As we gear up for a busy few days at Revo 2019 in Liverpool, Redwood Consulting looks at how the main political parties are likely to address the ongoing question of retail, and the challenges facing our high streets.
With a General Election hurtling towards us at a startling speed, the debate will likely revolve around three things: Brexit, Brexit and Brexit. But once this issue is put to bed, after a deal, no-deal or cancellation, the country will still be facing many of the problems that led so many to vote in the EU Referendum in the first instance.
Unfortunately, some policy areas receive more public and political sympathy than others, which has left UK retail as an almost forgotten policy debate, in and amongst the guttural battle cries of each political party on education, the NHS, housing and crime.
Talking about the solutions to a downturn in footfall and spend in our countries’ town centres and high streets doesn’t win that many votes in a national election, likely because each town and city in the UK face similar challenges in unique circumstances. And even though the UK’s main political parties will campaign and debate other issues more vociferously, they will all have to publish their plans for the high street in their manifestos.
So what can we expect from each political party when it comes to retail?
Whilst Labour and the Conservatives disagree on plenty of issues, there is common ground in the pursuit of a revived British High Street.
For example, both Parties want to maintain free-to-use cash machines in town centres around the UK, with the Conservatives promising to abolish business rates on such units and Labour looking to do the same (although it is unclear with what mechanism) with both ATMs and bricks and mortar banks and building societies. Whilst hardly revolutionary, research has shown that 54% of those living in rural areas would not be able to access cash as easily without such machines.
In more ‘radical’ terms, both are looking to solve the problem of empty stores up and down the country. For Boris Johnson, this takes the form of a new “A” class business category covering shops, financial and professional services, restaurants and cafes. The measure is intended allow existing shops to easily offer additional services.
Jeremy Corbyn, however, would hand local authorities the power to reopen shops left vacant for more than 12 months, with a view to filling them with co-operative, community, start- and pop-up businesses. Whilst Labour has not yet made clear exactly how they intend to achieve this, reference has been made to a landlord register, accessible to local authorities.
Other policies include free wifi in town centres, free bus passes for under-25s (both Labour) and a moderate spending boost in the form of the High Street and Town Centre Fund (Conservative).
But it leaves one very large, Valuations Office Agency-sized elephant in the room: business rates. Most retailers and landlords highlight the need to reform the tax. That said, very few of these stakeholders agree on how exactly to accomplish it.
Both the Conservatives and Labour will likely offer consultations on business rates in their election manifestos. Whilst reviewing the tax will be welcome, some within the industry will question what reports from Mary Portas and Sir John Timpson were meant to accomplish, not to mention the recent High Streets and Town Centres in 2030 inquiry and subsequent report from the Housing, Communities and Local Government Committee.
Each of these reports, as well as the last two from Bill Grimsey, call for a significant overhaul of the current system. They offer solutions from the abolition of the tax offset by a rise in VAT (which would apply to retailers on the high street as well as online), to an additional tax that would apply to businesses with more than 20% of sales online.
The ideas are there from those that know the sector (and its flaws) best. Many will now think it is time to stop ‘consulting’ and start implementing almost a decade of recommendations.
Should either Party offer a policy that levels the playing field with online retailers, whilst maintaining the significant funds that the tax has traditionally generated for the Treasury, they could be on to a winner.
Unfortunately, retail policy does not win elections (and certainly not this one).