Nearly 50,000 more high street jobs created in Labour held areas

As Labour ramps up its call on the Government to reform business rates, new figures from the House of Commons Library show that high street employment rose by 3% (48,000) in areas continuously controlled by Labour over 2015-2018, compared to Conservative held areas where jobs only rose by 1.6%. Non-high street employment also rose by 377,000 in those same Labour held areas.

In September, Labour’s Shadow Chancellor Rachel Reeves was praised by business groups when she pledged the party would cut business rates immediately, and then completely reform the business rates system in the long run, bringing the change which major business groups have been urging the Government to do.

The Party’s plan would incentivise business investment, especially in areas that help decarbonise the economy; reduce uncertainty for business, through more frequent revaluations and through instant reductions in bills when property values fall; reward rather than punish entrepreneurship; and reward local government for the great work they do to promote economic growth.

The news comes as Reeves visits Stockton high street today [Thursday], undergoing reform by the local Labour council into a more modern, enterprising centre and green community space.

That transformation includes converting a previously derelict theatre into a new concert venue that will bring a footfall of 200,000 a year, and breathing new life into an old department store, making it into an Enterprise Arcade, where independent businesses can pay a peppercorn rent as they seek to get off the ground.

Rachel Reeves MP, Labour’s Shadow Chancellor, said:

“Our high streets are a crucial part of the tapestry of where we live, work and share our everyday lives, and they hold the keys to our economic recovery.

“The current system of Business Rates is not fit for purpose – it punishes investment, entrepreneurship and it hits the high street.

“That’s why Labour would cut business rates immediately – paying for this with a one-off rise in the Digital Services Tax.

“And it’s also why we’d scrap the system entirely – replacing it, as many business groups and firms up and down the country have called for: a fundamental reform that makes sure online giants pay their fair share in tax too.

“Labour’s mission is to tax fairly, spend wisely, and grow our economy by boosting our brilliant British businesses and helping high streets be the pride of our towns and cities.”  

Ends

Notes to editors

Labour have said the Party will:

• Freeze Business Rates until the next revaluation, benefitting sectors like retail and hospitality who hit the most by this tax.

• Increase the threshold for small business rates relief (from the current threshold of £15,000 to £25,000), to give SMEs a discount on their business rates bill for 2022/23, ahead of more fundamental reform.

• The party have said they would pay for this one year cut by increasing the UK Digital Services Tax from two per cent to 12 per cent, raising £2.1 billion.

• After that the party has said they would scrap the current system and reform it completely into a new form of business property taxation that shifts the burden away from high street businesses and onto online giants, many of which pay neither business rates nor corporation tax currently. The receipts for the incoming global minimum rate of corporate tax will also help finance this new form of business property taxation.

• The Party has set out four principles of this new system.

o   It would always incentivise business investment, especially in those areas that contribute towards decarbonising the economy

o   It would reduce uncertainty for business, through more frequent revaluations and through instant reductions in bills when property values fall

o   It would reward rather than punish entrepreneurship, with incentives for businesses that move into empty premises

o   It would reward local government for the great work they do to promote economic growth, while guaranteeing funding for local public services.

• The CBI, Federation of Small Businesses, British Chambers of Commerce and British Retail Consortium all released statements saying that measures from the Chancellor in the Budget did not go far enough for the fundamental reform needed, that businesses needed urgent help now and that long promised reform of business rates in previous Conservative manifestos is still undelivered.

House of Commons Library Research:

• The House of Commons Library looked at which party controlled the local council and whether any trends could be seen in changes in high street employment over 2015-2018, looking at whether a local authority was controlled by the same party over the whole period from 2015-2018, or not, grouping all common areas together. For example, all areas controlled by Labour over throughout 2015-2018. They then summed high street employment for all these areas.

• The House of Commons Library cautioned against making grand conclusions from the data, with many factors affecting high street employment.

• Of the 371 local authorities in Great Britain in the ONS dataset, 4 are based on boundaries that didn’t exist prior to 2019 and for which no data was provided.[1] Of the remaining 367, Labour controlled 92 for all of 2015-2018, the Conservatives controlled 141, there was No Overall Control (NOC) throughout in 56, while 65 had a change of council control at some point over 2015-2018.[2]

• The table below summarises employment levels in high street businesses and non-high street businesses each year from 2015-2018, grouped by who controlled the council over the whole period 2015-2018. For example, the Labour rows only reflect local authorities run by Labour in every year from 2015 to 2018. If a local area went from, say, Labour control to No Over Control, this area would be represented in the ‘Change in control’ category.

• High street employment rose by 3.0% (+48,000) in areas continuously controlled by Labour over 2015-2018. Non-high street employment rose by 4.5% (+377,000) in these same areas.

*Total includes 4 local authorities for which no party control data is available

Note: Figures in brackets indicates number of councils

Source: Commons Library calculations based on ONS, High streets in Great Britain: March, 2020 and council data provided in Open Council Data UK data files