If Sunak was the visionary he claims to be, high streets would fare much better

Funny things, budgets. Having covered many of the annual set pieces, I am well versed in their rhythm, the raising and lowering of the chancellor’s volume, their speeding up and slowing down.

The pattern has been the same for decades – no matter if it’s a Tory or Labour chancellor speaking. There’s the run through the macro and the state of the UK economy versus the rest. Then onto the nitty gritty, building to a flourishing sign-off at the end.

It’s hard, listening, to discern what is important and what isn’t, what represents meaningful change and what is of little consequence but sounds good. For that you need to study the transcript and the accompanying Treasury “Red Book” containing the small print.

Take business rates. Rishi Sunak made four points regarding the tax on business premises. First, he will implement a 50 per cent cut for shops, bars, restaurants and gyms. Second, from 2023, property revaluations will take place every three years instead of five at present. Third, he is conducting a review of the system that dates to medieval times and by common consent is no longer fit for purpose. Four, investment in green improvements like solar panels and heat pumps will be exempt from business rates.

That all seems marvellous. Regarding the first, though, the 50 per cent discount lasts only a year. Plus, it is capped at £110,000 per business. So, it will benefit only smaller businesses. Those large retailers suffering on every high street? They’re still clobbered because they can easily pay £1m and more in business rates a year.

The second, while it’s welcome, is not enough. One of the bugbears of the existing scheme is that valuations are five years apart and pay no heed to current property values. Reducing the frequency was billed as fresh, except it was pledged by another Tory chancellor, Philip Hammond, back in 2017. What the retail and hospitality sectors were seeking was for revaluations to become annual. Sunak ignored their pleas and went for every three years – so better than five, but not exactly one either.

As for the third, the wholesale overhaul, he’s been working on reforming business rates for a while now, so nothing much to get excited about there.

Sunak may have made it appear as though he was announcing something new and vital. In fact, he was not. He did offer a clue as to why a shake-up is not so easy – he mentioned that business rates rake in £25bn a year to the Exchequer. That is not a figure to be sniffed at and not one to be abandoned merely because businesses don’t like paying the charge. Certainly, by dropping in the tax take the way he did he was indicating that no replacement system will be wheeled out unless it can collect the same total.

As for the fourth, exemptions for solar panels and heat pumps, what does that amount to, in practice? It ticks the box marked “eco” but the measure is not going to help businesses much. The chancellor also introduced relief on higher bills caused by building improvements. Again, though, it is for one year only.

Meanwhile, shops and pubs continue to close. At the same time, too, online retailers pay business rates on their depots, of which they possess few, and in many cases, thanks to clever accounting, their overall tax bills, relative to the amount of trade they conduct in this country, remain low.

So, it goes on: the playing field stays tilted heavily in their direction; the traditional high street retailers must somehow try and combat them, uphill with their arms tied around their backs. It is an impossible ask.

If Sunak was as bold and as visionary as he claims to be he would have done something far-reaching. It’s not as if the online versus bricks and mortar battle has sprung up from nowhere; he’s had ages to diagnose and to prepare a solution.

In February this year we were informed that Treasury officials were weighing up options to “shift the balance” between spending online and physical shopping. Government, we were told, was across the problem, concerned at the impact of empty high street buildings on communities. An online sales tax was being mooted, along with a review of business rates which was due to conclude in the spring. Well spring has been and gone, as has the summer. We’re now in autumn, and there’s no puff of white smoke.

Eight months ago, a Treasury spokesperson said this: “We want to see thriving high streets, which is why we’ve spent tens of billions of pounds supporting shops throughout the pandemic and are supporting town centres through the changes online shopping brings. Our business rates review call for evidence included questions on whether we should shift the balance between online and physical shops by introducing an online sales tax. We’re considering responses now.”

There is a large problem. Gulp. A bit of sticking plaster, that will do the trick. Except of course, it won’t. Sunak needs to face up and stop dodging and pretending: only radical surgery will suffice.