The Government has published a report which explores which measures should be taken to preserve the future of town centres and the high street.
The report presented by MPs yesterday, entitled High Streets and Town Centres in 2030, draws attention to the disruption taking place in the sector, and makes recommendations to the Government, local government, local communities, retailers and landlords, to be acted on urgently – driven by local authority intervention and kickstarted by the Government's £675m Future High Streets Fund.
The report recommends that funding is generated by revenue from business taxation reforms including a sales tax, an increase in VAT, an online sales tax and green taxes on deliveries and packaging. The Government has already announced the introduction of a Digital Services Tax in April 2020 to address issues related to historic avoidance of corporation tax, but the report urges it to go further to level the playing field between online and high street retailers.
It suggests that revenue is raised by reducing business rates, offering a 12-month holiday from rates increases which result from investments into improving properties, and an increase in the funding available to local areas through the Future High Streets Fund. It also states that the Government should ensure that planning powers are fit for purpose, sufficiently responsive and up to date, and should undertake a comprehensive review of high street planning.
At a local level, the committee recommends that action is taken to create visionary strategies with the backing of the local community, to support local traders, facilitate parking and develop the role of place partnerships – and that retailers should carve out a role dinstinctive from online selling that focuses on experience and convenience, by making more use of staff and reassessing store opening hours.
Finally, regarding landlords, the committee recommends they take an active approach, providing tenants with good-quality properties on a flexible basis and investing in and reconfiguring properties for new uses, and that the Government task the Law Commission with reviewing the Landlord and Tenant Act 1954, Part II, assessing in particular whether the law as it stands is impeding the emergence of a landlord/tenant relationship more appropriate for the current retail environment.
The report concludes: "We firmly believe that our high streets and town centres can have a better and more balanced future ahead of them if our recommendation are followed. This will require a shift from the retail focused activities of high streets and town centres today to new uses and purposes which foster greater social interaction, community spirit and local identity and characteristics. With a properly planned strategic intervention led by the local authority, with the backing of local stakeholders and the wider community, we can redefine our high streets and town centres and ensure their long-term sustainability for future generations to come."
Helen Dickinson OBE, chief executive of the British Retail Consortium, responds: “The Select Committee are spot on when they say, ‘retailers are paying more than their fair share of tax’. In fact, retail accounts for 5% of the economy, pays 10% of all business tax and shoulders 25% of the UK’s Business Rates bill. This damaging and outdated Business Rates system, which drives up the cost of doing business, is a major factor in store closures as well as hindering the successful transformation of our high streets.”
“While we agree that Government should examine alternatives to this broken system, we do not agree that online taxes or taxes on deliveries and packaging on those goods is the right way to go. Retailers are blurring the lines between the digital and physical experience. With eight of the top 10 internet retailers also having physical shops, it is clear that an online tax would further damage the high street.
“We welcome the Committee’s recommendations to mitigate the Business Rates burden through lower rates or investment relief. However, such relief must not result in increased costs to other retail activities. Many well-known brands disappeared from our high street last year. Without a full and urgent review of business rates and business taxes, the Government is sleepwalking into the demise of many of our local communities up and down the country. Failure to act by Government will have devasting consequences for local communities and consumers.”
Read the full report here.