‘Malities, malities, malities, malities – that’s the four malities over.’ Now that’s a funny joke.
There was nothing remotely funny about the Budget that Philip Hammond announced on Monday, not that it stopped the chancellor – in what was likely to have been his last Budget before Brexit, at what one would have thought was a critical juncture for the nation’s finances – from inexplicably trying to play it for laughs. Most cringe-worthy was the string of puns on the new tax relief for owners of public toilets – “virtually the only announcement in this Budget that hasn’t leaked”, a measure that would finally allow local authorities to “relieve themselves”, not a subject he wanted to get “bogged down” with.
Aha… ha… ha…
Shame that instead of tinkering around the edges and, in the case of education, making the insulting token gesture of pledging £400m to allow schools to “buy the little extras they need” such as whiteboards (who needs teachers?), he did nothing meaningful to stop the retail sector from going down the pan.
Some have praised the £900m of business rates relief pledged for small businesses and the £675m promised to rejuvenate high streets as steps in the right direction. Ditto the digital service tax on tech giants. But these measures ignore the elephant – make that herd of elephants – in the room.
Small retailers are important to the health of the high street, but they are not its lifeblood – the big retail chains and shopping centres are. They need help, too, if the flood of retail failures is to be stemmed and with it a potential flood of shopping centre failures.
Find out more - Chancellor pledges £1.5bn to ‘back High Street’
What did they get? Bog all (to make more appropriate use of lavatorial humour). As John Webber, head of rating at Colliers International, starkly puts it: “There is nothing that will save one of those shops or one of those jobs. It’s not going to save any Debenhams stores. It was more about saving Philip Hammond than saving the high street.”
Given the opprobrium that has been heaped on him since Monday, it might not be enough to do that. It certainly wasn’t what the retail sector was hoping for from a Budget expected to offer at least the odd lifeline.
What of the calls to scrap downward phasing for retailers that had had their business rates reduced at the last revaluation in 2017? That would have had a much greater impact, surely. What of the tax on online retail many were expecting?
A 2% ‘digital services tax’ will only hit the biggest digital companies, but even then it won’t hit them where it hurts – their online sales, which is where they pose the biggest threat to the bricks-and-mortar high street players. That’s not levelling the playing field. That’s penalising them in a different game, and not the one that matters: the game of retail survival.
There weren’t really even any crumbs of comfort for the big retailers from the £675m of “co-funding” being committed to a new Future High Streets Fund – that is aimed at councils. All they can hope for is salvation in the unlikely form of Mike Ashley, it seems, while landlords will presumably look to avail themselves of proposed changes to PDR to allow retail-to-resi conversions.
This was Hammond’s opportunity to help high street retailers and he blew it. There won’t be any left to help if they continue to disappear at the current rate.
After #Budget2018 saw the creation of a £675m ‘Future High Street Fund’ & rates relief we got views from @Savills @JLLUK @CI_UKRetail @RevoLatest & more (https://t.co/6vM6dCqrBL) and now we want YOURS:— PropertyWeek (@PropertyWeek) November 1, 2018
Will this week’s Budget make a significant difference to the retail market?