This week the Chancellor of the Exchequer Philip Hammond did two things that should help the UK’s high street in the short term, and signalled a further shift in attitude that might yet boost it in the long term. In the Budget on Monday (29th October), Hammond confirmed the much briefed tax cut to business rates for all retailers in England with a rateable value of £51,000 or less. Hammond told the House of Commons that the measure would see the business rates of affected retailers reduced by a third—"up to £8,000 for up to 90% of all independent shops". He said our high street "lies at the heart of many communities and is under pressure as never before". It is a welcome shift in tone from a party once led by the daughter of a shopkeeper.
Hammond also resisted calls to reduce VAT on e-books and audiobook downloads, something of a pyrrhic fillip. As I said four weeks ago, there’s no good argument to tax reading in one format but not the other, but any reduction in the price of e-books (or even the perception of cost) will have an impact on bookshops. The Publishers Association argued, in a pre-Budget report, that "the majority of growth in digital sales is expected to be through expansion of the overall market rather than a cannibalisation of physical book sales", but that is hardly the trade’s recent experience—the PA’s own stats show a shift in sales of fiction, from print to digital from 2011 to 2014. Nevertheless, this is less a reprieve than a delay: the argument against tax on books has long been won. The arguments about whether low-priced digital content is a net gain for the trade, or a drag on earnings, can be had another day.
Where both sides of the trade can agree is on Hammond’s mooted UK digital services tax, aimed at big technology companies that minimise taxation. That the Chancellor expects to raise £400m from this—and even then, not until 2020—may seem risible given the behomoths involved, but in finally addressing this, he signals that the mood music is turning against such giants, while at the same time indicating a willingness for the government to take a lead. An important and necessary gesture as Brexit approaches. As the PA’s William Bowes writes in his Opinion piece, the UK books business has much to offer in the difficult years ahead. Bookshops, as Hammond suggests, are not just at the heart of their communities, but also the bedrock on which this books business thrives. They merit support from all sides.
Mind the gap
One year ago, this magazine’s survey into sexual harassment of book trade employees spelled out in difficult detail the problems many—mainly women—continue to face. This week we revisit this with trade organisations—the PA, SOA, AAA and BA—now confirming that the promised code of conduct will be published in the next few weeks. The delay may be lamentable, but should not get in the way of the possibiity of real progress being made in this area.