I happened to be in Oxford the other day and I went through a covered market in the city. The local shop keepers are up in arms over a massive 40 – 70% hike in they’re rents from the local council. Naturally at a time of recession you can imagine how potentially crippling such a rent demand could be. The property rent is often the biggest bill for any company and you would struggle to identify any company (regardless of how big or small) that could see such a huge jump in its costs and still stay in business.
Obviously we all know what’s prompting this rent hike. The Tories have been implementing heavy cuts on council budgets, particularly those under the control of labour (punishment to locals for voting against the Tories). Under pressure, councils are, as I highlighted before, cutting everything not bolted to the floor and shuffling under couch for any loose pennies.
Of course one can see where this is going, the pressure implemented by Osborne on councils is seeing the business costs of firms to go up, inevitably some will as a consequence close down, meaning the councils (and thus the exchequer) has less money coming in the door, quite apart from the drop in tax receipts.
Chain store Britain
The previous recessions under Major and Thatcher had a devastating effect on the UK high street. Many of Britain’s family run businesses closed down and many a British high street became a drab boring chain store clone of another. Now I suspect the Tories are going to destroy what’s left. The UK high streets will become like those in America.
Ever been shopping in an American town? Well first of all most don’t have a high street any more (all closed down). This has caused the economies of many American towns to actually shrink, along with tax receipts to city hall to shrink. Instead many American towns are instead ringed by large out of town retail parks filled with chain stores and big box supermarkets. Such shops tend to offer much lower wages, little long term career prospects.
And as we learnt recently in the UK, quite a number of these chain store firms (Starbucks for example), don’t pay out a lot in tax, indeed they often pay none.
But will the council get a higher rent off chain stores? Ah….no! The Oxford market guys pointed out that when one shop closed down awhile ago it stood empty for months (nobody could afford the rent) until the council let it to a chain store, with the first nine months of rent free!
In short the Tories policies here are ass backwards. We should be doing everything possible to shore up small locally run businesses as they put nearly all the money they make back into the local economy. By contrast we should be cracking down hard on corporate tax dodgers who often take money out of the UK economy. If they decide to pull out of the country, great! I’ll drive em to the airport! :wave:Let’s see how many Latte’s Starbucks can sell in the Cayman Islands!