Rayner backs more than £1bn high-street push before election

A £1bn package before the polls

Chancellor John Healey has earmarked more than £1bn in his debut budget for retail, hospitality and leisure, and Angela Rayner says voters will see a high-street difference before the next general election. The Labour housing secretary called regeneration a top priority before the country votes, directing investment toward struggling local communities blighted by boarded-up shops and rogue businesses.

“There’s been a real sense of decline,” Rayner said. “People see it as part of the identity of their town and area, and that’s why we’ve got our high streets strategy.” Rayner made the comments during an interview for the Guardian’s series on the fortunes of Britain’s towns.

Healey’s plan cuts business rates for retail, hospitality and leisure companies and is worth £1bn over two years, or about £500m annually. Higher taxes on gambling and vape shops will partly fund the relief.

Rayner said the government stood ready to take further action. “The chancellor has shown he’s backing our high streets, backing our businesses that have been struggling and giving them the breathing space,” she said. “And he’s going to continue with that.”

Rayner also insisted the budget was “moving the needle” for the economy while defending Healey from criticism. On Thursday, the Resolution Foundation and the Institute for Fiscal Studies warned that his measures were poorly targeted and had paved the way for a “brutal” spending review next year.

Poundland exposes the strain

Meanwhile, the owners of Poundland filed a notice of intention to appoint administrators, putting up to 12,000 jobs at risk. The discount chain is a high-street fixture across the country, making the move a significant warning for towns dependent on national chains.

Speaking before that announcement, Rayner said the government was taking action to ease pressure on businesses and households amid damage to Britain’s economy from the Middle East war. “All these businesses that people value, that make up a thriving high street, the chancellor is really giving them support,” she said.

The funding pipeline

Labour launched a revamped “hope on the high street” strategy alongside Healey’s budget. The program coordinates investment and transfers power to local leaders, giving town centres a larger role in deciding how regeneration money is used.

The strategy includes two already announced funding pots:

• £5.8bn for the “pride in place” programme supporting regeneration projects.
• £210m to transform derelict buildings.

Together, the funds direct money toward regeneration projects and the reuse of empty property. “There’s a lot of money and funding pots going into the high street, as well as work in the public realm to deliver services and housing,” Rayner said.

On his way to becoming prime minister, Andy Burnham pledged a “new dawn” for Britain’s high streets and placed the revival of overlooked town centres at the heart of his government agenda. In response, Healey set out the two-year, £1bn rate-cut plan, financed partly by higher taxes on gambling and vape shops.

Rayner said: “The money will start to come through. Already we’ve put the £5.8bn in.” She added: “Next year, from April, business rates [cuts] will apply and you’ll see [other] money in more areas.” That timetable puts April next year at the centre of the government’s pre-election promise.

What changes for high-street businesses?

For retail, hospitality and leisure operators, the immediate change is a business-rate cut from April next year. The wider package includes £5.8bn for regeneration, £210m for derelict buildings and public-realm work intended to deliver services and housing.

Business leaders say the business rates system still needs more fundamental changes, because Labour has promised in its manifesto to replace it entirely. Before the budget, former Bank of England chief economist Andy Haldane told the Guardian that taxing online sales at higher rates than in-store purchases would help “level the playing field” for struggling bricks-and-mortar stores.

Budget documents show ministers are exploring how business rates could better target online retailers while minimising indirect impacts on wider retail businesses. The design could help fund high-street support, leaving unresolved how online retailers would contribute and how physical stores would bear the cost.

For operators, April’s rate roll-out is the first measurable test, not the final answer. Next year’s spending review, uncertainty over online-retail targeting and Poundland’s move to appoint administrators will shape whether the package stabilises high streets before the next election.