High streets will become 'ghost towns' without urgent tax reforms, MPs say

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The UK’s once-thriving high streets will become deserted “ghost towns” unless ministers hike taxes on online retailers, a cross-party group of MPs has said.

According to the Communities Committee, a new online sales tax should be urgently introduced as part of a raft of new measures designed to revive flagging town centres.

High streets are under threat from online retailers, MPs say

High streets are under threat from online retailers, MPs say

In its reports, it blames the decline of Britain’s high streets on “dated policies and an unfair tax regime” which it says must be reformed to allow retailers to flourish in the future.

It states: “With online sales currently at 20 per cent, and changing consumer behaviour meaning this is likely to continue growing, the future for high streets and town centres will become increasingly bleak.

“Some formerly thriving shopping areas are likely to become ghost towns and effectively close down altogether unless the Government, councils, retailers, landlords and the local community act together to implement the Committee’s recommendations.”

The MPs claim that business rates are stacking the odds against high street shops, with Amazon’s bill amounting to around 0.7 per cent of its UK turnover while bricks-and-mortar stores are paying between 1.5 per cent and 6.5 per cent.

The cross-party group of MPs called on ministers to go “further and faster” to “level the playing field” between online and high street retailers by considering a sales tax, an increase in VAT, an online sales tax, and “green taxes” on deliveries and packaging.

However, they also appealed to high street retailers to do more to offer what online traders cannot by focusing more on personal interactions and convenience.

Local authorities must “get to grips with the fact that their town centres need to change”, the report concluded.

Committee Chair and Sheffield MP Clive Betts said: “The growth of online shopping has profoundly changed retail in the UK, and the knock-on impact on high streets has been stark.

“It is likely that the heyday of the high street primarily as a retail hub is at an end. However, this need not be its death knell.”

The committee highlighted Malton in North Yorkshire as an example of how areas can win back shoppers.

The report praised the market town for developing a reputation for good food, which it said had “played a key role in leading the regeneration of the town”.

Thirsk and Malton MP and committee member, Kevin Hollinrake told The Yorkshire Post: “Malton is an excellent example of how landlords and retailers can work together to attract footfall to the town through a combination of its strong brand identity as the food capital of Yorkshire.”

He also demanded the abolition parking charges.

Responding to the report, High Streets Minister Jake Berry MP said the Government had “stepped up” its support for retailers with £675m of fresh funding. But he added that “an online sales tax would be passed onto consumers”.