Support for ailing high streets expected in Chancellor Philip Hammond's Budget
A £1.5 billion package to support Britain’s struggling high street businesses will be set out in the Budget.
Chancellor Philip Hammond is expected to use Monday’s statement to announce £900 million in business rates relief for almost 500,000 small retailers.
A £650 million fund will help transform high streets, improving transport access and turning empty shops into homes and offices.
But Mr Hammond was warned the measures do not go far enough, with calls for fundamental reform to business rates rather than “tinkering”.
High streets have taken a battering in recent months, with major retailers struggling as shoppers shift online and firms railing against rising business rates.
The business rates relief being offered by Mr Hammond is aimed at around 496,000 small retailers and will knock a third off their bills.
A pub in Sheffield with a rateable value of £37,750 based on its estimated rental cost will save £6,178 on business rates next year, according to officials.
While the rates relief is aimed at offering short-term help, the plan to revive town centres is aimed at having a long-term impact.
In an apparent acknowledgement that some shops will no longer be viable, there may be changes to planning rules to allow them to be converted into homes or offices.
The £650 million fund will also be used to improve infrastructure, restore properties and put historic buildings back into use.
On Thursday Debenhams became the latest big-name high street retailer to announce store closures, unveiling plans to axe up to 50 shops, putting around 4,000 jobs at risk, after posting a near £500 million loss.
Helen Dickinson, chief executive of the British Retail Consortium said the business rates announcements would not help the larger firms employing the majority of workers.
“While we hugely welcome the temporary support being given to small businesses, these measures alone are not sufficient to enable a successful reinvention of our high streets,” she said.
“Retailers are currently in the midst of a perfect storm of technology changing how people shop, rising public policy costs and softening demand.
“Struggling high streets require a broader outlook in order to thrive, particularly given the majority of the UK’s 3.1 million retail workers are employed in businesses that will not benefit from this announcement.
“The underlying issue remains that the business rates burden is simply too high and this unsustainable system needs less tinkering and more wholesale reform within the context of the wider taxation system.”
Federation of Small Businesses national chairman Mike Cherry said: “In the lead up to the Budget, we’ve been urging the Government to provide targeted support to struggling small firms on our high streets.
“This announcement shows the Chancellor has listened and this relief is a welcome step in getting the urgent help that all small businesses need. This fund will help keep high streets at the heart of our communities.”
The CBI’s chief economist Rain Newton-Smith said the relief for small firms will be welcomed by many but the roots of the problems with business rates go far deeper.
“There must be a wholesale review next year to deliver a system that encourages greater investment in digital, new technologies and energy efficiency,” she said.