Labour’s “High‑Street Make‑over” Needs a Hand‑On Reality Check
Labour’s recent campaign promises a five‑point “vitality boost” for local retail. The star of the show? Rewriting the whole business‑rates rule book and tightening shop‑lifting laws. They talk about swapping the old tax for a new business‑property‑tax that would supposedly level the playing field between street‑front shops and online giants. Yet the plan feels as vague as a foggy London morning.
A Woolly Tax Swap?
Labour claims a business‑property‑tax will cover the same revenues as today’s business rates – which pull in £30 billion yearly for local councils to pay for roads, waste, and that old “pigeon‑free streets” campaign. But what exactly will the new tax measure? Who will pay it? When will it roll out? The answers are missing. John Webber, Colliers’ head of business rates, calls the lack of detail “highly worrying” – especially with the General Election right around the corner.
To put it bluntly, we’d like to know what the new tax looks like before the election’s out of the window.
Current System: A 55% Tax Burden
Colliers notes that the legacy system has a multiplier of 54.6p in the £, effectively a 55% tax on local businesses. In the rest of Europe, no other country hits the 60% mark for business property taxes. Webber warns this level is “unsustainable” and deters investment, making the high‑street a sadly shrinking business hub.
Are 2022 Promises Enough?
Past Conservative leaders have pledged reforms that instead made the tax even more expensive. Labour’s “breathing new life” pledge is encouraging, but without a concrete plan it’s difficult to judge the impact. Webber stresses:
“Labour wants to inject life into our high streets, but until they explain their actions, we can’t take the promise seriously.”
Labour also says no public services or local authorities will suffer. But how could they be certain without the detail?
Possible Tax Paths (and Why They Might Fail)
- Land‑Value Tax (LVT): This would value land and lease assets separately. Colliers says it could only hurt landlords if they simply raise rents to cover the new charge. Businesses would pay more, just as the old system had them, but they’d lose the ability to appeal.
- Digital Services Tax (DST): Labour once floated a £3 billion tax on tech giants, only to pull back to avoid a trade war. The same would hold for any smaller infractions aimed at leveling the playing field.
- Empty‑Property Relief: Labour wants to tweak a “shops bonus” – a three‑month rate holiday for new shops after a 12‑month lease lag. Colliers says landlords already have a gap, and unlocking funds for new tenants doesn’t make sense. The patchwork fix might actually do more to muddle than help.
What Colliers Actually Wants
Webber proposes three practical reforms:
- More frequent revaluations to keep rates aligned with current market conditions.
- A lower multiplier that eases the tax load on businesses.
- Incentives for empty‑site development and greener upgrades – so high streets feel healthier, not just financially brighter.
“The law shouldn’t be an obstacle to growth,” Webber says. “It has been around for centuries; we need to tweak it, not dismiss it.”
Bottom Line – Clarity First
Labour’s “business‑property‑tax” is a great shorthand but currently shrouded in mystery. Colliers warns that businesses – especially international retailers – will only invest if they understand the tax landscape. Without a clear roadmap, they’ll look elsewhere.
We’re calling on Labour to open the curtain and set a concrete timetable. Businesses deserve a predictable environment, and high streets deserve a future that isn’t just a slogan—unless we’re ready to carve out a real, practical plan before the election ends.
