British booksellers have warned MPs that taxation of Amazon and other digital retailers must be overhauled if the bookshop industry and the high street are to survive.
“Amazon may maintain they create jobs but the company is putting numerous competitors out of business,” the Booksellers Association (BA) has told a parliamentary inquiry into the future role of high streets.
The BA, which said the number of independent book shops in the UK had halved to 858 since the US retailer’s UK launch two decades ago, added: “Bookshops have closed because of Amazon. The current steps being taken to reform the digital economy so that large scale internet retailers pay a proper share of taxation … should be encouraged and implemented quickly.”
The shadow cast by internet home shopping over struggling high streets is one of the key themes of the 75 written submissions received by the housing, communities and local government committee ahead of its first hearing on Monday.
Increasingly, fewer Britons are choosing to visit their local shops, which combined with the dramatic cull of bank branches seen in recent years, is contributing to a spiral of high street decline. Meanwhile, Amazon continues to power ahead – this week it became the second company to be valued by Wall Street at $1tn (£775bn), a matter of weeks after Apple reached the milestone first.
Against the backdrop of a squeeze on consumer spending, there have been a series of high-profile retail failures in the UK, including Toys R Us, Poundworld and House of Fraser, while New Look, Mothercare, Marks & Spencer and Homebase are closing hundreds of stores in total.
The British Property Federation (BPF) told MPs that the high street’s decline needed to be taken more seriously by government policymakers.
“This inquiry seeks to establish what our high streets will look like in 2030,” the BPF said. “It is difficult to look at such a long-time horizon but what we can say with some certainty is most will look awful long before then if the status quo is maintained.”
Bill Grimsey, the former Wickes and Iceland chief executive, is among those being called to give evidence. He was among the authors of a recent independent review that suggested the crisis on UK high streets could leave 100,000 shops empty within a decade. The study suggested town centres could be reinvigorated as “community hubs” but by focusing on alternatives to retail such as housing, leisure, education and offices.
With many high street campaigners looking to their local council for help, the Local Government Association (LGA) said a lack of financial resources was preventing its members from doing more. “The ability of councils to proactively support their town centres is constrained as they prioritise their resources on vital and statutory services,” it said.
This cash squeeze has had a direct consequences on councils’ ability to deliver the vital transport links, such as bus services, that would bring residents back into struggling town centres, the LGA said. Outside of London, 117m bus miles – nearly half of all council-subsidised services – have been lost since 2011.
One of the overriding concerns of the respondents was business rates – a tax based on retail property values – with the British Beer and Pub Association, which represents the owners of 20,000 pubs, describing the property tax as punishing for landlords and shopkeepers.
The tax burden on traditional retailers and pubs is higher than for online businesses because the property values, which underpin the business rates calculations, are typically higher in town centres than for out-of-town warehouses on industrial parks.
“Business rates need to be reviewed and a new and fairer way to tax businesses needs to be developed,” its chief executive Brigid Simmonds said. “In the short term … businesses that benefit from online sales need to be paying more.”
In the wake of House of Fraser’s collapse into administration last month, the government hinted that it was considering imposing an “Amazon tax” on online sales. “We may have to look at temporary tax measures to rebalance the playing field until we can get international agreements sorted out,” Philip Hammond said at the time.
An Amazon spokesman said: “We pay all taxes required in the UK and every country where we operate. In May 2015, to ensure we had the best business structure to serve our customers going forward, we established a local country branch of Amazon EU Sarl in the UK, with all retail revenues, expenses, profits and taxes due now accounted for in the UK.
“This year we plan to create 2,500 permanent jobs across the country in research and development, our head office, customer service and fulfilment centres, to bring our total workforce in the UK to over 27,500.”
The submissions include a number of powerful appeals, including from independent retailer Chris Abbott, the third generation owner of Abbotts, a small DIY chain in Devon. He said: “The UK high street as we know it … will face obliteration unless swift action is taken.”
With £30bn flowing into government coffers from business rates, the Treasury is unlikely to abolish the tax soon but alternatives are being sought. Abbott suggests a parcel tax of 20p to £1 a package: “I think people would accept that the balance is shifting from the high street to online and as a result online retailers will need to start paying their fair share.”