The government needs to adapt our high streets. Photo: Getty
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How relieving a million small businesses of business rates would help the high street

The high street is crying out for serious policy: let’s take a million small businesses out of paying business rates.

When David Cameron and Mary Portas strolled through Camden back in 2011 to launch a review into the future of the high street there was a sense that big ideas were beginning to take shape. Ministers were pushing the plight of our high streets up the agenda and the Government, it appeared, was ready to take serious action to support a vital British institution.

Fast forward three years and high hopes of a policy breakthrough simply haven’t materialised. Instead we’ve seen taxpayers’ money frittered away on frivolous items like Peppa Pig costumes and gorilla statues under the government’s failed Portas Pilots. We’ve seen the biggest increase in business rates in 20 years, reality TV high street makeovers that unravel as soon as the cameras leave and community institutions like the Post Office lose millions and see their existence threatened after ministers cancelled an agreed DVLA contract.

Add to this the confusing messages on planning, ministers arguing that an explosion of betting shops, fast-food outlets and payday lenders is a sign of a thriving high street and the baffling decision to cancel a much-needed business rates revaluation and the full scale of government failure becomes clear.

Today, consumer confidence and high street footfall is down, retail insolvencies have just hit a five-year high and there remain over 40,000 empty shops in the UK.

It’s time ministers stopped fiddling in the margins and faced up to the fact that high street policy under this government has been laughably lightweight. Serious policy is desperately needed and that’s why I’m calling on the government to remove over one million small businesses from paying business rates.

There are almost 1.2m small businesses occupying properties with a rateable value of less than £12,000 and they account for approximately six per cent of the total business rates tax take. With the right political will government can remove these altogether from paying business rates with the cost to the taxpayer outweighed by the boost to enterprise and massive efficiency savings to be made.

This could not only be the difference between high streets having a fighting chance of survival but ultimately kick-start a small business renaissance.

I’ve lost count of times I’ve heard traders explain that business rates are the reason they’ve had to shut shop. I’ve met traders whose business rates bill is three times higher than their rent and listened to entrepreneurs explain that business rates are the sole reason they don’t want to open a high street venture. This is a tax that bears no relation to a business’ ability to pay, stifles investment and prevents good ideas taking root on the high street.

So let’s give small businesses the best possible chance of becoming the thriving model of a sustainable high street recovery. Exempting them from paying business rates can be done in a way that’s affordable to the Treasury by having a bonfire of bureaucracy at the outdated quango that sets business rates.

If the government were to streamline the Valuation Office Agency, get rid of the monster of administration that’s been created and introduce fairer annual revaluations like they have in Holland then they’d make enormous savings in transitional relief, reduced appeals and administration costs. In this parliament alone, the government is set to spend over £1bn on transitional relief. Council administration costs would also be slashed, as they’d no longer have to collect rates from small businesses and in many cases obtain summonses for non-payment.

So making much-needed reform to a lumbering, unresponsive quango and bringing in annual revaluations can help pay for a tax cut for businesses that are effectively the lifeblood of communities and which have suffered the worst from the economic downturn.

There are plenty more measures the government needs to take to help our high streets adapt to the needs of the 21st century. But after all the hype and headlines ministers have created around the high street there is not one bold policy of any significance to show for it.

Freeing more than a million businesses from rates would be such a policy.

David Cameron has promised to look at business rates in 2017 but that’s just too late and thousands more businesses will have gone bust by then. We should be under no illusion that our high streets will ever return to the model of years gone by, because they won’t. But if we’re going to shift to a community-led model then small innovative ventures will be vital and that’s why ministers need to change their mindset from “big is best” to “small is beautiful”. 

But above all ministers need to properly break free from the policy paralysis that typifies their approach to the high street and discover some political courage to introduce the bold policies that are needed.

Bill Grimsey is Labour's high streets adviser and former chief executive of Wickes and Iceland

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All the dumb stuff ministers said about technology following the Westminster attack

“The web is an international worldwide phenomenon.”

It’s a bit like realising the country is run by your mum trying to use iMessage for the first time. “Why has it turned blue?” Her Majesty’s Government cries in unison, scrunching its eyes up and holding the nation’s security a metre away from its face.

Yes, this is the horrifying reality of Britain’s counter-terrorism response being in the hands of people who type “www.” into the search bar and bestow iPlayer with an unnecessary “the”.

As government ministers express concerns about encryption – asking WhatsApp to let them in, among other misguided endeavours – following the attack on Westminster last week, they have revealed a worrying lack of any form of technological literacy.

Here are the most terrible bits, which your mole found by surfing the web on doubleyew doubleyew doubleyew dot google dot com:

Home Secretary, Amber Rudd

“Necessary hashtags”

“The best people who understand the technology, who understand the necessary hashtags to stop this stuff ever being put up, not just taken down, but ever being put up in the first place are going to be them.”

Watch out, all you hashtag-happy potential perpetrators of atrocities. If you tweet #iamaterrorist then the government will come down on you LIKE A TONNE OF TETRIS BRICKS.

“We don’t want to go into the cloud”

“If I was talking to Tim Cook, I would say to him, this is something completely different, we’re not saying open up, we don’t want to go into the cloud, we don’t want to do all sorts of things like that.”

The Home Secretary definitely thinks that there is a big, fluffy, probably cumulonimbus cloud in the sky where lots of men in thick-framed glasses and polo necks sit around, typing content and data and stuff on their computer machines.

Foreign Secretary, Boris Johnson

“New systems and algorithms”

“They need to develop new systems and algorithms to detect this stuff and remove it.”

Fire up the algorithms, boys! Don’t spare the horses!

“Good men do nothing, and that’s what’s happening here”

“Evil flourishes when good men do nothing, and that’s what’s happening here.”

First they came for the YouTube stars, and I did not speak out – because I was not a YouTube star.

Security minister, Ben Wallace

“The web is an international worldwide phenomenon” 

“We need to explore what we can do within the realms of the web. The web is an international worldwide phenomenon, and businesses and servers are based all over the world.”

Wait, what? The world wide web is both international and worldwide, you say? Is it global and transnational and intercontinental too? Maybe he got technology confused with tautology.

I'm a mole, innit.