Call to overhaul business rates system to save struggling high streets

Andy Street has called for a wholesale review of Britain’s business rates system in an attempt to save struggling high streets.

In an appearance at the Treasury Select Committee, the Mayor of the West Midlands and former John Lewis managing director said business rates “fall disproportionately” on the retail and manufacturing sectors, arguing the system must be overhauled in order to help town centres.

While acknowledging the changes made by Chancellor of the Exchequer Philip Hammond, the mayor warned that the series of reliefs brought in by the Chancellor are not sustainable, and that a full review of business rates is now required to make the system, which only makes up 4% of total taxation but heavily impacts on the fortune of high streets, fit for purpose again.

When pressed on what changes he would like to see made, Street called for reduced rates for new and expanding businesses, as well as a 100% relief for public sector organisations who bring their services into high street units.

The ideas form part of Street’s plan to turn town centres into “free trade zones”, which would give enhanced powers to local authorities and more support for shops and local businesses.

The model – which he says has successfully led to rapid economic development across the world, particularly in Asia and the Middle East – sets the tax, planning and customs arrangements for trade to develop.

To help make this model work, he has proposed:

Reduced business rates and ability for local authorities to grant business rate relief for new or expanding businesses.
100% business rate relief on public sector organisations like the NHS or further education colleges who bring their public services into units on the high street.
Special planning conditions, for example, to allow rapid change of use on high streets, to allow flats to be built in town centres quickly, and to fast track public realm improvements and new green spaces
Additional policing, infrastructure, and public realm spending for businesses, funded by increased taxation of online businesses such as Amazon

This proposal builds on the Mayor’s 12-point Blueprint for the Modern British Town Centre, which was published last year. His plan proposes twelve different elements which local leaders should consider when trying to create thriving and successful places for their people – including urban living, co-working spaces and public services in town centres, and making sure areas are green, clean and safe.

As part of Street’s commitment to aid struggling high streets, the West Midlands Combined Authority (WMCA), which he chairs, has launched a £20m town centres regeneration programme to regenerate five areas: Bilston, Dudley, Walsall and West Bromwich in the Black Country and Bordesley Green in Birmingham.

He has also set up the Town Centre Taskforce, an expert panel chaired by managing director at HSBC Commercial Banking Jon Bramwell, to offer advice on measures to revitalise high streets.
Street said: “Our town centres and in particular our high streets are the heart of where we live, and they are having a tough time. We need to think originally to come up with practical solutions to help them thrive again.

“This ‘free trade zone’ idea would create the special conditions that our town centres need, including reducing business rates, special planning rules, and new town centre funding from a tax on online businesses.

“Here in the West Midlands, we are already making progress with our Town Centres Programme, but there is much more still to do so that we can all be proud of our high streets once more.”