The British high street is in danger of dying a slow and agonising death. One of the reasons for this sad demise is the prohibitively high business rates being charged by local authorities. So when Chancellor of the Exchequer Philip Hammond announced business rate relief for thousands of small retail businesses, shop owners up and down the country breathed a sigh of relief.
The independent cafe or the family-owned hardware store simply can’t afford the cost of doing business — particularly when national chains can undercut them on price. Factor in the threat posed by online retailers and the fact that there are still any independent stores left in the UK might be regarded as a minor miracle.
The government is to set aside £1.5 billion for business rate cuts over the next few years. What does this mean for your own shop? Well, according to the chancellor, your business rate could be cut by up to a third.
Around £900 million is to be made available immediately. If you’re a small shop owner on one of Britain’s high streets, this could make a huge difference to your balance sheet.
How Much Can Small Retail Businesses Expect to Save?
According to The Guardian, a pub in Sheffield could save around £6,000 a year on business rates.
There was more good news for small retail business owners on the high street. As part of the same budget, Philip Hammond announced a £650 million war chest for transforming Britain’s high streets for the 21st century. Planners can spend the money on various improvements to infrastructure and transport.
Of course, this is great news. But could it be a case of “kicking the can down the road”? The UK high street’s problems are deep-seated, and they won’t be solved by saving local retailers a few thousand pounds a year.
Local entrepreneurs still need financial assistance in order to get their new retail businesses off the ground. More money is needed for cosmetic improvements in town and city centres. And there’s the issue of urban parking restrictions to address. High streets need to be more attractive to the average consumer if these negative trends are going to be reversed.
The Chancellor also announced a relaxation of town planning rules. This move is aimed at making it easier for local authorities to turn disused retail units into homes and food businesses. While this will reduce the number of available units in most urban areas, it should make British high streets a lot more pleasing on the eye.
Have Business Rate Reductions Come Too Late?
Recent research has revealed that more than 2,500 shops closed on Britain’s high streets during the first half of 2018. And during the same period, only 1,500 opened. According to PricewaterhouseCoopers, this huge net reduction is down to rising costs — one of which is business rates. Other factors include the price of parking, poor transport links, online retail and a chronic image problem.
Perhaps most alarmingly is PricewaterhouseCoopers warning that the high street crisis is set to get worse. Stores selling clothing and electrical goods have been hit hardest, as more and more people continue to turn to online retailers for such items. And the knock-on effect on food retailers continues to worsen. No retailer is immune from this growing crisis.
Yes, the government is finally taking the demise of the high street seriously. But will their latest actions be enough to help small retail business owners before it’s too late? Only time will tell.