A parliamentary inquiry has called for a new online sales tax to “level the playing field” and provide “meaningful relief” to high street retailers.

The inquiry into high streets and town centres in 2030, led by Labour MP Clive Betts, found “dated policies and an unfair tax regime” must be reformed to create an environment that will allow high streets and town centres to flourish in the future.

The report by the Housing, Communities and Local Government Committee, published today, said “business rates are stacking the odds against high street retailers” and the Government must give “considerations to proposals for an online sales tax to level the playing field”.

It said: “The Government should conduct an assessment of proposed remedies proposed to the committee over the course of the inquiry, including a sales tax, an increase in VAT, an online sales tax and ‘green taxes’ on deliveries and packaging.”

It added: “Each of these proposals, if implemented at speed, has the potential for real change without requiring a complete overhaul of business taxation.”

More funding needed

The inquiry called on the Government to increase the amount it gives to the Future High Streets Fund.

The Government has made £675m of funding available, with a maximum grant of £25m per applicant. The committee said this level of funding “does not meet the scale of the challenge” facing the high street.

However, the report also found that bricks-and-mortar retailers must “accept the need to adapt and do more to offer what online cannot, focusing more on personal interactions and convenience” to encourage consumers to come into stores.

It urged landlords to “recognise the retail property market has changed” and be more receptive to negotiating lease terms with retailers in financial difficulty. To facilitate this, the MPs suggested that the government should consider providing ”a conciliation service” to facilitate negotiations between retailers and landlords.

Betts said: “In recent years, high streets and town centres have faced extremely challenging times. We have seen the collapse of a number of well-known, national high street chains, with many more undergoing restructuring or being bought out. The growth of online shopping has profoundly changed retail in the UK and the knock-on impact on high streets has been stark.

“It is likely that the heyday of the high street primarily as a retail hub is at an end. However, this need not be its death knell. Local authorities must get to grips with the fact that their town centres need to change; they need to innovate, setting out a long-term strategy for renewal, reconfiguring the town centre and finding new ways of using buildings and encouraging new independent retailers.”

MPs call for online sales tax to save high street