An Amazon boss squirmed after denying the online giant is 'single-handedly killing the high street' as an MP accused it of taking advantage of low bu
An Amazon boss squirmed after denying the online giant is ‘single-handedly killing the high street’ as an MP accused it of taking advantage of low business rates.
Amazon director of public policy Lesley Smith was grilled by a parliamentary committee investigating the death of UK town centres as shops close down.
MPs suggested Amazon was taking advantage of lower business rates because they have out of town warehouses rather than high street shops.
Ms Hayes says said high street shops complained online firms ‘are paying less tax while taking advantage of the same services and infrastructure than bricks and mortar retailers’.
Ms Smith insisted that her company incurs other costs, such as the need to invest in technology and delivery. She denied Amazon searched for places with low local business rates to avoid paying as much tax as competitors.
Clayton Hirst, from John Lewis, told the committee that businesses like his face much higher business rates and taxes for employees compared to online-only retailers.
Committee chairman Mr Betts made a formal request on the Amazon boss to provide her business rate figures and sales figures.
Ms Smith said she would ‘seek advice’ before handing over the company’s figures.
She was questioned after shocking new statistics revealed 93,000 retail jobs have been lost in the past year amid a crunch on the high street.
Ms Smith denied Amazon was the problem, insisting retail is a ‘changing environment’ and her company was simply ‘meeting customers where they want to be’.
Communities Committee chairman Clive Betts MP asked the four online bosses: ‘Is it true Amazon is single handedly killing the high street?’
Ms Smith replied: ‘I would say for Amazon that 82% of retail in the UK is from physical rather online, so only 18% is actually online of which we are a part, but a relatively small part.
‘And there is a huge amount of innovation on the High Street and that’s partly because customers have changed the way they shop for the same things they always have done.’
Mr Betts replied: ‘But 18% is 18% of sales that would otherwise be being done physically in shops.’
But Ms Smith insisted Amazon was in fact supporting high street stores and even setting up some new shops.
‘Half of the things that are bought on Amazon, are not bought from us, they are bought from third party business, many of which have got high street stores,’ she said.
MP Helen Hayes said shops in her constituency say customers often browse in store then, once they’ve chosen what they want, go home and buy it online.
Ms Smith repeated her claims that Amazon helps shops.
The online bosses were questioned over sports tycoon Mike Ashley’s idea of a 20% tax on online sales.
They all rejected the idea, with Andy Mulcahy, from online retail association IMRG, insisting it would be a ‘backward step’.
Explaining the success of online firms, Mr Mulcahy said British consumers were particularly open to only shopping due to good roads allowing quick delivery, trust in businesses not to defraud customers, and a history of ‘distant selling’.
There have been a string of high-profile store closures as shoppers desert town centres and flock to web titans instead.
Analysis by the British Retail Consortium shows there were 3m people working in retail in September, the most recent month for which figures are available, down from 3.1m a year earlier.
Household names Marks & Spencer, Debenhams and House of Fraser have all announced store closures, while others such as Maplin, Toys R Us and Poundworld went bust this year.
Tough trading conditions triggered by the rise of the internet and a temporary squeeze on living standards after the Brexit vote are behind the crisis.
And campaigners have warned that sky-high business rates make it even worse, by forcing companies to spend vast sums on tax for shops which are struggling to turn a profit.
Jessops chairman and Dragons’ Den star Peter Jones said the Government needed to do more to ease the burden on retailers.
‘Sadly we’ve spent so long looking at and focusing on Brexit, we’ve really tiptoed around trying to support the High Street,’ he said.
‘If the Government doesn’t take action we’re going to see many more brands on the High Street dissipate like an Alka-Seltzer in a swimming pool.’
Sports Direct tycoon Mike Ashley has called for a tax on internet shopping to help revive the High Street’s fortunes. In an extraordinary exchange with MPs this month, Ashley said the ‘internet is killing the High Street’.
Source: Daily Mail, UK