A £3bn letter to No. 10 North

There is a new occupant of Number 10 and, for the first time, a second front door in Manchester. Andy Burnham has said No. 10 North exists in part to regenerate towns and to prioritise the places that have missed out. Lancashire has plenty of both.

So I have written to him. The letter went in the post this week, and I would like to put the argument in front of this readership too, because it is a question about tax and competition rather than sentiment.

A £1 levy on every home delivery in the UK, charged on the retailer at the point of sale, remitted with VAT, and ringfenced in law for the town centre in the area it was raised.

The arithmetic is not small. Around five billion parcels move through the UK each year. Take out business to business traffic, lockers and click and collect and you are left with something like three to three and a half billion residential deliveries. At £1 each that is roughly £3bn a year, of which around £68m would be generated in Lancashire.

It is not a novel idea either. Colorado has run a retail delivery fee since 2022 and raised $75.9m in its first year, hypothecated to transport. Minnesota followed. Both exempt smaller retailers by turnover, and that exemption is the design point rather than an afterthought. This should bite on the giants and leave the independent who posts out a few orders a week entirely alone. Charge per order rather than per parcel, zero rate collection from a physical shop, and exempt prescriptions and deliveries to housebound customers.

The case for it is the scale of the imbalance it corrects. Retail is roughly a twentieth of the economy and carries about a quarter of all business rates. Amazon paid around £190m in rates last year against £8.26bn of revenue in its main UK services business. Tesco pays in the region of £700m across two and a half thousand shops. A shop is taxed on its shopfront. A distribution shed off the M65 is taxed on a shed.

The prime minister's proposed warehouse levy is a serious attempt to fix that from the property side. A delivery levy fixes it from the transaction side, and it has one advantage the property route does not. It cannot be sidestepped by a retailer that happens to own its own logistics, which is precisely the position of the largest operator in the market.

I should say I am not looking at this from the outside. I have worked on the delivery side of regeneration schemes in Lancashire mill towns and seen how that money actually behaves. Bidding rounds that consumed more in consultancy than some places eventually received. Steering groups that met for the best part of two years and moved nothing on the ground. Priorities rewritten every time the department changed its mind, then a scramble to commit before a year end deadline on whatever could be procured in time. Good people, real budgets, no continuity.

That is the flaw a levy fixes and a grant round structurally cannot. Three billion pounds a year is not a competition to enter and a photograph to take. It arrives, it arrives again the following year, and a town can plan against it. Every high street scheme of the last fifteen years has failed the same way. The money came once and left.

I run markets for a living, so I will declare the obvious interest. But I would also offer the evidence. People will travel, park and spend properly if you give them a reason to turn up. That reason costs money to create, and for fifteen years we have asked traders and volunteers to produce it on goodwill and a hashtag.

"There was an invitation in the envelope too, and it stands. Come to Whalley, prime minister. It is forty minutes from your new front door. The artisan market runs on the last Sunday of every month, behind The Swan, eleven until four. There are no ribbons to cut and no babies to kiss. Just an hour with the traders, because this argument makes considerably more sense stood in front of them than it does on paper."

Campaigns cannot beat cost structures. Only tax policy can.