Hammond to heed high street woes
Chancellor expected to use Budget to deliver package of measures to help shops, including business rate cut
PHILIP HAMMOND will use next week’s Budget to deliver a package of relief measures for the UK’S battered high streets, including cutting business rates by a third for half a million companies. The Chancellor is expected to say on Monday that he has listened to cries for help from the nation’s embattled shopkeepers by unveiling £900m in immediate business rates relief for 496,000 small retailers.
Mr Hammond will also launch a £650m fund to transform high streets by improving infrastructure and transport access. The “future high streets fund” will help local areas switch under-used retail space into homes or offices, alongside a move to relax town planning laws that will make it easier to change a retail property to other use.
The fund will also be used to restore run-down properties and put historic buildings back into use. A source close to the Treasury told The Daily Telegraph: “One theme of the Budget will be getting businesses onside, and trying to boost investment.”
Retailers have long campaigned for reform of business rates, which are calculated based on the annual market rent value of a commercial property.
A long-delayed revaluation of properties last year pushed up business rates across the country, adding to cost pressures on companies that have also been hit by rises in the national living wage and the imposition of the apprenticeship levy. EY, the accountant, calculates that business rates have risen 15pc in the last seven years.
However the Treasury has resisted wholesale change of the system, which raises around £30bn a year. It has instead focused on providing business rates relief to smaller businesses, which it estimates has saved companies £10bn since 2016.
The £900m relief will apply to small retailers on premises with a rateable value of £51,000 or below. The fund will only apply to England, as the devolved authorities have responsibility for setting their own business rates. It remains unclear how long the relief will apply, but it is understood that 90pc of small English retailers will be eligible.
The Federation of Small Businesses (FSB) declared the measures an “early Budget treat” for its members, though it said business rates relief should extend beyond retail to the hospitality and service sectors.
“This announcement shows the Chancellor has listened and this relief targeting firms in England is a welcome step in getting the urgent help that all small businesses need,” said Mike Cherry, the FSB boss. “This fund will help keep high streets at the heart of our communities.” Helen Dickinson, chief executive of the British Retail Consortium, warned that “these measures alone are not sufficient to enable a successful reinvention of our high streets.
“Retailers are currently in the midst of a perfect storm of technology changing how people shop, rising public policy costs and softening demand.”
Mr Hammond is also thought to be looking at a digital services tax in the Budget on companies such as Facebook and Uber. The relief measures for the high street will include a £2m pot to fund a “high streets task force” that will provide “support and advice to help revitalise high streets”.