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The High Street vs Online solution

if it's about Cardiff.. Sport, Entertainment, Transportation, Business, Development Projects, Leisure, Eating, Drinking, Nightlife, Shopping, Train Spotting! etc.. then we want it here!
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AlwaysBeBlue

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The High Street vs Online solution

PostWed Nov 07, 2018 10:10 am

To me the answer is footfall. So Cardiff for example needs more people living directly in the City Centre.

10 to 30 story buildings of good quality to build up the population of the City Centre.

It then becomes more convenient to go to the clothes shops on foot than ordering on line. The will ensure that the City Centre survives as on line shopping gets better and better.
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paul cardiffwalesmap

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Re: The High Street vs Online solution

PostWed Nov 07, 2018 11:28 am

AlwaysBeBlue wrote:To me the answer is footfall. So Cardiff for example needs more people living directly in the City Centre.

10 to 30 story buildings of good quality to build up the population of the City Centre.

It then becomes more convenient to go to the clothes shops on foot than ordering on line. The will ensure that the City Centre survives as on line shopping gets better and better.


Hopefully our city centre is moving in the direction you suggest. Ours, like all city centre's are changing radically making a visit to the centre more than just a shopping expedition! Tea - Coffee - Cocktails - Food - Craft Beers - Entertainment - Sport - travel and more are all reasons to pop into town. As more people actually live in our city centre it will become more of a community with more constant activity be that food shopping, other shoppping, entertainment and of course just the general to-ing and fro-ing of life. Years ago it was an absolute ghost town sunday til friday evenings, busier now but needs to be a whole lot busier again. There are a few developments in the pipeline that will contribute to our city centre population with hopefully plenty more to follow.
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cardiffian

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Re: The High Street vs Online solution

PostThu Nov 08, 2018 11:27 am

Its not just footfall thats needed, but government regulation of online retailers and shops.

In france there are laws that restrict online trade, and also laws that help shops. For example french people have to have access to fresh bread by law, this means lots of bakery's this encourages people to by local bread and encourages other shops near by.
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HalRobsonKanu

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Re: The High Street vs Online solution

PostThu Nov 08, 2018 12:17 pm

Another novel idea would be for the government to make companies like Amazon actually pay some tax.
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RandomComment

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Re: The High Street vs Online solution

PostThu Nov 08, 2018 6:19 pm

HalRobsonKanu wrote:Another novel idea would be for the government to make companies like Amazon actually pay some tax.


We do need to fix our tax system but its not easy for one government to do alone. We are subject to international tax treaties which say how companies are taxed. Since the 1930s, for "profits" taxes, that's not been where the sales or customers are. Its where the value is "created". That was always a bit tricky, but when most exports were goods, it sort of worked. Its increasingly struggled with the growth of services as exports (which are hard to measure) and of trademarks, algorithms, patents, etc. as a source of value.

So Apple says its "value" is created by its patents and brand, which it "locates" in Dublin, say. And Google says its value is its algorithm (which is actually still "located" in the US) and its European service centre (in Dublin) not its ad execs (in London). Amazon, does much of its business out of Luxembourg.

Its unfair, it needs to change, but doing something unilateral is difficult. It could make the UK an unattactive place to do business and to base your business.

Amazon actually hasn't been making that much money until recently - and still doesn't for its online sales. So even if more of the profits were taxed in the UK, it wouldn't really affect their costs. So wouldn't really make it easier to for the high street to compete.

Amazon is subject to the same VAT; is subject to the same business rates system (and unlike many of the shops in the crappiest high streets, has no discounts/reliefs) - it just occupiers large cheap areas of land out of town; and pays a bunch of petrol duty, etc. to deliver its products to people (at least the costs of delivery include such costs).

I think whats happened is that the retail industry has changed. Online is a better way of shopping for many people. Its more convenient. It has a shop-front with in effect a zero marginal cost (the webpage), so it can offer many more products without physically displaying them nicely - they're just stored in warehouses. And the fact it operates at massive scale and in cheap locations means it has a lower fixed cost base.

Its the same way the textile factories replaced the handloom weavers. And then foreign textile factories replaced British ones.

If we think there are benefits to having high street shops (e.g. social interaction), then we need to find ways to support this - not penalise new business models.
Fundamentally,
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HalRobsonKanu

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Re: The High Street vs Online solution

PostFri Nov 09, 2018 11:20 am

I'm sure that you know an awful lot more about the tax system than I do, so I'm not going to dispute anything that you have said, except to say that I am not seeking to penalise new business models, only to find ways to create a level playing field, which (at present) there clearly isn't.

Also, on the point of needing to work across borders to regulate the tech industry, one can't help thinking that it might be useful for the UK to be part of some transnational governance structure that could perhaps do something about these issues. Some kind of union of nation states perhaps? Crazy idea, I know!

One genuine question though - Is HMRC not free to decide the rate at which the revenue earned in the UK by a particular company is taxed at?

Some other ideas that might contribute to a more level playing field between the high street and online platforms:
- Improving the pay and conditions of delivery staff who are employed within the gig economy
- Improving the pay and conditions of staff within Amazon's "fulfilment centres"
- The public sector not bending over backwards to assist Amazon's expansion, as happened in Swansea 10 years ago when the LPA and Welsh Assembly bent over backwards to rush through their planning application and implement multi-million pound road upgrades to support an investment that I would imagine adds very little value to the local economy
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RandomComment

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Re: The High Street vs Online solution

PostFri Nov 09, 2018 12:00 pm

HalRobsonKanu wrote:I'm sure that you know an awful lot more about the tax system than I do, so I'm not going to dispute anything that you have said, except to say that I am not seeking to penalise new business models, only to find ways to create a level playing field, which (at present) there clearly isn't.

Also, on the point of needing to work across borders to regulate the tech industry, one can't help thinking that it might be useful for the UK to be part of some transnational governance structure that could perhaps do something about these issues. Some kind of union of nation states perhaps? Crazy idea, I know!

One genuine question though - Is HMRC not free to decide the rate at which the revenue earned in the UK by a particular company is taxed at?

Some other ideas that might contribute to a more level playing field between the high street and online platforms:
- Improving the pay and conditions of delivery staff who are employed within the gig economy
- Improving the pay and conditions of staff within Amazon's "fulfilment centres"
- The public sector not bending over backwards to assist Amazon's expansion, as happened in Swansea 10 years ago when the LPA and Welsh Assembly bent over backwards to rush through their planning application and implement multi-million pound road upgrades to support an investment that I would imagine adds very little value to the local economy


I think the term "level the playing field" can be a cover for all manner of sins by a meddling government.

I do think we have an issue with international taxation, but that causes more of a problem with competition for things like Google and Facebook (where the source of value-creation is subject to debate - is it the algorithm, is it the user, or is both in combination? If the latter, how do you apportion 'value' for the purposes of tax given the algorithm and users are only valuable jointly?) and IP-heavy companies like Apple and probably the pharmaceuticals.

For Amazon though, it just isn't making that much money from its retail sales. Its high volume, low margin, with low costs per sale given its efficient business model: online, big out of town warehouses, lots of automation, lots of temporary workers at times of peak demand.

When we say "level the playing field", do we mean that we shouldn't allow those who have cottoned on to a business model that people like and ist cost-effective to reap the rewards? Do we prop up less successful business models that the public, by the revealed preference of wheret they shop, seems not to want so much anymore?

"Level the playing field" can become a euphamism for trying to protect incumbants (traditional retailers) from new competition.

Low pay and poor conditions can be a problem and perhaps needs to be tackled more forcefully. (Although we must be careful about over-regulating and raising the wage floor too highly - so far we've had pretty good employment performance, and the increases in the NMW don't seem to have dented it, but if you look at countries with regulated labour markets like France, Italy, Spain, etc., you see lower employment especially among low skilled, and under 25 and over 55. And those in work are split between those with permanent and those, often younger or less skilled, cycling between temp jobs - which isn't an issue on such a scale in the UK).

But is that really why Amazon is competitive? Low wages and poor conditions are a problem in retail more generally. Among retailers, small retailers pay less than big retailers. (More generally, small firms pay less than big ones). You can't regulate just one sector or one firm when it comes to pay and conditions, and putting up wages and improving conditions more generally would hit bricks and mortar as well as clickety click retailers.

I'm also not sure that, overall, the public sector subsidises the likes of Amazon and other big companies. Big companies pay the apprenticeship levy, small ones don't. Small companies benefit much more from NI taxbreaks than big ones do. Every year the Welsh Govt forgoes £100 million or more by exemption or giving discounts on business rates to small shops and other businesses (this year the cost is forecast to be £115 million). And its not even clear the small businesses are the ultimate winners - the landlords may pick up much of the benefit if, as a result of not paying taxes, the small businesses are able and willing to pay higher rents.

Look, I'm playing sort of hard ball here. I do think we can build a case for supporting high streets - as social hubs, as community facilities, as anchors to civic life and community. And that probably means you want some shops there as well as cafes, barbers/hairdressers, etc.

But I think too much of the rhetoric about "saving our high street" and "levelling the playing field" is just the same kind of lobbying you always get from industries suffering from structural change and that are losing out to new business models. Handloom weavers did it in the early 1800s ('Luddites'), smashing up textile mills. Textile mills will have done it as foreign competitors came on the scene. And now the shops buying and selling the clothes are doing it too.

Where I think we need to be focusing is not on whether the high street needs saving. But whether Amazon becomes too powerful in the online world. The UK's offline retailers have been rather better at moving online than American ones have so we have more healthy competition online. But that needs to be monitored to stop Amazon dominating the online market place, and eventually reaping monopoly profits at the expense of consumers.

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