Seconds after chancellor George Osborne finished unveiling his budget for 2013, my inbox was awash with outraged comments, complaining that yet again the high street had been overlooked while other sectors secured tax breaks and investment.
Variously describing it as a slap in the face, two fingers, a missed opportunity, or simply disappointing, the immediate response was one of dismay.
It’s easy to understand, as with retail failures on the increase and vacancy rates higher than they have been for many years, there is a genuine need for intervention. When you consider that economic growth forecasts were halved today, one might have thought a boost to the country’s high streets might be high on the agenda, but the consensus appears to be that this was a budget with very little change to government expenditure.
Many had been pinning their hopes on a freeze on onerous business rates, which are set to increase by 2.6% in April, with a longer-standing desire to change the way they are calculated to a less arbitrary one than the current system.
Drapers’ sister publication Retail Week has been leading the charge on the campaign – and continues to do so – but for this budget at least, those voices have been ignored.
There are, however, some positives that can be taken away. For indies out there, the news that employers are to receive a £2,000 allowance towards their National Insurance contribution represents a small weight off their balance sheets.
As the Forum of Private Business’ head of policy Alex Jackman said the move will “either incentivise employers to take on more staff, or to take the saving and boost their profitability. For many small firms who’ve been operating on extremely small margins the latter would be welcome relief”.
The 1% reduction in Corporation Tax is also to be welcomed, as it will shave off a decent amount paid against profits. But as the director general of the British Retail Consortium Helen Dickinson points out, this will aid “internationally mobile companies, which can move their capital from country to country” more than smaller domestic firms.
“For retailers business rates and people taxes are much more significant. And remember, corporation taxes are on profits. Little is paid in lean years. But rates are on property and rise relentlessly regardless of company results.”
Other measures, such as the scrapping of the fuel escalator and the bringing forward of the £10,000 tax-free personal allowance are likely to have knock-on effects in the retail sector, but there is no guarantee that money will be spent in the high streets.
All in all, the bottom line is that there is little here that will help those retailers already struggling, or even those on the brink.
Perhaps another measure, promising to make it easier to convert retail property into residential, gives a glimpse of the government’s thinking when it comes to the future of the high street. Undeniably it’s better to have people in homes than streets full of empty units, but far from “breathing life into our high streets”, as the British Property Federation argue, it may well be another barrier for the UK’s shops.