High streets are at the heart of our communities, and they serve a social as well as an economic purpose. To support them, at Budget 2018 I cut business rates for small and medium-sized retail premises operated by independent retailers by a third for two years from April 2019, saving businesses over £1 billion. We have also set up a £675 million future high streets fund.
I very much welcome those measures in last year’s Budget, but for this coming comprehensive spending review, will my right hon. Friend consider offering occupiers of listed premises in town centres with freehold or full repairing lease obligations a VAT exemption on repairs and maintenance of those premises, which is a cost they have to bear but their online competitors and other retailers outside high streets do not?
I have to say to my right hon. Friend that, under EU law, we cannot introduce a reduced rate of VAT that is limited to repairs, maintenance and renovation of listed buildings. In any case, VAT incurred on their properties by VAT-registered businesses may be recoverable from Her Majesty’s Revenue and Customs, subject to the normal VAT recovery rules. However, the good news is that we remain committed to supporting our high streets, and on Saturday we announced a £62 million fund to breathe new life into historic buildings on heritage high streets, which I hope will go some way to helping.
Does the Chancellor agree with me that companies such as St Modwen that buy up town centres such as Kirkby in my constituency do nothing with them—in fact, they leave them to rot—and then simply sell them on to a pension fund? Is that the way we want to run the future of our town centres, and has he not got anything more imaginative that can be done about it?
The £675 million fund that I mentioned is specifically intended to allow local authorities to develop plans for responding to the transformation of the high street that is coming. Retailing is changing, and high streets have to change to reflect that. We cannot hold that tide back, but we can help to support the transition.
Boots the Chemist, one of the most popular high street stores, says that just 22 of its 2,400 stores qualify for the Chancellor’s excellent business rates reduction scheme—not because of anything the Chancellor has done, but because of EU state aid rules. What can the Chancellor do to assist and to get around those rules?
I am a little mystified by this story about Boots, which I too read in the newspapers. When I announced the policy, I said that it was designed to help small independent retailers, and Boots, with 22,000 providers, does not fall within my definition of a small independent retailer. We always understood that this policy initiative was designed to support small independent retailers as they transition to the high street of the future.
Last Friday, I met members of the Chamber of Trade at Newtownards. Of three small shops in the town of Ards, one started off employing 10 and now employs 60, one started off employing six and now employs 30, and one started off employing 20 and now employs almost 100. Would the Chancellor consider rates reduction for those high street shops that increase employment?