The high street is collapsing. Here’s how to save it

If you look around our towns and cities there are some thriving places but there are also large areas where decline is all too obvious.

Pubs and restaurants shut, longstanding local traders gone, another Vape shop.  Metal shutters, litter, graffiti, decay. Depressing during the day, enough to give you an uneasy feeling in the dark.

Economic change is inevitable and with that change some industries prosper and others do not.

What is different about our high streets is that they are also part of our social fabric.  The small pub which you can walk to to see your friends, a great family run butcher, a gift shop where you can have a chat as well as buy something.  These things have an importance which goes beyond economics. Nobody wants our high streets to decline but they undoubtedly are. 

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Unfortunately our Governments, both UK and Scottish, seem intent on doing all they can to destroy the high street and particularly the hospitality sector.

Shops and pubs employ a lot of part-time staff so dramatically lowering the point from which Employers National Insurance must be paid, as Rachel Reeves did in her first budget, is not just a marginal cost increase but a very large one.

Commercial Rates.  What are they actually for?  As an individual who pays Council Tax you can at least see that you get some services.  Businesses get very little in return for the large amounts of rates they pay, it's just easy, lazy taxation on businesses rather than voters.  The recent rates relief packages from both the UK and Scottish Governments barely scratch the surface.

If you buy a meal in a pub you pay 20% VAT.  Once upon a time in a supermarket you could only buy ingredients for a meal but now you can buy a high-quality sophisticated meal, just pop it in the oven and voila - no VAT to pay at all.

A van can turn up to your door tomorrow to deliver the trivial £5 item you think you need and bought online today.  Relative to a traditional retailer the van and the big warehouse it comes from pays very little tax.

What has happened is that the tax system has not kept pace with the change in the way the economy works and people do things.

Governments tinker with the tax system rather than reform it more radically in order to reduce unfairness.

Our local high streets matter, they are in trouble and they need help.  A package of assistance is needed and might look something like this.

First, reduce the rate of VAT on all food sold in pubs and restaurants to 10%.  If the Government thinks it cannot afford the tax revenue loss from this then put 10% VAT on all ready meals sold in supermarkets as well. 

Second, up the allowance of £10,100 which businesses get against their Employers National Insurance bill to £25,000.  By doing this small businesses will get real help with their costs.

Third, replace commercial rates with something else for all buildings in which there is trading with the public.  Keep rates for things like offices and warehouses but get rid of them for what are essentially retail outlets.  Replace the lost tax revenue not with another imposition which cancels out the benefit but with a new delivery tax.  If something is delivered to your door you get charged a flat £5 tax.  Balance these things correctly and there would be no loss of tax revenue and a boost to the viability and vibrancy of our high streets.

You can point to each of these suggestions and say this is wrong or that won’t work but that misses the point. Our Governments need to have the courage and the will to actually do something rather than just wring their hands as hundreds of pubs and shops shut each year.

The high street matters and action is urgently needed to support it. With some imagination effective action could be taken at little or no cost. 

Guy Stenhouse is a notable figure in the Scottish financial sector. He has held various positions, including being the Managing Director of Noble Grossart, an independent merchant bank based in Edinburgh, until 2017