Can the 2018 budget save the UK high street?
The Chancellor of the UK government this week set out the budget for the coming year, including a 675 million pound Future High Streets Fund aimed to bolster the struggling high street with improved infrastructure and delivering footfall. Chancellor Philip Hammond stated: "Embedded in the fabric of our great cities, towns, and villages, the High Street lies at the heart of many communities. And it is under pressure as never before as Britain adopts on-line shopping with greater alacrity than any other large economy."
Business rate reduction - but only small companies
Smaller companies operating from premises below 51,000 pounds will see their business rates cut by 30 percent, although for the majority of retailers who operate from higher valued premises, they will see no such benefit. The British Retail Consortium was underwhelmed, with chief executive Helen Dickinson commenting: “While we welcome the temporary support being given to small businesses, these measures alone are not sufficient to enable a successful reinvention of our high streets. 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.”
The budget also unveiled a new 400 million pounds digital services tax applicable to the technology giants who offer digital services. The tax would not come into effect until 2020, by which time the Organization for Economic Cooperation and Development (OECD), could come up with its own plans to tax the digital economy.
The government will further consult on relaxing planning laws to make it simpler to convert empty retail units into homes and office spaces. There will also be a trial register of empty shops to help councils and the government monitor properties that could be put to better use.
The BRC commented: "Retailers welcome the measures announced by the Treasury to invest new funding to boost high streets and town centres and facilitate re-invention to modern and diverse destinations. We await with interest further details of the plans, particularly around how the funding will be targeted, who will eligible and how quickly funds will be made available.”
Not the saviour of the high street
The measures set out in the new Budget are not likely to save the British High Street. According to the BRC, retailers are currently in the midst of a “perfect storm” of factors with technology changing how people shop, rising public policy costs and softening demand.
Photo credit: Chancellor Philip Hammond, source official UK government website