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The rot is setting in, will a new government help the High Street?
Friday, 1st November 2019 14:01 - by Shant
Due to the Brexit impasse, the Conservative government led by Boris Johnson saw little alternative but to push for a general election, and after a shaky start to the week, we finally saw the House of Commons delivering a majority verdict to conduct a snap election on the 12th of December. This Christmas run in will be like no other, but if we are to finally to end this crippling saga of how, when and even if to the leave the EU, then this seems - and seemed - the only 'way out'. As it stands, the Tories are in the lead in the polls (40% to 28% according to the latest), but if recent history is anything to go by, then we should put little stock in these numbers and especially so at this early stage.
That the election is a de facto second referendum is now widely established, as the elephant in the room is pretty hard to miss. With the LibDems and the SNP campaigning to reverse the decision to leave the EU, the stakes are now higher to concentrate on pressing matters, which is - for both the Tories - the adherence to the 2016 EU referendum. It is safe to assume that any going back at this stage would have even deeper divisive impact on the UK, and this would explain Labour's stance of sticking to the mandate delivered by 'the people', but with the attachment of a second referendum to any deal that is proposed and agreed on by the EU.
Needless to say, MPs and the public alike would like to see some finality to this process which again, is worth reiterating, takes us onto the next stage in the negotiations with the EU. The future trading relationship has many more layers to work through, and as I have mentioned before, it has taken the EU and Canada 7 years to complete its talks over a trade deal. In short, even after the election - this ain't over! It will however, and it needs to free up some time in order to address other urgent matters impacting the UK. It is easily forgotten that outside of Brexit, the global downturn will impact on the UK as it will everywhere else in the world, albeit to varying degrees.
One area that will need urgent attention is the High Street, and this week, former Sainsbury's boss Justin King pressed for the govenrment to take measures to ease some of the ever increasing pressures hitting 'bricks and mortar' retailers. Talking to the BBC, he suggested business rates be halved for onsite shops, alongside an increase in VAT to 22%. This would help level the playing field with rival online retailers, who are also benefiting from the same services which are being paid for by High Street business rates. Fair point. Access to roads, sanitation and other lesser acknowledged costs are all avoided by 'onliners' and it seems the only way that there can be fair price competition in this respect, is through a change in the taxation system.
Indeed, this seems to be the only way to stem the rot which has been ripping through the UK High Street in recent months and years. While some shop/business closures have not been entirely based around profitability, the issue of business rates has has been a contentious one, with retailers having raised concerns for over how this bites into the bottom line for some number of years now. The list of notable names in the UK having fallen by the wayside seem to have passed many of us by, but looking past Thomas Cook, we have seen Maplins, Karen Millen and Coast, LK Bennett, Oddbins, Bathstore and Pattiserie Valerie to name a handful, but which also highlights the dversities of businesses falling under the cosh.
Based on the net effect of the measures suggested by Mr King, ie little change to consumer prices, it seems common sense would lead a new government to think on these policy changes. It is clear from the trajectory of close-downs seen in the past year to 18 months, that action is need sooner rather than later - and that may seem like an understatement to many. However, the impact of Brexit is therefore magnified by the degree of how aversion to pressing domestic issues. Let's hope this election resolves Brexit once and for all - for all our sakes!
The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.