Hammond’s chance to save the high street

THE decline of the Debenhams store chain has been a long, unedifying story of greed, mismanagement and chronic failure to adapt to the modern retail market.

Taken over 15 years ago by a private equity syndicate motivated purely by short-term avarice, this former high street power-house was starved of finance and loaded with massive debt – a burden from which it has never fully recovered.

So the news that the company plans to close up to 50 stores after posting a huge £492million loss hardly comes as a shock.

But for all the caveats, Debenhams’ problems also bring into sharp focus the crisis engulfing the British high street.

Internet behemoths such as Amazon now dominate the market so much that most traditional retailers find it almost impossible to compete, especially as the dice are so heavily loaded against them. Debenhams paid business rates of £80million last year, compared with the £14million Amazon paid on its vast out-oftown warehouses. Yet Amazon’s UK revenues of nearly £9billion were almost five times those of Debenhams.

This unfairness must be rectified. Unless the online giants are made to pay their rightful share of tax, the heart will be ripped out of countless towns and villages.

In his Budget on Monday, Chancellor Philip Hammond can throw traditional retailers a vital lifeline by cutting, or at least freezing, business rates.

In the longer term, he must also consider tying corporate taxes in this sector to turnover, rather than profits.

Because only by creating a level playing field can the high street be saved from extinction. And if Mr Hammond waits much longer, it may be too late.