More Sidmouth shops to close

“Coles gift shop, in the High Street, will close on Saturday, October 27, and The Rendezvous, in Fore Street, won’t be far behind.

The two businesses have joined a fast-growing list of shops which have left or have plans to because of rising costs and ‘unfair’ business rates. Since February Carinas, Hospiscare, NatWest and Sweet Temptations have closed.

New Look will cease trading on Saturday, October 20, Barclays on Friday, November 16, and Pure Indulgence will close April 2019 along with Govier’s of 
Sidmouth – which has gone online only. …”

“Business rates: one John Lewis store will pay four times the tax of Amazon”

“John Lewis, the embattled retailer whose profits collapsed by 99% in the six months to July, will be charged £10.5m in business rates for its flagship Oxford Street shop from April, according to new figures — a 60% rise in three years.

A short walk away, Selfridges’ flagship shop also faces a 60% hike: its business rates bill will climb to £17.5m. That figure is almost four times the total UK corporation tax paid last year by the online retail giant Amazon: just £4.5m.

The looming threat to the high street will put pressure on the chancellor, Philip Hammond, to throw businesses a lifeline when he delivers his budget on October 29.

This weekend, Helen Dickinson, the chief executive of the British Retail Consortium (BRC), said: “These figures lay bare the shocking burden the business rates regime places on British retailers, who make up 5% of the economy and pay 25% of business rates — £7bn a year. The rates bill is leading to store closures, preventing the reinvention of our high streets, and is damaging communities the length and breadth of the UK.”
The BRC is lobbying for a two-year freeze in business rates until a revaluation in 2021, while the New West End Company, which represents businesses in London’s West End, is lobbying for a rates reduction of £5bn. This would be financed by a 1% tax on online businesses but would not apply to traditional retailers’ internet sales.

High street trading has been squeezed by online shopping, which now accounts for 18.2% of the market, with fewer stores surviving to shoulder the rates burden.

A phased four-year settlement in 2017 will bite hardest from April, with some stores facing huge increases. Burberry, which this month unveiled a new collection, faces a hike for its London headquarters of 186% compared with its rates in 2016-17.

In Manchester, Zara must pay £1.26m and Manchester City football club £2.4m, up from £1.7m in 2016-17.

Altus Group, the property adviser that researched the figures, found NHS hospitals will have to pay £386m and council-controlled state schools £957m.

Nickie Aiken, the Conservative leader of Westminster council, said: “Our taxes should reflect our way of life. I would ask the Treasury: do we want to continue the decline so that the only things left on the high street are charity shops and betting shops?”

Source: Sunday Times (pay wall)

Resuscitating high streets – or are they too far gone already?

Owl is noticing more and more empty shops – even in places that seemed to be weathering the High Street decline so far (eg Sidmouth).

Isn’t it time our council did an audit of our high streets (empty shops, open shops, temporary pop-up shops, local-owned independent, chain stores, charity shops) to get a proper idea of just how bad this problem is in each town and what the mix says about the health of each town centre? And time to come up with a strategy for their future?

“… Charges to withdraw money from cash machines would be scrapped under a Labour government to “save Britain’s high streets”.

Attempts to stop their “slow agonising death” were announced by shadow business secretary Rebecca Long-Bailey with a range of measures – including stopping Post Office closures.

Sky News can reveal Labour would draw up a register of landlords of empty shops in every local authority.

And the party would deliver free public wi-fi in town centres, for those having a coffee or working in community spaces.

The plans are due to be announced on Tuesday by Ms Bailey at Labour’s autumn conference in Liverpool.

She is aiming to boost support for the party in British towns, as leader Jeremy Corbyn suggested a general election could be called imminently.

Brexit secretary Dominic Raab insisted on Sunday that “it’s not going to happen”.

Research by Which? published in June found that the free-to-use ATM network was “under threat”.

The idea to ban them was championed by Labour MP Ged Killen, who welcomed the party’s announcement.

“No one should ever have to pay to access their own money,” he told Sky News.

“If any government is serious about economic development in our towns and high streets they need to protect the financial infrastructure people and business rely on.”

The other plans would see post offices owned by the government stopped from further franchising and closing.

Under-25s will also get free bus travel in local authorities where local bus services are either franchised or publicly owned.

Labour has also promised to “work with” councils to extend wi-fi roll-outs by commercial developers in public spaces.

And it will force shop landlords to make their identity and contact details public, creating an empty shop register to “make it easier to bring empty units into use”.

A new annual business rates re-evaluation will also be introduced. …”

“Business rates ‘to blame for high street decline’ “

“The boss of Tesco has warned that if the government does not reform business rates soon it will have contributed to the decline of high streets across Britain.

Dave Lewis, chief executive of the country’s largest supermarkets group, said: “A decision not to reform business rates by the government will be a statement of policy.

“It will be a deliberate decision not to support the retail industry. We believe businesses should pay taxes, as it is the responsible thing to do, but should the government be laying a heavier burden on a shrinking industry?” He said that the government was in danger of “overmilking” the retail industry through “completely disproportionate” and excessively high business rates and risked damaging the sector.

Business rates — a tax linked to the value of property that a business occupies — have become an increasingly fractious issue in the retail industry as traditional bricks-and-mortar operators labour under a tax burden not shared by online-only rivals.

Tesco’s rates bill is almost £700 million. The total annual business rates tax take for the Treasury is £30 billion. Mr Lewis said that while corporation tax had fallen [from 28 per cent to 19 per cent since 2010], inflation-linked business rates, which hit the retail sector harder than any other, had increased.

“Business rates have gone up while corporation tax has gone down very significantly and that is very different to everywhere else. The UK has the second highest property-based tax in the Organisation for Economic Co-operation and Development at 4.5 per cent [of the total tax take]: it is only 1 per cent in France and Germany,” he said. “The approach of most of the countries in the OECD is to tax businesses on their profitability and to help businesses with investment, but business rates is a tax on any investment I make in my stores.”

Mr Lewis, who is in the middle of implementing a turnaround at Tesco, said in 2015 that retailers faced a “lethal cocktail” of rising taxes and costs at a time of falling profits. Yesterday he said that distress on the high street, where House of Fraser recently failed, showed his prediction was coming true.

Although the Treasury has made some revisions to business rates to ease pressure, Mr Lewis said that it had tinkered around the edges, despite the fact that British retailers made a huge contribution to the economy by generating employment and wider consumer spending, particularly in rural areas “where there might not be much else going on”. A recent study by KPMG estimated Tesco that contributed £37.3 billion in gross value added to the economy, a third of the construction sector’s total GVA in 2016.

There are growing calls for a tax on sales generated by online-only retailers. Mr Lewis said that if retailers were struggling to pay rates because their sales had fallen, “you need to look at where those sales have gone and if they are being taxed in the same way”. He said that a tax on online sales without a reform of business rates would result in a “double whammy” for retailers with stores and online divisions.”

Source: The Times (pay wall)

“Every town centre should have free parking to encourage Brits to return to the high street, new report says”

“ALL town centres should have free parking in a dramatic intervention to help save the high street, a major report says today.

In a five-point strategy the Federation of Small Businesses also calls for urgent measures to halt thousands of ATM and bank branch closures that are crippling local firms and driving people away from town centres….”

“Councils anticipate cutting services to ‘legal minimum’ “

Owl says: But this was always the ambition of Conservatives who much prefer “the big society” (charities and volunteers providing services) and “the small state” (councils providing minimum services). We should not be surprised at that – it is what their voters vote for. But what we SHOULD be surprised at is that it is taking MORE of our money to achieve this, not less.

Labour councils are most pessimistic (83% believe this vill happen within 5 years), as they should be, as they are generally in poorer areas and/or the North where reliance on business rates (which will be the main source of council revenue with council tax) will be tricky, particularly in a post-Brexit economy. But Tory councils, even those in business rate-rich areas are also pessimistic (63%).

A sorry state of affairs to look forward to if this government remains in power: higher taxes, lower (rock bottom) services.

“Two-thirds of councils believe they will only be able to deliver minimum services required by law within five years.

The results of a survey by the New Local Government Network (NLGN) comes as Northamptonshire County Council voted through an action plan to cut services to the bone in order to tackle a likely budget deficit for this year of up to £60m–£70m.

NLGN’s second Leadership Index survey found that councils with social care responsibilities are the most pessimistic, with 88% indicating they will be unable to deliver discretionary services by 2023.

Adam Lent, director of the NLGN, said: “This should be a sober wake-up call for a government that is overseeing a country with ever deepening social divisions and growing inequality.

“Councils are best placed to tackle these problems, and should be receiving greater investment to do this, not seeing their services stripped to the bare minimum.”

Lent said areas stripped of libraries, park maintenance, pothole repairs and advice to residents on care, or housing, were likely to see a narrowing of opportunity for residents.

The survey was carried out from 7th June to 2nd July, with 191 council leaders, chief executives and mayors replying.

Labour-run councils are the most pessimistic with 83% predicting that discretionary services will disappear by 2023, compared to 63% of Conservative-run authorities.

Northamptonshire, on Thursday afternoon, approved an action plan that agreed “spending priorities”. These include safeguarding vulnerable children and adults. Also in the plan is a review of contracts with third party suppliers. Around 70% of Northamptonshire’s services are delivered through external suppliers.

Paul Carter, County Councils Network chairman and leader of Kent County Council, said: “It is clear that unless government finds a long-term solution to council funding and a fairer distribution of resources between authorities, other well-managed county councils could find themselves unable to balance the books.

“The new secretary of state for local government recognises the situation we face, but the Treasury needs to better understand the pressures we are under and support counties with short-term resources for the next financial year, ahead of a longer-term deal in the spending review.”

Northamptonshire will also review its external contracts, including Private Finance Initiative Schemes, as well as its capital programme.

Before the meeting, Andrew Lewer, Conservative MP for Northampton South, tweeted that the county council’s “problems are national as well as local”. He revealed he has written to communities secretary James Brokenshire and health secretary Matt Hancock to request a meeting about the authority’s position.

Pressure on the government to provide further assistance to Northamptonshire also came from Anne Longfield, children’s commissioner for England, who tweeted that her organisation was “writing to ministers asking for them to also ensure no vulnerable children are put at risk by cuts to services”.

It also emerged this week that East Sussex County Council last month agreed plans to reduce services to the bare minimum required by law.

Becky Shaw, chief executive, said: “Careful planning, efficiency savings, innovation, hard work and commitment to our four key priorities have enabled us to make the best use of our dwindling resources, but the pressure created by local residents’ needs cannot be met by income raised locally.

“Having transformed our services and saved £129m since 2010, we need to be realistic about what further budget cuts will mean for the residents, communities and businesses of East Sussex.

“Our core offer paints an honest picture of the minimum that we realistically need to provide in the future and we want to use this as the basis for discussion with the government, partner organisations and residents in East Sussex.”

The Times reported this week that the chancellor, Philip Hammond, has told non-protected departments, including the Ministry for Housing, Communities and Local Government, to earmark further cuts before next year’s spending review.

Some departments believe that these budgets could be cut by as much as 5%, according to the report.”

“Next CEO Lord Simon Wolfson says business rates accelerating ‘process of failure’ on the high street”

Lord Wolfson does not mention a transaction tax on online purchases – not surprising as Next has a big online presence too.

“The chief executive of Next has called on the government to reform business rates, which he says are accelerating the rate at which high street shops close.

Lord Wolfson, a Conservative Party peer, says the tax on commercial property has not been updated to reflect the increasing popularity of online shopping and needs changing.

“The one thing that I think the government must do is make rates more responsive to today’s reality,” Simon Wolfson told ITV News.

“Let the thriving towns and cities, we should be paying high rates, but the ones that are dying, actually that process of failure is being accelerated by rates that are stuck at levels that don’t reflect today’s reality”. …”