The centre of Middlesbrough has never been the most glamorous on the planet.
Linthorpe Road is a threat to London’s glitzy Bond Street and Paris’ chic Champs-Elysees.
It holds happy memories for me of the shop where my school sports kit was purchased, and the impressive department stores that dominated the prime locations.
Last weekend, my parents and I were both struck by the sadness of how it had declined.
Debenhams, once located in the middle of the town, has now closed.
Mike Ashley, the owner of Sports Direct, bought the independent designer clothing shop that I loved in 1980s.
The burdensome business rates regime has at least some responsibility for how the streets and arcades of my childhood changed so dramatically over these past two decades.
And my home town’s retailers, pubs, restaurants, and other outlets, as well as similar outlets throughout the country, hoped to receive relief from Rishi’s fall budget.
They will be delighted to hear that he offers a 50% discount on their next year’s bills.
Firms wanted Chancellor Rishi Sunak’s announcement of a wholesale reform in business rates. This is the most hated of all corporate taxes in a highly competitive area, says RUTH SUDERLAND
It adds up to a saving of £1.7billion for 400,000 outlets, which is not to be sniffed at.
Regrettably though, feelings of gratitude can be tempered with disappointment.
Firms wanted Rishi to announce a massive reform of business rates, which are the most hated corporate taxes in a highly competitive market.
Traditional retailers are often hit hard by business rates.
They account for 25% of total business rate revenue but only 5% of our GDP. This inequity will continue after the Budget.
Yes, Rishi has corrected some obvious errors and absurdities.
He has stopped an automatic inflation increase that would have saddled companies with a £1billion tax hike next year.
He is getting rid of ludicrous rules which slapped retailers with bigger bills if they installed solar panels or amenities which increased a property’s value – and therefore ‘rateability’.
He is also reducing the time between property revaluations from five to three years. This was previously a practice that produced wildly inaccurate results.
Taken as a whole, his changes amount to savings for firms of £7billion over five years.
To put that in perspective, at the current annual level of £26billion, firms would pay total business rates of around £130billion in that period.
It may seem silly to criticize his constructive approach. While firms may be happy to see their bills reduced by half for 2022, they know it is only temporary.
Once the year is up, the long-term challenges in places such as Middlesbrough will still be there – and unless Rishi takes further action fast, so will over-complex and burdensome business rates.
RUTH SUNDERLAND: Carrying on with a fundamentally broken system is a deterrent for a new generation of shops to flourish in their place
A broken system can be a deterrent to a new generation of shops that want to thrive in its place.
While the Budget measures may look great on the surface, closer inspection reveals that they are far from the overhaul needed.
Although the Chancellor has provided some much-needed reprieve, he hasn’t addressed the fundamental injustices embedded in the system.
A new online sales tax was proposed to level the playing field between brick-and-mortar shops and internet operators, who pay relatively small rates. However, this idea has been discarded.
High street retailers will continue paying much more than online companies like Amazon and will therefore remain at disadvantage.
This is causing serious concern. This is causing serious concern for food retailers.
Last week, I was told by a chief executive of a major grocery chain that the unfairness of the business rates regime is making the situation worse.
How can he hire the employees he needs, he asked despairingly, when there is an Amazon warehouse down the road offering £3,000 signing-on bonuses?
RUTH SUNDERLAND: If he continues in the same direction, Rishi could be the one to breathe fresh life into our high streets (Pictured: A man walks past an empty shop which displays a ‘To Let’ sign in the window on May 12, 2021 in Newcastle-Under-Lyme)
While companies are happy that their bills were halved in 2022, they are acutely aware that it is only a temporary reprieve. (Pictured – A Debenhams shop on the day it shuts down for good on May 15, 2021, Cardiff)
He said that they could only afford it because their business rates were so low. “I’m not in the position to compete.”
His company will not even benefit much from the 50 per cent discount because relief is capped at £110,000 and his bill runs into hundreds of millions.
It is not all doom and gloom in Middlesbrough on the retail front.
Local entrepreneurs have opened quirky, independent businesses in the town’s heart with brightly colored frontages that would look great in London’s chichi Notting Hill.
These brave entrepreneurs will be the ones who receive the help Rishi extended in the Budget.
Let’s pray that these are not the Chancellor’s first steps in releasing companies from the tax curse.
Rishi could be the person to bring new life to our high streets if they continue in the same direction.