Labour must stop taxing stores to oblivion if it wants to save the High Street

We have to find a way of reviving the High Street. We all know this, and it is profoundly depressing to walk down a once-thriving town centre, only to see a string of boarded-up storefronts, interspersed with a few charity shops.Andy Burnham understands this, saying they have been ‘hollowed out’ by vape stores, betting shops and rogue businesses. He’s announced a string of measures supposed to revive them, including closing planning loopholes, shutting ‘dodgy businesses linked to organised crime’, and giving local people ‘a real say over what opens on their High Street’.It all sounds fine until you look at the detail. Retailers are deeply critical of the Government’s policies so far, especially the rise in business rates, fuel costs and additional labour costs. Helen Dickinson, head of the British Retail Consortium, put it bluntly: ‘Retailers don’t need warm words, they need lower costs.’Mike Ashley, the founder of Sports Direct who now owns a string of brands including House of Fraser, Jack Wills and Gieves & Hawkes, was even more direct. More taxes: Former Chancellor Rachel Reeves upped employer national insurance contributions He wrote to Burnham saying: ‘If your answer is to tax larger retailers even more, through hiking business rates on retailer-owned or third-party warehouses while reducing rates for pubs and clubs, then that is simply delusional.’I don’t think suppliers to Harvey Nichols will see Ashley as a hero. Taking over the assets of the glitzy emporium from administrators for £43million may be a nice deal for his Frasers Group, but unsecured creditors are owed £270million and it looks as if they will get back just 15p in the pound. This is far from the world of vape shops, however at both ends retailing is a brutal old trade.But Ashley’s word ‘delusional’ hits the mark. Ministers can bang on about what they don’t want on the High Street, but they have zero experience of what it feels like to run a business. Most of the stuff announced is about shutting down unwanted activity, and governments know how to do that.But the vape shops and gambling outlets move into vacant premises because no one else seems to have use for them. Governments can’t start things up.So what’s to be done? Well, let’s start with a bit of good news. The proportion of non-fuel retail sales that are online is no longer rising.In 2019 it was 19 per cent of the total and shot to a peak of 37 per cent in February 2021 during the winter lockdown, but is now stable at about 28 per cent. So the damage to the High Street from the pandemic, which has been huge, is no longer getting worse. The next thing is governments need to appreciate that what look like small changes to tax and regulation have huge knock-on effects on small businesses.That rise in employers’ national insurance contributions brought in by Rachel Reeves in her first Budget got huge attention and we can now see it cost upwards of 100,000 jobs in hospitality and retail. But that’s the big story. Often it is small changes, such as parking restrictions, that become a tipping point leading to a High Street business shutting down.Each time a shopper gets a parking ticket, that’s one person who’ll try to avoid going into town and may order online instead. Take low-traffic neighbourhood schemes. The evidence is mixed but it seems clear that they have on balance hit retail trade. Cafes and restaurants may be neutral or in favour, but many retailers selling goods rather than services claim a serious loss of business.That leads to a final point. The High Street has always had to adapt to changing economic pressures. Renowned property developer Stuart Lipton recently said city centres had to move beyond traditional retailing arguing: ‘We can’t out-Amazon Amazon.’So they have to become mixed-use places: retailing, hospitality and other services, and also ‘civic infrastructure’ – that’s surgeries, workspaces, cultural activities.I’d add that they should be places where people, particularly the young, want to live.As for the Government, I suggest that the Prime Minister and Chancellor should remember the Hippocratic Oath, in short form: ‘First, do no harm.’Unlike your predecessors.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you