End this ‘shops tax’, Chancellor, so high streets can survive – Jake Berry

In 2019, I was joined in Parliament by new colleagues from the so-called Red Wall, former Labour seats which had voted Conservative in the hope of radical change.

Those voters had had enough of low wages, declining town centres, and a fraying community fabric. They were sick of walking into their town centres and seeing boarded-up shops. They rebelled against the distance they felt from Westminster politics: and the Conservative Party promised them change.

Now it is time to deliver. The Government has begun this process, with the Secretary of State for Levelling Up setting out the four key areas on which the policy agenda will be judged at Conservative Party Conference: strengthening local leadership, raising living standards, improving public services, and giving people the resources necessary to enhance the pride they feel in the places they live.

The reality is that meeting these objectives is going to be harder after the Covid-19 pandemic. The crisis has exposed the deep structural disadvantages faced by many communities, particularly in the North. Raising living standards through decent employment and enhancing pride in local place is not going to be easy but we can do it if we think clearly about where those jobs will come from and how they can be sustained.

I see all too clearly that bricks and mortar retail is struggling. In the North, the retail sector can make up 15 per cent of the job market in some areas and the sector employs 3.2 million people in total across the UK. More than 8,700 chain stores closed in UK high streets, shopping centres and retail parks in the first six months of 2021 and 190,000 jobs in retail were lost between March 2020 and April 2021. From Southport to Sunderland, Rotherham to Richmond, the long-term challenges confronting our high street are a cause of deep concern among my parliamentary colleagues.

However, it isn’t just Covid-19 that is affecting bricks-and-mortar retail, there are other factors. One of these is business rates. Rates are simply too high and have been for years. Over time, that has led to a gradual decline in the amount of investment retailers have been able to make, and that means fewer jobs in 
those areas of the country that need 
them most. Research out earlier this month found that business rates are so high as a proportion of earnings that shops in some areas of the North pay an effective tax rate of up to 70 per cent, compared to 20 per cent for those in the South.

Over time, that has led some areas to have far higher numbers of empty shops than others. Research also found that Yorkshire had rates of empty shops around eight per cent higher than the average for England and Wales. Some constituencies, however, had much higher rates including Halifax at 166 per cent, Dewsbury at 94 per cent and Wakefield at 37 per cent.

But it isn’t just a Northern problem – shops in disadvantaged communities across the country are paying far more in business rates as a proportion of income than they should be.

Put simply, high business rates now amount to an unfair ‘shops tax’, reducing investment in the very places that need it most and which this Government promised to level up. It means hard-working businesspeople are more likely to go out of business in areas where we desperately need more traders ‘setting up shop’.

To me and many of my colleagues across the North, the answer could not be clearer. I am urging the Chancellor to use the final report of the business rates review later this month to look again at business rates nationally and consider an online sales tax. We must take action now to ensure there is a level playing field between bricks and mortar and online retail.

Shops across the country need levelling up, not boarding up. Many people across the country in 2019 put their faith in the Conservative Party for the very first time, we need to deliver on our central promise of levelling up the whole of UK. It’s time to level up our high streets, for the sake of all bricks-and-mortar retail and the communities which depend on it.

Jake Berry is chair of the Northern Research Group of Tory MPs and the former Northern Powerhouse Minister.

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