Retail

Can Labour’s five-point plan rescue Britain’s high streets?


The high street is facing its darkest hour, with tens of thousands of jobs disappearing as traditional retailers are crushed by the rise of internet shopping and restaurants are hit by tough competition and home delivery services.

Successive governments have commissioned reviews, most famously by Mary “Queen of Shops” Portas, to diagnose the problem and come up with a solution but little has happened despite evidence of an escalating crisis. This year alone House of Fraser, Maplin and Toys R Us have gone bust while household names like Marks & Spencer, Carpetright and Mothercare have together announced hundreds of store closures.

Labour’s rising star Rebecca Long-Bailey, the shadow business secretary, used last week’s party conference to announce an “emergency five-point plan” to save Britain’s high streets. So does Labour have the answers to the high street SOS?

Ban ATM charges and stop bank branch and post office closures

With 60 bank branches and 250 free cash machines closing every month, access to cash, particularly in rural areas, is getting harder. The trend has been fuelled by the dramatic increase in contactless payments and the growth of online banking. Although the number of post offices has halved to 11,547 since the early 80s the Post Office says numbers have stabilised, with the network turning a profit. The loss of banking services has had an impact on shop owners, who found takings down by an average of 20% after their local bank branch shut and had a knock-on effect on footfall, according to a recent poll by Nottingham Building Society.

“I don’t think it can be stopped,” is the gloomy assessment of Derek French, a former director of the Campaign for Community Banking Services, who spent 16 years fighting against bank branch closures. “The decision to close [a branch] is a commercial one taken by the bank and that’s been approved by both Labour and Conservative governments. It’s very difficult to alter that. It would be lovely, but when you start examining the data, which I spent more than a decade doing, it ain’t gonna happen.”

Provide free bus travel for under-25s

Local bus services have been among the casualties of austerity. The Local Government Association told a parliamentary inquiry into the future role of high streets that outside of London, 117m bus miles – nearly half of all council-subsidised services – have been lost since 2011. Labour says it will fund bus travel for up to 13 million young people at a cost of £1.4bn per year, based on bus use statistics from the National Travel Survey.

Nearly a third of shoppers rely on buses because they don’t have a car, so savage cuts to services could help explain the sharp declines in visitors that some high streets – footfall has declined by nearly a fifth over the last decade – have experienced. Research for Greener Journeys – a national campaign to promote environmentally friendly travel – found that every £1 spent on concessionary travel for apprentices delivered £2.70 in wider economic benefits.

It’s great that Labour recognises the importance of bus travel, especially for young people, and the important role that buses play in providing access to high streets and boosting local economies,” says Claire Haigh, chief executive of Greener Journeys.Governments have continually prioritised car travel over public transport.”

Free public wifi in town centres

In June Sheffield joined other cities, including Newcastle and Plymouth, offering free wifi as part of a push to encourage visitors and residents to spend more time and money in their centres. The need for “networked” high streets was one of the recommendations of the influential 2013 Grimsey review led by the former Wickes and Iceland chief executive Bill Grimsey. These services can be low cost because councils can trade access to street furniture needed to set up a commercial network, such as street lamps, in exchange for offering a free service to consumers.

But the world has moved on – indeed an update of the Grimsey review was published this year. Matthew Hopkinson, a property analyst who co-authored both Grimsey reports, says five years on Britons now enjoy generous data packages on their mobiles so pushing for free wifi is a “bit of a waste of time”. “Also what personal data do I have to share to get it?” he adds. “The biggest issue facing town centres is enabling and supporting local authorities and other stakeholders to recognise the changes taking place and to plan a future beyond retail for their communities.”

Shoppers in Darlington high street



Shoppers in Darlington high street, which has lost its House of Fraser Binns branch and is set to lose M&S. Photograph: Christopher Thomond for the Guardian

Establish a register of landlords of empty shops in each local authority

There are 50,000 empty shops in the UK, according to Hopkinson, but that figure is predicted to double within a decade as the shift online sees household names such as Marks & Spencer retreat from ailing high streets. Labour says an empty shops register would end difficulties in contacting the owner of an empty shop and make it easier to bring them back into use.

“I think this comes from the old-school perception that landlords are holding properties vacant for some reason,” says Dan Simms of the property advisory firm Colliers International, who said the plan was “tinkering around the edges”. “The fundamental problem is that people are not spending their money in physical stores, they are choosing to spend it online. Our biggest problem is not finding shops to open, it’s finding people to open shops.”

Review business rates to bring them into the 21st century

The scourge of business rates has become a cause célèbre following last year’s revaluation, which hit retailers in parts of the country where there have been property booms (rates are calculated as a proportion of a property’s value). Long-Bailey’s promise to overhaul the “broken” business rates system is a crowd-pleaser but the property tax raises about £30bn – £8bn from retailers – a year with the take helping underpin the finances of cash-strapped councils. The revaluation added to the retail sector’s business rates burden, increasing it by £226m this year.

“Bringing forward the revaluation cycle from a triennial basis is a step too far and an unrealistic ask of the Valuation Office Agency,” said Robert Hayton, head of UK business rates at the consultancy Altus Group, who says the gargantuan task of assessing nearly 2m properties costs £50m. “It would bring with it a huge cost burden likely to be borne by ratepayers”. The government studied the business rates regime as recently as 2015 and Hayton says the difficult questions have already been asked. “Rather than promises of rates reviews from politicians …what we really need is a proper taxation strategy for the digital economy, which levels the playing field and supports our high streets,” he says.

There is no shortage of brainpower being expended on the issue, with a parliamentary inquiry into the future role of high streets currently competing with a review led by the shoe repair tycoon Sir John Timpson, at the behest of the minister for local growth, Jake Berry. But Grimsey warned MPs on the housing, communities and local government committee that time was of the essence as the high street “tipping point has arrived”.

“I spent my entire career in the 20th century, along with my fellow retailers, creating clone towns up and down the UK,” he said, making the case for putting strong local leadership at the heart of any retail plan. “It is quite clear that in the 21st century that is going to be unpicked.

“There is no silver bullet. There are some guidelines, but the solutions are local. My appeal to you is that if anything comes out of this, it is a recommendation that we get on with it.”

What retailers want

A level playing field on tax Amazon’s tax bill is low because it sells from warehouses rather than high street stores. Retail chiefs want government to find a fairer way to tax the digital high street.

Reform of business rates The British Retail Consortium is calling for rates to be frozen until the 2021 revaluation and an overhaul of the system.

Lower rents Buoyant retailer Next has asked for a clause in new leases so its rents falls back in line with those of neighbours that are using insolvency procedures.

Accessible high streets Expensive and inadequate parking is a major bugbear.

Fewer stores Upkeep of ageing high street stores is a big cost for retailers, who prefer shiny, purpose-built shopping centres and retail parks with parking directly outside.

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