MPs are demanding the government launches an urgent review of how its handling of the pandemic has impacted high streets.
In a report published today, the Levelling Up, Housing and Communities Committee says there should be an immediate “lessons learned” review of high street support from central and local government in the wake of the pandemic.
“The pandemic is not over, and it is important the government is alert to the continuing effects on our town centres and monitors the impact of the full range of Covid-19 business support that affects the high street and is prepared to adjust this if necessary,” said committee chair Clive Betts.
The report lends new support to an online sales tax, and specifies it should not penalise retailers with both an online and bricks & mortar presence. It comes after the government recently said a forthcoming consultation on an online sales tax would look at applying it to click & collect orders, along with purchases made in store using an app.
The report criticises the government’s competitive funding process for high streets, saying it lacks transparency because details are not shared of which local authority bids authority are rejected. As a result, there can be little scrutiny of whether funds are being directed to the right places, it says.
It also examines the impact of social distancing and mandatory face masks, along with measures such as relaxing planning rules on converting shops to residential use, and changes to pavement licences giving restaurants more space.
“The Covid-19 pandemic dramatically changed our high streets almost overnight, with the pandemic accelerating existing consumer trends and introducing new ones,” said Betts.
“To help build the resilient, thriving high streets of the future, it’s vital that government facilitates a long-term, holistic approach both to the planning and to the regeneration funding of our town centres.”
BRC director of business and regulation Tom Ironside said: “The report endorses our concerns that support for the high street is too often fragmented and inconsistent.
“We agree that regeneration funds should be long-term and substantial, rather than short-term and piecemeal.
“The committee shares our concerns that new rights to convert shops to residential use without planning permission could undermine the viability of high streets and town centres. Such rights should be reviewed in 2022 to assess their impact; high streets play a key role in local communities and it is vital we do not undermine that.”
On business rates, the report says a recently concluded review of the system in England has not delivered fundamental reform, and calls on the government to set out longer-term plans including a permanent reduction to the multiplier used to set the tax rate.
It comes as the Scottish government also faces criticism over its support for businesses, after new advice was issued yesterday to cancel Christmas party plans, alongside a “beyond disappointing” Budget.
UKHospitality executive director for Scotland Leon Thompson said: “Hospitality businesses in Scotland are already under severe financial pressure and this advice from Public Health Scotland for people to abandon their plans for Christmas parties is already hitting our sector hard.
“Within minutes of their statement being issued, businesses were receiving cancellations, leaving Christmas and Hogmanay trade in tatters. Businesses take up to a third of their annual revenue at this time of year. Public Health Scotland has single-handedly jeopardised the survival of businesses and the jobs people rely on.
“This came just after the delivery of the Scottish Budget, which offered little hope to our beleaguered sector.”
Graham Howarth, partner in real estate advisor Gerald Eve’s Glasgow office, slammed business rates measures announced in the Scottish budget, which included 50% relief for retail, leisure, hospitality for the first three months of the 2022-23 financial year.
“These measures are effectively a sticking plaster over a gaping pit of resentment and frustration,” said Howarth.
“For businesses hoping for a lifeline following pandemic restrictions and further uncertainty on the horizon, this is beyond disappointing.”
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