Labour Manifesto singles out online giants

By Liza Helps Property Editor Logistics Matters

THE MANIFESTO states: “The current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets.

“In England, Labour will replace the business rates system, so we can raise the same revenue but in a fairer way. This new system will level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship.

While lacking in detail exactly how it will reform business rates to make them fairer and less onerous on the high street, the inference could be interpreted that ‘online giants’ which carry out business entirely from distribution warehouses will bear the lion’s share financially of any reform.

A similar distinction was made in the Conservative manifesto where it looked to increase the multiplier on business rates for online enterprises.

Home delivery expert Parcelhero Head of Consumer Research, David Jinks noted: “Both parties do address many of the issues facing SME’s, retailers, manufacturers and their logistics and courier partners. However, it’s vital that both parties’ pledges, particularly over issues such as taxation, don’t end up penalising retailers that have developed an integrated e-commerce and High Street approach to sales.

“We agree with Labour that the current business rates system disincentivises investment, creates uncertainty and places an undue burden on our High Streets. We are very pleased to see that, at least in England, Labour will replace the business rates system, so it can raise the same revenue but in a fairer way. However, by saying ‘This new system will level the playing field between the high street and online giants’, Labour is in danger of missing the point that many successful businesses, from Next and John Lewis to small local independent retailers, all realise that an integrated High Street and online policy is best. The High Street and online are on the same playing field, playing for the same team.

“With the Conservative manifesto, we like the commitment to a business rates support package worth £4.3 billion over the next five years, to support small businesses and the High street. However, the manifesto says this will be achieved by increasing the multiplier on distribution warehouses that support online shopping over time.

“Again, it’s vital any party in Government recognises that successful companies will have physical stores and distribution warehouses to support their e-commerce activities. Cutting High Street rates by increasing warehouse rates is robbing Peter to pay Peter.

“A stable economy will help the post-Covid realignment of the retail sector that is key to transport & storage companies’ own success. It will be those retailers with strong in-store and online sales that will ultimately triumph in a post-Covid world.”