of household confidence.’
Reform UK MP Richard Tice said: ‘Rachel Reeves would be better off giving British businesses a lump of coal this Christmas. ‘His job-destroying, tax-increasing Budget nightmare is restricting economic growth, destroying jobs and eroding consumer confidence.’
Last night a Treasury spokesman said: ‘We are providing stability, reducing borrowing and debt and reducing inflation. This has helped deliver six rate cuts since the election.
‘The budget doubles the work we do to grow the economy and create good jobs.’
