Hammond’s high streets: the chancellor’s measures don’t go far enough

Perhaps there should be just one cheer for Philip Hammond’s Budget in an atmosphere of political uncertainty and fractious voices, writes Melanie Leech, chief executive of the British Property Federation.  The chancellor delivered a political Budget that nevertheless demonstrated that he has listened to business voices. He announced measures such as a five-fold increase in the annual investment allowance from £200,000 to £1m, designed to support investment and growth particularly in the SME sector that is so vital to innovation.   Productivity was also a key theme, with roads the big winners on the infrastructure side and an increase to the National Productivity Investment Fund announced.  Close to home, although some of the Budget’s key contents had been widely trailed, the chancellor delivered a genuine surprise in the form of a new tax relief for capital expenditure on non-residential buildings: great news for those who develop and refurbish.  Less welcome was a restriction on the use of capital losses, effectively turning loss-making investments into even more costly propositions by denying investors the ability to fully offset those losses against profits from other investments.  SDLT surcharge Also disappointing was the confirmation that the new SDLT surcharge on property purchases by those based abroad will go ahead – although we must wait until January to see the detail.  The government unveiled a sensible, measured approach to land value uplift. In a noisy environment with multiple views being aired, it was welcome to see such a considered response providing more certainty for developers and local authorities, and enabling more infrastructure provision for local communities.  Also positive was the continued government focus on a multi-tenure approach to increasing housing supply, echoed in the recommendations of Sir Oliver Letwin’s independent review, published alongside the Budget.  Letwin focused on the need for a more diverse, multi-tenure approach to large sites that would help to address market absorption rates and deliver homes more quickly, and to create more sustainable homes for different demographics and socio-economic backgrounds, thus fostering a greater sense of community.  It was good to see the current state of our town centres and high streets being given the focus it deserves. They are the beating heart of communities all over the UK and face a “perfect storm” of challenges exacerbated by public policy costs and constraints.  The BPF has called on government to conduct an independent and urgent review of CVAs The temporary business rates relief for small independent businesses is welcome, but it’s the larger property owners and retailers that will ultimately drive the reinvention of our town centres and nothing short of a full reform of the existing business rates regime is needed. The business rates burden is an unsustainable drag on businesses managing their way through a period of major transformation.   And let’s not forget some of the other knotty issues that property owners have to grapple with. We support the proper use of CVAs to help businesses in genuine distress but there is increasing frustration about the practice of some recent agreements; the BPF has therefore called on government to conduct an independent and urgent review of them. Even with those caveats in mind, the announcement of additional investment in a Future High Streets Fund is welcome, and when combined with the proposed planning reforms to allow greater flexibility for change of use on our high streets, and a High Streets Task Force, it has the potential to create a meaningful dialogue and action to support urban centres facing a change in the way that people shop, how they spend their leisure time, and where they want to live.  We look forward to working with ministers and officials to take this agenda forward and will continue campaigning for a better-supported high street that works for businesses, consumers and government alike.  [caption id="attachment_941649" align="alignnone" width="847"] Melanie Leech, chief executive, British Property Federation[/caption]