Ailish Christian-West, president at property industry body Revo, calls for the government to support retail property owners to stop the “long-term decay of high streets”.
We are facing a once in a generation situation – a global public health crisis which is likely to become a global economic crisis.
At this time our health and wellbeing – and that of our loved ones and neighbours – is of paramount importance, but action is also needed now to mitigate the economic fallout once the spread of Covid-19 has been controlled.
The retail sector is one of the UK’s leading employers, supporting almost three million jobs and contributes £21bn to the Treasury every year. As we have been reminded this week, shops are at the heart of communities, providing essential goods and services to us all, but elderly and vulnerable people in particular.
Last week the chancellor made a bold intervention on business rates, recognising that this fixed cost is likely to drive thousands of UK businesses, including many retailers, into insolvency. Revo has been campaigning for reform of business rates for a decade and Tuesday’s news is a welcome first step.
However, the government still hasn’t acknowledged the crucial point, that in the longer-term there must be a level playing field in how we tax physical and online retail, and businesses selling goods online must contribute more to fund the roads and infrastructure they use. More importantly, we fear the emergency measures announced do not go nearly far enough to keep retailers trading through this crisis.
The business rates freeze will reduce costs but given the government’s guidance to avoid public places, and consumer spending likely to seize up, most retailers will still face severe cash flow issues. To address this, we urge the government to follow other nations and provide direct support for consumers to alleviate pressure now and ensure our consumer economy continues to function.
Furthermore, we need direct financial support for retail property owners, who currently are expected to bear a huge amount of the financial pain. Retailers are asking for rent cuts to help them continue to trade, and we know property owners are being as flexible and accommodating as they can be, within their own operating constraints. It is overlooked that property owners have their own obligations to investors and lenders, and a sudden cut to their rental income has the same ultimate result: the immediate closure of shops and services, and the long-term decay of high streets and town centres. If the Treasury is considering support for airlines, it must also listen to the case for supporting retail landlords too.
Amid all of the unsettling news this week, there have been countless examples of retailers – the grocery sector in particular – working even harder to serve communities. We have seen retailers and retail place owners and operators putting commerce aside, offering their resources to help the national effort, supporting food banks, offering childcare support, free parking for key workers to name just a few examples. Physical retail is much more than bricks and mortar, at this time it is a critical distribution point for goods, services and support for our communities. Physical retail must be recognised as part of our national infrastructure and must be saved.