City centres are in danger of becoming ghost towns as shopping habits change, a committee of MPs has warned. A fifth of UK retail sales now occur online with that proportion likely to grow, the Housing, Communities and Local Government Committee said.
The Committee called for lower business rates and more regeneration in town centres as well raising taxes for online giants such as Amazon.
The government said it was investing to ensure High Streets “adapt and thrive for generations” but the impact on high streets had been “stark”, resulting in “store closures, persistently empty shops and declining footfall”.
One problem, the committee said, was that High Street retailers paid much higher business rates than online retailers because of their greater reliance on physical premises.
Amazon UK’s rates, for example, are about 0.7% of its UK turnover, while most High Street retailers pay between 1.5% and 6.5%.
To counter this, the MPs said the government should look again at bringing in an online sales tax – an idea the Treasury previously ruled out over concerns it would penalise consumers.
The committee urged it to consider “green taxes” on online deliveries and packaging, as well as higher VAT and a general sales tax.
The revenue raised would be put towards a reduction in business rates for High Street retailers and more funding for regeneration, it said.
The committee also called for planning reforms to create more “green spaces” in city centres, as well as more leisure, culture and social care services.
And it said High Street retailers themselves needed to focus on “experience” and “convenience” to lure shoppers back – for example by extending their opening hours.
High Streets Minister Jake Berry said the government had unveiled a £675m plan to support English High Streets at the last Budget.
“We know High Streets are the backbone of our economy and a crucial part of our local communities, and we want to see them thrive – both now and in the future.
“We’re supporting small retailers too, slashing business rates by a third – building on more than £13bn of rates relief since 2016.”
We have a number of finance options for retailers to support growth and cashflow. These include Business Loans for any purpose, Asset Finance to fund shop refurbishments of investment in equipment, Commercial Mortgages for buying retail property, Flexible Overdrafts to ease cashflow problems and Merchant Cash Advances which give advances on future sales.
