The Chancellor Philip Hammond announced that:
The government will provide £675m to create a “future high streets fund” that councils can access to redevelop their high streets.
There will be a business rates revaluation in 2021 but to provide relief in the meantime, for the next two years all companies with rateable value of £51,000 or less will have their business rates bill cut by one third. A saving for 90% of shops, restaurants and cafes.
Reaction from Chiswick businesses
Anette Megyaszai who runs the cafe-restaurant Chateau says the one third saving will make a big difference to her. She currently pays nearly £17,000 in business rates each year so it represents a saving of nearly £6,000. At a time when “all other business overheads are going up” she says – “employment and utility costs” for example – “this is a decent saving, it will give us a bit of a breathing space”.
Lin Leung, co-owner of homeware shop Decorexi told me: “We welcome the Chancellor’s announcement to cut business rates for small businesses and hope that Hounslow council pass on any reductions without any undue delay. This help will undoubtedly boost the local economy and once implemented, will give much needed instant relief to all small local business groups. It’s certainly a step in the right direction as there is nothing worse for a business or resident than to work and live amongst redundant retail space. We’re looking forward to a more positive 2019 surrounded by other vibrant businesses on a revived Chiswick High Road and it cannot happen soon enough!”
Mike Moran, who runs Top Hat, the dry cleaners in Devonshire Rd, welcomed the reduction. His business rate should go down from £15k to the £10k he was paying two years ago. But he warned that the Government needed to come up with more than a temporary fix. “We’ve had this two year relief before and yes it helps but the Government needs to fix the business rates we pay properly or the high street will continue to die off”.
David Lesniak, co-owner of Outsider Tart cafe said: “The problems facing the High Road are systemic. This is sticking a finger in the dyke while the pressure builds behind it”.
The Chancellor himself noted that the fundamental change to our high streets is “irreversible” and said businesses needed time to adapt to the change. The CBI’s chief economist Rain Newton-Smith told the Guardian there was far more intervention needed to save UK high streets. “The roots of the problem go far deeper… There must be a wholesale review next year”.
John Farrant, who runs Greige, the homeware shop at Bedford Corner, says “Our little corner has gone up 200% since last April. It will help us a little; we are now back to where it was pre – 2016”. For him one of the most upsetting things about business rates is the apparently illogical and unfair way in which they’re set.
Huge variation of business rates in Chiswick
John has made up this map by going to the business rate GOV site and putting in postcodes of random Chiswick shops to find out how much they are charged per square metre.
“We are struggling to say why is Bedford Corner more expensive than Bedford Park Corner… who didn’t get an increase (£350 compared to our £750)… Rates should be based on a number of things and footfall should be one of them”.
“Fiddling while Rome burns”
Cllr Joanna Biddolph, who with colleagues has set up the Chiswick Shops task Force says the business rate cut will catch quite a lot of Chiswick’s independent shops “but some, especially those who have negotiated new rents over the last year or so, will miss out because those deals were far too high. I would have liked to have seen a higher value for London and other large cities and towns where rents are higher because of their location”.
“In my view, it’s not enough – in terms of the amount saved and the length of time this reduction will be in place. Smaller businesses always look ahead – their lives depend so directly on their businesses – and two years of relief might only be long enough for them to decide now whether to continue for another two hard years or pack up now. A long term change would give independent business owners more comfort and encouragement to carry on. It would also encourage others to set up. No-one invests so much money in a new business for two years.
Instead of announcing a restructure of the way businesses are taxed, he fiddled while Rome burns. The Chiswick Shops Task Force will keep up the pressure on ministers, and Hounslow council, to be bold and brave, to do more than fiddle with a system that needs wholesale change that encourages small businesses to set up and continue”.
Cllr Biddolph adds: “There was another lost opportunity, too. The Chancellor missed a chance to encourage everyone to shift their thinking about how they buy. In announcing the welcome digital service tax, he has assumed that everyone lives their lives digitally – and that all independent businesses face competition from digital businesses. That is not true. Some do. Some don’t. Everyone in the retail world is talking about retail success depending on experiences. These experiences cannot be experienced online. It’s about retailers changing what they offer – and us appreciating that offer (what we want should inform what retailers should provide – it’s a neat virtuous circle).
“I would have liked him to say he hoped everyone would support their high street shops, to shop in local independents, to get out from their screens and out into shops, pubs, cafes and restaurants. He has (apparently) said he’s an Amazon shopper. He could have name-checked his local shops, indicating that he shops at them too. He could have emphasised the extra pleasure we experience when buying from an independent trader – being remembered, a chat, touching or smelling what you want to buy. You can’t have your nails done or have your hair cut, or beard trimmed, online.
“You can’t do yoga, taekwondo, or work out online. You can’t smell the sweetness and flavour of a tomato or piece of fruit when it’s wrapped in supermarket cellophane but you can when buying from a stall or greengrocer. Such an influential occasion, such an important speech, such newsworthy announcements – with no nudges to shift our thinking and our behaviour to encourage us to use the high street shops – the independents – that need and deserve our support. A lost opportunity. These are on the list for the Chiswick Shops Task Force to do – but a national nudge was needed, too”.
£675m high street fund
She says also that the £675m high street fund is welcome but it will depend on how much is allocated to Hounslow, how much of that is allocated to Chiswick and how much Hounslow council listens to what independent traders – wherever they are in the borough – need. “We can all remember the way having a town centre manager failed Chiswick – a year of potential improvements lost, never to be replaced. Imposing ideas proposed by people with absolutely no experience of setting up and running a small independent business is the wrong way to go. The Chiswick Shops Task Force is ready to help Hounslow consult with local independent businesses in Chiswick on how it should spend its high street improvement fund to ensure that the money is well and effectively spent to benefit local independent traders.
“In some areas, turning retail units in Chiswick into residential units might not be the right thing to do. The fund should be spent on maintaining Chiswick’s character – much of which comes from the fact that it has so many independent local shops that make it different from other areas”.
Responsibility for the business rate is transferring to local councils
What is the likelihood that there will be a longer term solution for business rates?
Cllr Gary Busutill says: “On the face of it, small independent businesses on Chiswick High Road are set to benefit in the short term. However in the 2020/2021 financial year the responsibility for business rates are due to be transferred to local councils. With cash strapped councils needing funding to provide services, depending on what restrictions are placed on councils to raise these rates in the future, it is possible any short term gain for local businesses could be wiped out when business rates responsibility is transferred”.