Why make life tougher for retailers when high streets are already being hollowed out? - Andrew Vine

It isn’t only premises occupied by the big names lost in recent years, Debenhams, Wilko and BHS among them, that present such a forlorn face.

Smaller shops that were home to independent traders have gone the same way, beaten by rising costs, the ruinous effect of the Covid lockdowns that robbed them of customers and the onslaught of online competition.

Alarm bells about the state of Yorkshire’s high streets have been ringing especially loudly in recent weeks.

Last week, members of Kirklees Council expressed concern about the number of closures in the centre of Huddersfield. Before that, a survey of towns and cities across the north found similar disquiet among the residents of Wakefield, Dewsbury, Selby and Halifax.

In Sheffield, the first three weeks of the new year saw half a dozen shops shutting.

Even in one of the most apparently prosperous towns in North Yorkshire, Richmond, residents and traders alike have voiced their concerns.

But wherever the shutters are coming down, the same sense of loss is being expressed by the people who live there and the dwindling number of traders left to serve them. High streets are being hollowed out and communities undermined by the seemingly never-ending closures.

As if matters were not already bad enough, now comes a warning that they could get even worse.

A new industry group, the Retail Jobs Alliance (RJA), has said the sector faces a “perfect storm” of additional costs which put jobs at risk and threaten a new wave of store closures.

This is a group that needs to be listened to. Its members include M&S, Tesco, Sainsbury’s, Morrisons and Primark. If retailers of this calibre are worried, then the government ought to pay very close attention to what they say and act to avert the death of the high street.

Their concerns are well founded. The Centre for Retail Research predicts more than 17,000 shops will close this year, a substantial increase on the 13,000 which shut in 2024.

The RJA estimates that 300,000 people will leave the retail sector by 2028 as shops shut. Leaving aside the question of where such huge numbers will find new jobs, what state is this going to leave our already weakened high streets in?

And a substantial measure of blame for what is happening lies with the government.

The RJA points to the looming increases in the minimum wage and employer contributions to national insurance as factors threatening retail, but there is an additional element in the perfect storm they say is brewing.

From April, higher business rates will be levied on companies with properties valued at more than £500,000, which the RJA says will affect future investment in retail and directly affect more than 4,000 shops.

To allow a hike in rates to accelerate the decline of retailing makes no sense for either the places losing their shops, or for a government which claims economic growth is its top priority.

A shrinking sector can only inhibit growth and reduce the take from business rates as shops close. And if hundreds of thousands of staff lose their jobs, the country is going to be picking up an increased benefits bill for at least some of them.

Only days before the RJA issued its warning, the chief executive of M&S, Stuart Machin, accused Chancellor Rachel Reeves of raiding the retail sector like a “piggy bank”, calling on her to stagger the national insurance increase and launch an urgent review of business rates.

She should do both, because Mr Machin and his colleagues in the RJA know far more about the threat to shopping streets than any Chancellor.

They are at the sharp end. It is their businesses – and employees – which have paid the price as traditional bricks-and-mortar shops struggled to compete with the growth of online shopping, which has far lower operating costs.

It would be an act of folly for the government to make life even more difficult for retailers by persisting with a flawed plan to impose massive additional costs on them, especially when the economy is doing badly and shoppers are thinking twice about what they can afford to spend.