Oxford High Street

Online retail giants such as Amazon should face higher taxes in order to "level the playing field" for High Street retailers, a group of MPs has said.

With a fifth of all retail sales now online, and likely to grow more and more in the future, the Housing, Communities and Local Government Committee said the High Street could become a 'ghost town' in the near future.

In addition to higher taxes on online retailers, the group of MPs called for lower business rates to assist High Street stores. Typically, High Street retailers spend between 1.5% and 6.5% of their annual turnover on business rates, while Amazon UK pays around 0.7%.

"Some formerly thriving shopping areas are likely to become ghost towns and effectively close down altogether unless the government, councils, retailers, landlords and the local community act together," it said.

The government has previously ruled out an online sales tax, explaining that such a move could impact consumers. However, the committee has now urged to the government to reassess the idea, as well as introducing taxes on online deliveries, higher VAT for online purchases and a general online sales tax. The revenue raised by these taxes could then be put towards reducing business rates for physical High Street stores, the committee recommended.

High Streets Minister, Jake Berry, said the government has a £675 million plan to support the High Street, as announced in the last Budget statement. He said: "We know high streets are the backbone of our economy and a crucial part of our local communities, and we want to see them thrive - both now and in the future.

"We're supporting small retailers too, slashing business rates by a third - building on more than £13bn of rates relief since 2016."

'Focus on office jobs'

Earlier this week, a think tank called on national and local governments to focus their attention on bringing high-paid, knowledge-based office jobs to city centres, rather than attempting to replace failed retail stores.

In its report, the Centre for Cities said bringing these types of jobs to city centres would encourage workers to return to the High Street for lunch spots and restaurants.

Centre for Cities chief executive, Andrew Carter, said: “We must remember that a successful High Street is the result, not the driver, of a successful city economy.

“Instead of trying to replace failed shops with more retail, investors and policy makers should focus their strategies on making struggling city centres attractive places to do business and spend leisure time – not just to shop.”