News of her latest tax grab plan (there’s always another) – a £1.7bn raid on the high street in the form of increased business rates – was barely hours old and isn’t due to be implemented until autumn.
Yet it is already abundantly clear that it will amount to a spectacular own-goal. More empty shops, even higher prices and thousands of job losses will be the cost of the bumbling Treasury’s short-sighted raid.
The move is intended to level the playing field by charging those with bigger premises more in order to reduce the rates paid by smaller stores.
Yet as unpalatable as it is, the sad fact is that big business will ruthlessly protect their bottom line with price rises and sweeping cost cuts. The real losers then will be customers, employees, and our already dwindling town centres, not the companies themselves.
Mr. Marlow’s powers of analysis are unmatched. It’s landlords, not tenants, who carry the burden (no, not pay the cheques) for business rates.
Ultimately, yes, but not in the short term, while rents are fixed. How about switching rates to the landlord, and ending upwards-only contracts?
“The move is intended to level the playing field by charging those with bigger premises more in order to reduce the rates paid by smaller stores.”
But that isn’t levelling the playing field. That’s putting the thumb on the scale in favour of smaller shops. That makes us poorer. There’s efficiency to Tesco over old grocer’s shops. More efficient ordering, stock control, staffing. It’s why we got rid of them. Thresher’s don’t exist because you want some regular booze, go to Tesco. The wine shops that exist are about niche products and service.
Everyone says they want darling little butchers, ironmongers and cheese shops but revealed preference is that they don’t. Cheese shops exist in the sort of places that are full of affluent MILFs and tourists like Bath and Cheltenham. People who have the sort of dosh to buy cave-aged cheddar at £15/lb instead of Cathedral City for £5/lb.
Everyone says they want darling little butchers, ironmongers and cheese shops but revealed preference is that they don’t. Cheese shops exist in the sort of places that are full of affluent MILFs and tourists like Bath and Cheltenham. People who have the sort of dosh to buy cave-aged cheddar at £15/lb instead of Cathedral City for £5/lb.
Try going to France. My small town in Dept Nord had all of those in plural & an E-LeClerk & Carrefour. And have you seen the size of French supermarkets & the ranges of products they offer? You could lose a Tesco in one. And we were hardly a wealthy area. Little tourism. Few ostentatious houses. Cars mostly over 10 years old..
I’d say one of the reasons was ease of parking. You can park anywhere that you’re not actually causing a major problem. And where payment is required it’s cheap for periods up to a couple of hours but then becomes progressively more expensive.. French towns aren’t hostile environments.
People who have the sort of dosh to buy cave-aged cheddar at £15/lb instead of Cathedral City for £5/lb.
Perhaps another reason. France has hundreds of cheeses, not just a couple of dozen. And excluding Presidente etc, most of them would fit the description of the cheddar. My favourite in that locality is Mont de Cats from a small herd of cows tended by Trappist monks. Quite affordable.
The landlord/tenant incidence is only relevant if the premises are rented.
As someone currently trying to buy an engineering workshop with a rateable value of £58k, I get to shovel the government ~£32k/year for the privilege from the day it becomes mine. It’s actually the single most difficult part of the deal to make the finances work, as it’s a massive day 1 cost which has to be covered from cash flow whilst in the midst of moving and installing the business.
Surely shoppers carry the burden of business rates for a retail shop? Regardless of who owns the premises.
Britain is not quite up there with France, but produces more than 700 different cheeses. However, they are not easy to access because the idiocy of the British state means it is impossible to run an independent local cheese shop outside of a prosperous town of reasonable size. Rents, tax, regulation and the war on the car all combine to make it impossible.
Despite strong competition, Marlow is the thickest business hack on the Terriblegraph and quite probably the British media, he is the Richard Murphy of business journalism.
There are not far shy of 1000 British cheeses.
Sorry Marius – you beat me to it.
And have you seen the size of French supermarkets & the ranges of products they offer?
Quite a lot this year and in a number of different areas and learning the differences has been an interesting experience:
1. Humous to be found in the fridge alongside smoked salmon, trout, prawns and the like in a couple of them.
2. Muesli to be found in the Bio section not breakfast cereals (sort of makes sense once you get your head round it).
3. Couldn’t buy grapes and the of odd time we came across them they weren’t very good quality and very expensive.
4. ditto other soft fruits such as strawberries
5. Mandarins were none existent and we had to buy bags of a dozen oranges which is a space problem.
6. They have good diy and gardening sections. I was able to get a replacement hosepipe adapter that I’d left on a tap when filling the water tank in one rather than having to hunt down a DIY store
6. Overall very spacious and airy with lots of checkouts.
My favourites, though, are still Danish supermarkets because they didn’t have any music or announcements blaring away, they were so calm and peaceful.
Surely Professor Murphy is a match for Mr Marlow?
Western Bloke
Observed preference in my small/modest-sized town is that we do want a butcher. Getting on for (but a bit less than) forty years ago Rick set up an independent butcher’s shop shortly after Dewhurst closed their shop leaving us dependent on Tesco or travelling to the next town. He has supplied better quality, locally sourced meat* and eggs (supplied by farmers’ wives) at a (mostly modest) premium over Tesco’s or Sainsbury’s prices and built up a solid base of loyal customers. Starting as a one-man-band he has grown the business, hiring an apprentice after a few years, then another when he left; for the last four or five years he has had two assistants (partly growth of business maybe partly because he was aging) and just before he reached 70 he retired handing over the business to them.
Years ago we used to also have a specialist cheese shop, built up by a cheese enthusiast whose wife’s day job as a civil servant probably paid their mortgage etc. Sadly he chose the wrong people to sell the business to and they ran it into the ground.
The family-owned ironmonger was a feature of the High Street for a century until the last family owner wanted to retire and sold it to a couple of women running a shop opposite: again they quickly ruined it.
IMHO we do want butchers, bakers, cheese shops and ironmongers, but only *good* ones.
*except the haggis for Burns night which comes from a recommended supplier Scotland
Nautical Nick said what I was going to say.
Tie this in to previous discussions here about retail chains declaring bankruptcy to get out of onerous leases.
Yes, in the long term rates are borne by the landlord, but because of how commercial leases are structured, in the short to medium term (until rents have adjusted) rates increases are borne by the business tenant.
And the lease tie-in means the only solution is t close the business and declare bankruptcy. Possibly re-starting with a new, lower rent, lease, but still closure first.
British cheeses – there used to only be three, because farmers had to sell all their milk to the government-monopoly Milk Marketing Board, and they only made three cheeses (cheddar, Stilton, and I might be wrong about the third). Later they added the utterly dreadful Lymeswold, but there’s no way that can be described as an improvement.
The later explosion in hundreds of artisan cheese makers is purely thanks to the blessed Lady Margaret, who removed the monopoly to howls of outrage from the lefties who now love to buy them.