500k small firms to get rates lifeline in £1.5bn Budget fund
PHILIP Hammond will throw the struggling high street a £1.5billion lifeline in the Budget, it can be revealed today.
In a victory for the Mail, half a million small retailers will have their business rates bills slashed by a third.
The Chancellor will also launch a £650million Future High Streets Fund to help towns adjust to changing shopping habits. They will have the power to decide how they spend the cash, for example to improve car parking or transport links.
Ministers will look at relaxing planning laws to make it easier to convert empty shops into homes or office space.
The move is expected to pile pressure on Scotland’s Finance Secretary Derek Mackay to implement similar measures north of the Border.
The Chancellor had faced calls to act over the high street crisis, which has seen both household names and independent retailers forced to close.
More than 50,000 jobs have been lost in the UK this year alone as chains including Toys R Us, Poundworld and Maplin have gone bust. Other retailers such as Marks & Spencer, New Look and Mothercare have also closed some stores.
Debenhams this week said it will shut a third of its 166 stores over five years, putting 4,000 jobs at risk, after it reported a near £500million annual loss.
The Chancellor’s announcement is a victory for the Daily Mail, which has been campaigning to give bricks and mortar stores a level playing field with massive online rivals such as Amazon.
However, critics said the shortterm business rates cut, which applies only to independent shops, is a sticking plaster solution and far from the major overhaul of the system that is needed. In his Budget speech on Monday, Mr Hammond will announce the business rates relief for small firms. Some 496,000 small retailers will benefit from £900million of rates relief that will be worth around £1,800 to each business.
In June Mr Mackay pledged changes to the system following a review carried out by former RBS chief Ken Barclay – but has stopped short of revamping the way rates are calculated.
Mr Mackay has introduced a business growth accelerator, which means new-build properties will not pay rates. He also confirmed that nurseries will be fully exempt from business rates.
Now he has confirmed that a cap in rate rises for the hospitality sector and offices in Aberdeenshire, announced in February, will continue next year, with an additional 12.5 per cent cap in real terms.
He said the Scottish Government was committed to the small business bonus, which gives varying levels of rates relief to busi- nesses whose premises have a rateable value of £35,000 or less.
Business rates are charged as a set percentage of a property’s estimated value on the rental market – its so-called rateable value.
The relief is good news for shopkeepers concerned about a planned increase that will come into effect in April. Every company will be hit with a 2.4 per cent rise in their rates next year, in line with September’s inflation figure.
The Scottish Government based its business rates on the inflation figures in last year’s Budget.
A spokesman for the Federation of Small Businesses Scotland said: ‘If the Chancellor unveils new and interesting measures to help businesses, we expect the Scottish Government to examine whether similar measures, appropriate to Scotland, could be introduced.’
A Scottish Government spokesman said: ‘Any further measures on non-domestic rates reliefs will be considered in due course.’
Helen Dickinson, of the British Retail Consortium, said Mr Hammond’s plans would not help the larger firms employing most workers. She added: ‘These measures are not sufficient to enable a reinvention of our high streets.’
A source close to the Chancellor said: ‘The money we are committing will help us ensure the High Street is able to modernise as consumer needs change and ensure no one is left behind.’
IN a magnificent response to the Mail’s campaign, launched in July, Chancellor Philip hammond is to throw a £1.5billion lifeline to struggling high streets, with measures aimed at revitalising the commercial heart of our communities.
to be announced in Monday’s Budget, the package includes £900million of immediate business rates relief for almost 500,000 small retailers, knocking a third off their bills.
For many, this could mean the difference between survival and closure.
at the same time, an imaginative Future high Streets Fund of £650million will go towards projects such as improving infrastructure and transport links, vital for injecting new life into areas fast becoming urban wastelands.
It is hoped the move will act as a catalyst for a similar cash boost for Scots businesses when SNP Finance Secretary Derek Mackay reveals his Budget on December 12.
Mr Mackay has pledged changes to the business rates system following a review carried out by former RBS chief Ken Barclay – but has, as yet, stopped short of revamping the way rates are calculated.
the importance of recognising the needs of business has been an essential part of this paper’s campaign. a close aide to the Chancellor says: ‘as the Mail has long acknowledged, the high street is more than just the shops it hosts – it’s a community hub providing essential services for people in towns and cities across the UK.’
after yet another dire week for retailers, in which Debenhams disclosed plans to close some 50 stores, these measures could not be more timely. Yet while Mr hammond’s initiative is warmly welcome, it addresses only one side of a crisis that wiped out 50,000 retail jobs in the first half of this year alone.
For high streets have been suffocated not only by swingeing business rates, poor infrastructure and exorbitant parking charges. they have also faced brutally unfair competition from tax-avoiding online giants such as amazon.
the Scottish Government has already outlined plans to introduce an ‘amazon tax’ on online firms early in the New Year.
Yes, this paper understands successive Chancellors’ reluctance to discourage such firms from investing in Britain, while they are able to take advantage of soft-touch tax regimes elsewhere. But all over the world, there are growing demands that hi-tech giants should be forced to pay their due.
Indeed, the time is surely right for Mr hammond to screw up his courage and introduce a tech tax that takes into account these firms’ vast turnover. this paper believes that if Britain takes the initiative, other countries will swiftly follow.
Never forget, after all, that public debt is still rising, after a spending binge that has added £1.5trillion to the state’s borrowing since 2001, costing an eye-watering £600billion in interest payments.
this means there is no room for waste of the kind seen in cities such as London, where Labour mayor Sadiq Khan has splashed out an extra £9million on City hall bureaucrats alone. But with employment rates rising and tax revenues booming, Britain’s finances are in a far healthier state than forecasters predicted even a few months ago.
this gives Mr hammond leeway to cheer up the nation on Monday with a Budget to inspire optimism and make Britain fighting fit for Brexit. his measures to revitalise the high street are an excellent start.
Let’s hope Derek Mackay follows suit.