Saving Our Shops...
In his Autumn Budget delivered 29 October 2018, Philip Hammond made any number of promises.
One of these promises is intended to improve the lack-lustre retail sector in our town centres.
There is no doubt that the major online retailers, Amazon and the like, have caused a major shift in the way many of us shop.
As faster broadband becomes more commonplace, and the use of computers a regular home fixture, then the drift away from viewing and buying goods on a shelf to viewing pictures and click and buy on the internet, will probably continue.
Which of course is fine if you own a thriving internet retail business, but not so good if you are committed to using expensive retail premises in town centre locations.
At present, online retailers have a massive competitive advantage over their High Street competitors because they don’t have to pay:
- business rates or rent for shop front property
- salaries to sales staff.
And additionally, in the case of the mega online retailers, they often use tax havens to shelter their trading profits so don't even pay comparable tax on their trading profits.
What changed in the budget?
The Chancellor offered a one-third reduction in business rates for retailers with shop premises with a rateable value below £51,000.
Although it should be said that this reduction is for a limited period only - two years from April 2019.
The Chancellor also committed what seems to be a fairly modest sum of £675m to rejuvenating city and town centre areas.
This will support the cost of:
- improving traffic flows to shopping areas
- the renovation of empty retail premises to provide residential accommodation
- the re-purposing of older or historical property
How much of the £675m we'll see in Lancashire hasn't been announced!
The Chancellor also said he will start a process of increasing the UK tax take from the major online retailers, social media outlets and search engines, who are selling goods and services to UK users. A new digital services tax will commence in April 2020 and is intended to charge 2% of the revenues generated by these organisations from customers in the UK.
Is it enough?
These changes may have some impact.
Town centre shops depend on foot-fall, and the above investment could encourage an increase in this, but whether these measures really go far enough to slow or stop the movement away from window shopping to browsing the internet remains to be seen.