Tuesday, 30 October 2018

Will the budget save the High Street?

We need to do something to 'save our high streets':
Futures Forum: Is it the end of the road for the High Street?

One of the issues is business rates:
Futures Forum: How to revive the health of Sidmouth's high street >>> making business rates 'more transparent, efficient and responsive to economic circumstances'

The question is what we should be doing and who should be doing it:
Futures Forum: Councils and business rates: "their short-term focus on raking in money could end up destroying town centres weighed down by huge tax burdens"
Futures Forum: Save our high streets: "Isn’t it time our council did an audit and come up with a strategy for their future?"

The Chancellor has made a few suggestions:
Futures Forum: Is turning shops into homes the best way to save our high streets?
Futures Forum: Save our high streets > "Put things on the high street people want to do, and they’ll return"

He has also promised some rates relief:
Our Plan for the high street: Budget 2018 brief - GOV.UK

But will it work?

Philip Hammond vows to 'transform' UK high streets in Budget - YouTube

With comment from the BBC:

Budget 2018: Can Philip Hammond save the High Street?

Simon Jack

Business editor

29 October 2018

Almost one in five shops in Doncaster is empty

2018 has been an annus horribilis for the High Street. Big names like Toys R Us and Maplin have gone bust, while others like Debenhams and House of Fraser have closed city and town centre sites. Thousands of stores have shut, costing tens of thousands of jobs. Cries to save the High Street have become more shrill with every empty unit.

Many retailers have cried foul in the face of a perfect storm. There has been new competition from online firms that employ fewer staff and pay far lower business rates.

There are two ways you can level the playing field. Cut charges for the traditional retailers or increase them for online traders.

Mr Hammond has done a bit of both.
Tech giants face digital services tax
Hammond: Austerity coming to an end
At-a-glance summary: Budget key points

As trailed over the weekend, he has spent £900m knocking a third off the business rates bill of 500,000 small retailers. Very welcome to those who have premises with a rateable value below £51,000.

Second - he unveiled a new £400m digital services tax to be levied on the tech giants (those with revenues over £500m - here's looking at you Facebook and Google) on the money they make on digital services like advertising and streaming entertainment (but not online sales).

So will these two measures save the high street? Probably not - at least not on their own.

While some tenants and landlords welcomed today's move, the business rates discount for small retailers would certainly not have saved any of the high profile retail busts this year. Rateable values on prominent High Street sites are usually a lot higher than the £51,000 threshold. Industry body the British Retail Consortium was underwhelmed.

Chief executive Helen Dickinson said: "Rather than tinkering around the edges, struggling high streets require wholesale reform of business rates in order to thrive. The issue remains that the business rates burden is simply too high."

Budget 2018: Can Philip Hammond save the High Street? - BBC News

And from the Spectator:

Philip Hammond’s Budget plan won’t save the High Street

Martin Vander Weyer

30 October 2018

How much did Philip Hammond’s giveaway Budget help dying town centres? Not enough, say campaigners, but let’s give the Chancellor some credit. A one-third relief in business rates for retail properties with a rateable value of less than £51,000 means an annual saving of up to £8,000 for a huge number of small businesses; pubs where people still drink beer and spirits in old-fashioned style benefit from a duty freeze that one industry body says will ‘secure upwards of 3,000 jobs’; and there’s money to help convert disused premises into homes.

On the other hand, there was a £3 billion sting for the growing army of freelance ‘consultants’ and techies who contribute so much to the new urban economy but whom the Treasury suspects of helping companies that hire them to avoid payroll taxes. IPSE, a lobby group for the self-employed, called it ‘a short-term tax grab that will do lasting damage… by taxing out of existence the smallest and most agile businesses’. I suspect that’s right: abuse may be curtailed, but with too much collateral damage to those genuinely trying to go it alone.

Then there’s the ‘digital services tax’, aimed at the online advertising revenues of the likes of Google, Facebook and Twitter, but not at direct sales by Amazon et al. Even the Chancellor’s own figures say this will raise only £400 million a year: a Labour MP called it ‘pathetically tokenistic’. At best it’s a stumbling step in a direction other governments will follow, but I doubt it will make a jot of difference to the ragtag rearguard of bricks-and-mortar shopkeepers.

This is an extract from Martin Vander Weyer’s Any Other Business, which appears in the forthcoming issue of The Spectator

Philip Hammond’s Budget plan won’t save the High Street | Coffee House

No comments: