Well, he would, wouldn’t he?

One of Britain’s most high-profile retail landlords has backed calls for higher taxes on online retailers to relieve the pressures of the “out of date” business rates regime on the country’s struggling high streets.

Brian Bickell, chief executive of Carnaby Street owner Shaftesbury, called for a “level playing field” between shops and online shopping websites such as Amazon, which typically occupy much cheaper property and pay much less in rates as a result.

That we currently have a level playing field – those who use property pay tax based on the value of the property they use – doesn’t fit the narrative of someone on the losing end of that level competition, does it?

28 comments on “Well, he would, wouldn’t he?

  1. What would be fairer would be a “user pays” type of model where the rates paid are linked more to the services used rather than the value of the property.

  2. Doc Bud–Given the piss-poor “services” provided by Grade Z UK Council hacks they should be paying us not vice versa.

  3. “…called for a “level playing field” between shops and online shopping websites such as Amazon which typically occupy much cheaper property and pay much less in rates as a result”

    The rates things is of course much like the out-of-town supermarkets and retail parks that have been around since the mid 1970s.

  4. “Mr Bickell told the Telegraph: ”People do feel that traditional bricks and mortar is being penalised…”

    People like Bickell might feel that. Most people, however, like the lower prices and the convenience of internet shopping.

  5. Surely, high-street retailers should pay an EXTRA sales tax to level the playing field with online retailers, because the high-street retailers don’t have the cost of delivery!
    🙂

  6. off topic but interesting…..

    “Once the ethnic minority population of a constituency reaches 30%… it becomes almost impossible for the Conservatives to win it…..

    In 1987 there were no constituencies in the UK with 30% or more ethnic minority populations, but it has been estimated that by 2022, the next election… there could be as many as 120.

  7. I find it hard to believe Carnaby Street’s competing with Amazon. Last time I walked through there (some years ago agreed, it’s not been high on my to-visit list since the 60s) apart from the shop did the eclectic footwear (and looking at Streetview, that seems to have gone, now) it was toot for tourists & chain store labels. Stuff you can buy at any retail park cheaper. The rents Bickell Boy’s mob charge drove avante garde threads out to Camden & areas like Brick Lane years ago. All they’ve got to market, really, is a street name.

  8. Perhaps its the landlords for the internet sellers the guy needs to target.

    Darn other landlords, offering cheaper rents than high price landlords do.

  9. Any property tax system is fair – once it is in place. It is the changes that are unfair.

    With property taxes the tax is capitalised so changes in the regime are effectively one off gifts or expropriations. The actual annual payment is just the boring collection side.

    It does’t matter how random a system looks – that is factored into the price of properties when purchased. “Tidying” things up gives no real benefit yet causes material random gains and losses across the population. People on the right who would normally run a mile from huge one off hits to society in order to create a more rational world, somehow don’t get this and support many schemes to “improve” property taxation.

  10. DocBud,

    “What would be fairer would be a “user pays” type of model where the rates paid are linked more to the services used rather than the value of the property.”

    The services used are having a ton of public money spunked on parliament and other government services within a stones throw of his businesses, which moves people there who shop in his premises. If we moved the capital, parliament, the BBC and all the arts to Sunderland, London land prices would collapse and Sunderland land prices would rocket.

    He didn’t build that value, other people did. So, businesses that depend on location, which is created by others should be taxed up the arse and creative productive business that can go elsewhere should be taxed lightly. What’s he going to do? Bugger off to Singapore with his bit of Soho? Well, I suppose he could dig up the soil and ship it, but it’s the location that has value.

  11. bloke in spain,

    Anything offbeat is on the internet now. The cost of creating a basic internet shop is something like $30/month. And you can pretty much run that part time with your own labour. What’s a physical shop going to cost to rent, fit out, staff and pay rates on in London? Even when you factor in things like postage and returns? Even if you just bin the returns?

    You know what no-one’s talking about in the UK? All this stuff. They’re all whining about fucking London and oligarchs owning the flats while there’s blokes making millions selling furniture and sex toys from trading estates in unfashionable bits of Somerset (different companies).

  12. Hey, guys
    Shaftesbury owns most of Chinatown and if it owns any (or all) of Carnaby Street that is relatively trivial. Chinatown does not compete with Amazon (when did you last buy a chinese meal from Amazon while attending a West End theatre?)
    Bickell has been chosen to make this claim because he could validly claim not to be simply talking his own book.
    The counter-arguments are valid but there is also an argument that rateable values do not reflect the up-to-date rental values of the properties if Amazon etc can make vast profits from renting their sites for out-of-town warehouses. So the Retail Consortium or whoever have rolled out Bickell to make the case because he is the guy who appears unbiased.
    PS I know Chinatown isn’t just restaurants but I’ve never seen anything in Chinatown that I should have tried to buy from Amazon.

  13. As far as I know, rates plus rent approximates to the annual value of the property. If rates are reduced, what do you think the landlords will do? Maybe the Grosvenors and de Waldens will use the reduction to get a good mix of housing, tat shops, proper shops and leisure outlets but you can guarantee that Shaftesbury and co will hoover up the difference. Ironic, given that Lord Shaftesbury was such a philanthropist. Is Brian Bickell of a similar cast of mind?

  14. @ Diogenes
    AFAIK Shaftebury plc is only related to Lord Shaftesbury through the use of his name for Shaftebury Avenue. When I was covering “Property” 40 years ago they were regarded as “good landlords”, but that is not as extensive a commitment as “philanthropist”.

  15. john77,

    “The counter-arguments are valid but there is also an argument that rateable values do not reflect the up-to-date rental values of the properties if Amazon etc can make vast profits from renting their sites for out-of-town warehouses. ”

    If shops aren’t leaving Carnaby Street, the rates are either correct or too low.

    And the comparison with Amazon is ridiculous. This is about competition for location. High street stores have lots of competition for a location and to a large extent make profits out of having exclusive rights to a location. Amazon don’t. Their nearest warehouse to London is in Hemel Hempstead on a trading estate.

  16. @Bloke on M4
    The sort of stuff Carnaby Street thinks it sells isn’t much on the internet. It’s style & style needs physical customers hanging round physical shops. It’s being seen buying it makes it style.
    I say thinks, because that’s the problem. People who sell & buy style decamped to Camden, Upper Street, Brick Lane etc years ago. For the same reason Carnaby was style in the 60s. Cheap rents, when it was a never heard of street back of Regents Street. Cheap rents enable shops to sell small amounts of stuff to people without much money. Because trend stters never have much. Being too involved in setting trends to work. Last year’s trend setters gear ends up in High Street retailers as this year’s fashions. Or Carnaby Street.

  17. Andrew C

    “In 1987 there were no constituencies in the UK with 30% or more ethnic minority populations, but it has been estimated that by 2022, the next election… there could be as many as 120.”

    Which explains May’s half-baked racial audit of pay structures. She’s prepared to feed the grievance industry in the vain hope of garnering the votes of ethnic losers.

  18. john77 – we had a rates change pretty recently, some went up and some went down. Much to the annoyance of those whose rates went up.

    I am guessing his properties are some of the rate increase ones.

    Amazon, not being idiots, have tended to go to areas where multiple factors affect their business work in their favour – quite likely including rates and rent / warehouse purchase price. Rugeley for example turned a large area into an industrial estate, amazon are a tiny fraction of the estate there – and the land was unsuitable for homes. Power station way.

    Result lots of business – some of whom may well use amazon themselves.

  19. And after Amazon drives out the High Street -will Amazon play fair.

    And will some delivery giant actually control everything

  20. Amazon started from zero, not much more than 20 years ago. If they decide to start exploiting any monopoly position someone else will move in.

    There’s nothing wrong with just giving better customer service than everyone else.

  21. If Amazon doesn’t “play fair”, someone else will come along & snatch Amazon’s market.
    I think I’ve bought two items through Amazon, in the last year. I have, however, spent €10k with AliExpress importing stuff from China. Now have a nascent business re-selling it at a 200% mark-up. Undercutting Amazon by 50% & the Spanish High Street by 60%. All for an initial investment of a grand & about 1/2 hour a day work.

  22. john malpas – amazon has millions of competitors to compete against it. If they aren’t honest those millions will take a major chunk of amazon customers.
    There’s nothing magical about amazon, they are no different to the small retailer as competition than any other large retailer is.

  23. Amazon ism’t really one single retailer. A lot of stuff on Amazon is Amazon Marketplace, independent online sellers using the Amazon ‘catalogue’, billing, and sometimes fulfilment. And Amazon doesn’t have a monopoly of that, ebay these days is very similar, not so many ‘auctions’, just a way of setting up an online business with minimal investment in what amounts to ‘fitting out the shop’.

  24. @ Bloke on M4
    The logic goes like this: if Amazon are making a fortune from their warehouse then they would still be making a profit in excessof their cost of capital if the rent was, say, doubled. So the rack rent is higher than the rent that they are paying.

  25. “The logic goes like this: if Amazon are making a fortune from their warehouse then they would still be making a profit in excessof their cost of capital if the rent was, say, doubled. So the rack rent is higher than the rent that they are paying.”

    The profit is irrelevant. The rent/rates of land are about competition: how much will someone pay to rent a warehouse in Hemel Hempstead, how much will someone pay to rent a shop on Oxford Street. If you double industrial estate rents, you may leave some empty as no-one wants them. You should bill each based on what that site will bear.

    If you applied the same logic to everything, we’d still have lots of breweries in London and Oxford instead of them being in Suffolk and Wiltshire. Why bother moving out to Bury St Edmonds if the rent is the same in Abingdon? The market encourages innovation to make better use of land and this has been going on for decades.

    And in 20 years, this will be moot. 20 years ago you had people complaining about all those crappy small food shops like VG and Spar going out of business as Tesco took over. 40 years ago people complained about well-made Japanese motorbikes destroying British junk. Despite the moral posturing, people love Amazon.

  26. @ Bloke on M4
    There are a lot of Charity shops in High Streets that are paying no rent, not so many on industrial estates. That suggests that High Street rents are above market-clearing levels and those on industrial estates are not.
    40 years ago people complained about the Labour government subsidies to the loss-making incompetent Meriden co-operative (and the political decision to cancel its export credits) wrecking the ability of the otherwise viable NVT to compete at home and abroad respectively. Japanese competition in the US market (and the US government decision to compel importers but not US manufacturers to adopt the Japanese configuratio for brakes etc) obviously had an impact as Triumph exported 60% of its output and BSA exported 80% of its output (so the rest of the world obviously liked British junk). At the time BMW had overtaken Norton as the best mo’bikes in the world but the UK industry was destroyed by Tony Benn and Eric Varley – it was only wounded by the Japanese.

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