How to help businesses survive Covid-19
With small outlets in a fight for their futures, Simon Pitkeathley has some new ideas and suggests ‘we need to nudge the tax burden from income towards wealth’
14 August, 2020 — By Simon Pitkeathley
IT’S impossible to predict what the world will look like post-coronavirus.
Many will be going through personal grief and all will have had an unprecedented communal experience, a global war with no human enemy.
Pessimists predict it will uncover the worst of humanity and eventually a return to the status quo.
Optimists hope that this is the traumatic birth of a kinder society; one with an empathetic drive to minimise human suffering.
Whatever the outcome, it will be shaped by our actions over the next few months.
From a business perspective this crisis is accelerating pre-existing, long-term, changes, making it one of the areas where it’s possible to plan for the outcomes.
Outlined here is a longer-term vision for post-coronavirus pandemic inclusive growth.
Business rates are antiquated. They don’t tax physical and online stores equally so are not suitable for the digital age.
Likewise, with growing inequality we need to nudge the tax burden from income towards wealth.
The upcoming review of business rates gives us the opportunity to do both, by following the lead of other OECD Organisation for Economic Co-operation and Development countries and shifting property taxes from the occupier to the owner.
The housing crisis is well-documented, but commercial space is in a similar, less visible, crisis.
The start-ups who will be vital to our future economy require affordable space to experiment and grow without prohibitive overheads.
This centres on bringing vacant space into use by encouraging property owners to offer them rent-free to temporary meanwhile occupiers, while they search for long-term commercial tenants.
Temporary use of vacant buildings is not a new idea. Our Camden Collective project has been doing so since 2009.
It’s a replicable model which can be scaled UK-wide, if the red tape surrounding agreements and leases can be overcome.
While we will undoubtedly suffer a loss of many small businesses over the coming months, we hope the recovery following the Covid-19 coronavirus will catalyse the birth of many new ones.
It is essential that they are nurtured, and their administrative burden minimised to unleash their full potential and give them a fair chance of success.
This is an opportunity to reimagine how our economy functions, but any radical changes need testing and iteration before they are deployed across the country.
The UK’s 300 plus Business Improvement Districts – BIDs –, with their vote-in tax mechanism, hyperlocal knowledge and unique democratic mandate from businesses, are the ideal place to do so.
Their survival is under threat owing to the coronavirus crisis, and their legislation is tied to business rates.
As our new world takes shape following the lockdown, the above measures could position small and medium-size businesses and entrepreneurship at the centre of our local economies.
Our approach to the recovery should be to grasp an opportunity to make radical changes that build a fairer, and ultimately more productive economic model.
These policies should start a UK-wide conversation around how we envisage our new society functioning, and the tools the government should use to make it happen.
• Simon Pitkeathley is Chief Executive of Camden Town Unlimited and Euston Town Business Improvement Districts, and Camden Collective.