The Times has revealed that the Chancellor of the Exchequer, Rishi Sunak, is considering an online sales tax of 2% or a mandatory charge on consumer deliveries. It is hoped that this approach will encourage consumers to shop at physical, walk-in stores; said stores’ very existence have been losing business steadily for the past few years, and this decline has been exacerbated by the COVID-19 pandemic.
For the Treasury, this change in policy seems like a no-brainer. Retail provides thousands of low-skilled jobs, in contrast to warehouses used by the likes of Amazon that become more and more automated by the day. But when the party in government is historically known for its reverence of the free market, it should know better. Capitalism creates a better quality of life because it forces businesses to innovate in the face of competition, or face bankruptcy. Protecting the high street in this way sends the wrong message. It tells consumers and businesses alike that inner-city consumerist community is of more importance than innovation than can improve the efficiency of the retail sector. This isn’t juxtaposing community and innovation – on the contrary, innovation can create a variety of new communities, and can link different groups in ways we may not have imagined. But aside from political values, it is naïve for the government to believe that it can slow down, if not prevent, changing consumer habits to online shopping. Online shopping is more convenient, cheaper, and faster than traditional retail. Those advantages are not disappearing anytime soon. Like all regressive taxes, it will also disproportionately affect those on low incomes, which in the current climate makes the proposed changes both cruel and unpalatable.
The second argument for saving the high street is one I often hear in the media: “Going shopping” is an important leisure activity worth preserving due to its social and cultural importance. Personally, I find the concept of consumerism as a leisure activity disconcerting; it pressures people to shop, which can easily lead to a culture of debt and plummeting credit scores.
What baffles me is why the closure of many stores, whilst upsetting for many business owners, is not being viewed through a lens of opportunity! With a buoyant economy, there is so much potential to transform high streets into so much more than places to shop – we can reinvigorate city centres and make them places of realleisure, rather than leisure sponsored by TKMaxx and John Lewis. Retail stores could be replaced with more bars and restaurants, which almost certainly provides more space to socialise than a store. Councils – if given proper funding of course – could buy back land to create new recreational areas like interactive galleries, or public services like libraries. Better still, in cities where housing is scarce, former high streets could become sites for more affordable accommodation. From a more altruistic perspective, councils could also take tentative steps towards tackling the epidemic that this pandemic has overshadowed – that of rough sleeping and homelessness.
An online sales tax, especially during this time of economic slowdown, is a kneejerk reaction that will do nothing to re-energise the economy. If the government really insists on preserving the high street, it could start by pushing local councils to reduce business rates and widen the eligibility for relief schemes. But it is better to leave the retail sector to organically adapt, or face a quick death rather continue to limp along with government assistance.