[Commentary] Investing in retail hubs would boost our communities
Revitalising our towns: An urgent call for fair taxation to boost retail and community hubs.
Following the recent Autumn Statement, we caught up with Vivenne King, Chair of the Shopkeepers’ Campaign. King emphasises the crucial role that shopping hubs in town centers play in fostering community identity, social interaction, and economic vitality.
King argues for increased government recognition of the importance of retail in society and advocates for fair taxation to incentivise property owners to invest in town centers, making them appealing to local residents. The current business rates system, charging occupiers more than half of their annual rent, is seen as a deterrent to investment and expansion.
The commentary takes a critical view on the Chancellor’s Autumn Statement for not providing sufficient relief and breaking promises to cut business rates. King calls for a commitment to placemaking with retail at its core, urging the government to lower business rates for all retailers and implement policies that encourage growth and sustainability.
Vivienne King, Chair of the Shopkeepers’ Campaign
Along with football grounds, pubs, railway stations and village greens, shopping hubs give us a sense of belonging and help reinforce local identity which unites people around a common sense of pride. The shopping hubs in our town centres are one of the most important places we can go to reinforce our culture, community and our economy.
All over the country, people ‘pop down to the shops’, not just to shop but to interact and mingle with others. These places meet a need that we have as human beings to socialise and connect and in doing so they boost our wellbeing and mental health.
Last week the World Health Organisation Healthy Cities Network published a release outlining 12 action points for thriving societies. One of these emphasised the need for boosting investment in cities through fair taxation and increased investment in urban centres, linked to transparent and accountable governance to ensure optimal and equitable resource allocation.
In response to economic challenges, shopping places are eager to adapt in order to thrive. While the shopping experience is supplemented by cafes, markets and public entertainment and now workplaces, health centres and residential, it is retail that sits at the heart of it all.
That is why it is vital Government recognises the role retail plays for society and sets the ‘fair taxation’ recommended by the WHO; a tax structure which enables property owners to invest in town centres and make them attractive to local people.
Britain is unique in having a system which charges occupiers of commercial property a tax, known as business rates, worth more than half the amount they pay in rent each year. At 54.6p in the pound, business rates have never been so high. As a consequence, we are disincentivising investment in our towns, not only from domestic capital but from overseas capital which should be looking at UK retail as an opportunity.
There are real costs felt by communities when shops close, in despair. People lose their jobs and their livelihoods with implications for their families and their own self-esteem. Consumers also lose heart, and eventually they stop visiting their local high streets altogether.
The problem has is no way been fixed by the Chancellor’s Autumn Statement. He has extended retail hospitality and leisure relief for one more year only. Capped at £110,000, it does not help any of the high street chain stores, whether you have two or three outlets or are nationwide; even our well-loved brands like John Lewis haven’t been immune.
This measure will help small independent shops for one extra year, but it does not encourage investment back into our high street. The 54.6p in every pound of rateable value that has to be paid in business rates is fixed, meaning that retailers must pay it irrespective of how well they are trading.
When the Conservatives came to office in 2019, they vaunted a manifesto pledge to cut business rates for retail. Jeremy Hunt has broken his Party’s promise on business rates.
The Autumn Statement has made Britain a more difficult place for retailers and investors. Retailers, who will rightly fear becoming too successful unless they suddenly find their business rates bills skyrocketing, will be more hesitant to expand. Investors, who will find it increasingly difficult to justify putting capital into placemaking, will choose to divert their resources elsewhere.
What we really need to see, by this Government or the next, is a commitment to placemaking with retail at its heart. We need assurances that bricks and mortar businesses will not have to operate in such a punitive tax environment. We need to see policies that don’t punish retailers for wanting to grow. This is not some far-fetched dream, but rather a call for common sense reform. We need to lower business rates for all retailers and simplify a system that encourages a thriving future.