Closing vape shops will not save the high street - Burnham must give businesses breathing space

The Prime Minister has quite rightly highlighted the issues of empty units, struggling businesses and a proliferation of vape shops and gambling halls. I would also add barbers and sweet shops to the list of businesses dominating too many high streets in the UK.

I welcome his intention to change the way our high streets look by encouraging diversity, quality, and social impact. Listening to what the community wants is very important. However, closing down vape shops and gambling halls will lead to more empty units if we do not encourage new and existing retailers to invest in the high street.

The reason vape shops and gambling halls have grown is due to demand, high margins, and minimal employment costs. There is also growing evidence that too many of these businesses are ‘fronts’ for organised criminal activities, so the normal rules of doing business do not apply.

We all want to see a more diverse and vibrant high street. To achieve that, we need to encourage investment from good, legitimate indie retailers. We need to remove those barriers that are making high street retailing so challenging. Reducing the cost of doing business is the best way to level the competition playing field with online giants.

The PM talks about wanting to give people in Britain “breathing space” from the cost of living pressures. High street businesses also need breathing space from the tide of rising business costs seen since 2024 - we have a cost of doing business crisis. These rising costs have resulted in reduced profit margins, reduced employment in shops, and ultimately many good businesses leaving the high street (to be replaced by a barbers, vape shop, etc.)

Where does the government start? I suggest joining existing policies that together support the high street.

All retailers will talk about the need to reduce business rates. We need true reform, not more tinkering around the edges that was implemented at the last budget. Last year’s so-called transformation increased every indie retailer’s rates bill by 15%. To really make a difference, I urge Treasury to go back to the 75% discount (up to a value of £110K). We had this in 2024 at £2.5Bn.

To pay for this, I would bring forward two current policies focused on online sales. Firstly, I would mandate the owners of online marketplaces to collect VAT on all sales. This would reduce VAT and deliver £1 billion extra income to the Treasury. Alongside this, I would also bring forward the plan to close the low-value item duty-free loophole. Over £1billion of products come into the country now, duty-free. Bring this forward to 2027 (currently planned for 2028) and generate a minimum of £5 billion of extra income.

Two policy areas, working together to support high street businesses. The same could be achieved when thinking about employment in retail. The cost of employment has risen since 2024 due to increases in NICs. We have also seen a very worrying increase in NEETs. The high street is a large and good employer. I would increase the NI employers' allowance to encourage smaller businesses to employ more part-time workers, thereby offering work experience to younger people.

Of course, the most important aspect of high streets is people. Without people, high streets do not exist. For people to use high streets, they need places to eat, drink and shop. They need to feel safe. The high street needs to be accessible and affordable.

Funding for community policing to keep shops safe must be retained. I would like to see a national policy to reduce the cost of car parking, funded by taxing online sellers. Most of all, I would like to see a significant increase to the Trivial Benefits Allowance (TBA). The TBA is a government tax exemption that allows employers to give small, non-cash gifts to employees without incurring tax or National Insurance charges. It is currently set at £50 and has not increased for 10 years.

We urge Burnham to increase this so that employers can reward employees through gift cards and vouchers. Redeemable on the high street, we would see higher footfall and higher spending. It could go some way to easing the cost of living, increasing workplace productivity, and supporting high streets. There is evidence of positive results in the Irish Republic, where the level is set at 1,500 euros.

The new government is making positive noises about improving high streets. Give high street businesses some breathing space, and they will invest in property and people to give us all better places to eat, drink, shop, relax and have a real sense of belonging.

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Andrew Goodacre is CEO of the British Independent Retailers Association.

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