If you live in a grubby old house, and there is a dead mouse on the kitchen floor do you blame the cat for killing the mouse, or do you say the problem is a bit more serious than that? The High Street has some problems. This weekend the ‘Telegraph’ paraphrased a government minister saying the High Street was dead. The solution, however, is not to make online retailers pay more tax any more than killing the cat will solve the problem of a mouse infested house.
It is little harsh to say that Nick Boles, the planning minister, said the High Street was dead when what he actually said was :“People's shopping habits are changing very fast as a result of the rise in internet shopping and changes in lifestyle and working patterns.” He continued: “We need to think creatively about how to help town centres thrive in this new era. We want to encourage local councils to concentrate retail activity into the prime shopping streets in the heart of their town centres and adopt a more relaxed approach to underused retail frontages.”. See: The traditional high street is dead, says minister
It might be more accurate to paraphrase him as saying: “The High Street is dead long live the High Street.”
So Mr Boles wants to see more unused retail space turned into homes. He is surely right. We don’t have enough homes in the UK, but we do seem to have an abundance of retailers struggling to make a living. And if more people lived on the High Street, maybe we would see new stores opening up to cater to their needs.
But Sainsbury’s and Morrisons’ big idea is to tax online retailers. Last month Sainsbury’s boss Justin King said: “The burden of taxation in the UK falls very heavily on bricks-and-mortar retailers versus internet only retailers.” He said: “For every pound that we have saved [as a result of corporation tax cuts] we have paid around £2.50 extra in other taxes, primarily business rates. If the tax burden falls ever more heavily on those businesses that have real presence that is something that has to be addressed.”
But does that sound like sour grapes to you? Isn’t one of the key USPs of internet retailers that they don’t need expensive high street positions? Instead, for them, position on Google is more important than the real position defined by bricks and mortar.
To tax online retailers more, seems ever so slightly as if Justin King wants to follow the tactic adopted by a previous King, a certain King Canute.
© Investment & Business News 2013