Growth and Infrastructure Bill

Memorandum submitted by CAPITAL SHOPPING CENTRES (GIB 71)

About Capital Shopping Centres

1. Capital Shopping Centres (CSC) is one of the largest shopping centre operators in the UK. We can therefore offer a unique perspective on the support this sector needs to grow from our operations across the country. We own and operate many of the very best shopping centres, in the strongest locations across England, Scotland and Wales, attracting over 320 million customer visits a year.

2. Half of the UK population, 30 million people, visit a CSC centre every year and two-thirds live within a 45 minute drive time of one of our centres. With over 16 million sq ft of retail and leisure space and a valuation of £7 billion, every single one of the UK’s top 20 retailers is in our shopping centres, alongside some of the world’s most iconic global brands.

3. We own ten of the UK’s top 30 shopping centres including The Trafford Centre, Lakeside, Metrocentre, Braehead, and The Mall at Cribbs Causeway, and in-town prime destinations such as Cardiff, Manchester, Newcastle, Norwich, Nottingham, Bromley, Uxbridge, Watford and Stoke-on-Trent. 

4. We are major employers and economic contributors to the communities in which we operate and are fully committed to supporting our local communities and the wider environment through investment and corporate responsibility initiatives. We are long-term investors in our centres and plan to invest over £1 billion in the UK over the next ten years.

Overview

5. We welcome proposals in the Bill to bring greater speed and certainty to the planning process. These changes should allow applications for sustainable development to be taken forward in a timely fashion without undue cost to local authority or applicant.

6. However, there are other measures in the Bill which require further clarity or where we feel the Government could introduce further measures to generate economic growth. Along with much of the retail and property sector, we also remain deeply concerned that the measures set out in Clause 22 will have a negative impact on economic conditions in some of the areas hardest hit by the recession.

Promoting Growth and Facilitating Infrastructure

7. CSC has a major investment pipeline that would see up to £1bn invested across the country in the next ten years. We therefore hold a strong interest in planning policy and its implementation. The Bill sets out a number of measures around planning which we welcome in this regard.

8. CSC was broadly supportive of the new National Planning Policy Framework and its aim to simplify the planning system and remove unnecessary regulation. In particular, we very much welcome the presumption in favour of sustainable development enshrined in the NPPF.

9. However, we continue to find unnecessary barriers to growth created by local authorities and wish to ensure that this principle of the NPPF is implemented in practice. The Bill makes some provisions in this regard but we believe it could go further. In particular, we believe there should be a firm provision within this Bill to ensure that local authority compliance with the NPPF is monitored and can be ensured.

10. We believe that Clause 1 of the Bill goes some way in this regard and is a welcome measure. It will help ensure local authorities engage more thoroughly with business and  expedite decisions to provide greater business certainty.

11. Likewise, we believe clauses 12 and 13 on Village Greens would provide a welcome legislative control in this area. CSC has seen first-hand the effects of costly and opportunistic claims to establish village green status on land which could never reasonably be considered as such and where town centre investment is planned. At the moment, developers and local authorities are often faced with high costs and delays to defend against these vexatious claims, without any responsibility on those who bring the most spurious applications in the first place. The proposed amendments in this area are therefore welcome.

12. We would like to see a little more clarity in clause 4 of the Bill. We welcome this provision, which will make reporting duties to planning authorities less onerous than previously, but would welcome further expansion of what would be "reasonable" under this provision.

13. In clause 5, we support the principle of allowing applicants to vary affordable housing requirements contained in a planning obligation. However, we would also urge the Committee to consider widening this provision to allow the renegotiation of obligations other than those specifically relating to affordable housing under Section 106 agreements, to unlock stalled commercial schemes.

14. We would also like to add our support to clauses 9 and 10 of the Bill, dealing with stopping up and diversion of highways and of public paths, which will again remove hurdles for development.

Postponement of Business Rates Review

15. Capital Shopping Centres has a significant interest in the business rates system as one of the largest shopping centre operators in the UK, as do many of the retailers in our centres. In 2011, Capital Shopping Centres and its tenants paid over £237 million in business rates.

16. Business Rates have risen steeply in recent years and are now one of the most significant costs for many businesses. Untenably high business rates have been cited in the closures of several significant UK retailers during the economic crisis, including Clinton Cards and GAME Group.

17. The Bill provides an opportunity for the Government to address the more onerous aspects of the Business Rates regime. However, we believe it fails to do so and even exacerbates some of the problems caused by Business Rates through the postponement of the next rating revaluation.

18. The proposal in this Bill to postpone the next rating revaluation by two years to 2017 has been received negatively across the property and retail sectors. We recognise these concerns but believe that the delay could present an ideal opportunity for a wholesale review of the Business Rates regime.

19. We urge the committee to consider introducing a two-year freeze in the business rates multiplier into this Bill to correspond with the two-year delay to rates revaluations. This will protect businesses from further large increases in their business rates liabilities year-on-year, following on from the 4.6% and 5.6% increases seen in 2011 and 2012. In particular it will prevent struggling businesses that would otherwise see their business rates liabilities reducing in a 2015 revaluation from instead seeing further business rate increases.

20. We further propose that the Bill Committee should specify the need for a formal consultation on the future of the business rates regime during this period. This consultation should address a number of issues of concern to industry around business rates. In particular, we suggest that a formal consultation should consider reviewing or reversing the recent significant reductions in empty rate relief and examine the link between the business rates multiplier and the Retail Price Index. Furthermore, we suggest that a consultation should consider the impact of transitional relief, which at present acts effectively as a subsidy to businesses in London and the South-East at the expense of business in less wealthy regions.

21. We urge the Committee to consider a duty on local councils to provide further support for businesses as part of the business rates which they will now be able to retain under the Local Government Finance Act 2012. Under this Act, local authorities will be able to retain a proportion of the business rates generated in their area, and will be able to borrow against predicted future business rates. In practice, this could act as an incentive for councils to concentrate on securing new business rates by attracting new business to the area and potentially to neglect established businesses who need support.

22. We recommend that the Committee considers including in this Bill a requirement for councils to ring-fence a proportion of retained business rates to provide a hardship fund for struggling businesses under their jurisdictions. This would complement the key aim of this Bill to promote growth by helping to support the existing economic base of a community, safeguarding investment and protecting jobs, local high streets and other business communities.

November 2012

Prepared 10th December 2012