“We’ve seen reviews, pilots, future high street forums and more. But none of these initiatives are making much impact and there is a frustrating sense of policy being conducted in the margins. The need to grasp the nettle is bigger than ever.”
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He acutely identifies the most serious challenges facing the industry, saying:
“The bigger area of concern, though, is the plight of smaller retailers. Many remain horribly stressed financially with an average rating that hovers perilously above the Company Watch warning area. The same pattern applies in the supply chain. For independent shops, a sector that the Business Secretary has previously acknowledged to be an essential part of a healthy high street, the future looks very uncertain. The fact that our analysis shows 46.6 per cent of all retailers in the UK are in the warning area, and by definition at serious risk of failure, should be a loud wakeup call to ministers”—
“As a check up on the health of the high street, the prognosis is not good. Over 20,000 businesses are at risk and we can expect more and more business failures”
“There are around 40,000 empty shops in the UK, and this has remained”
“constant over…three years.”
The question must be, what are local government and central Government going to do about that?
Part of the answer, undoubtedly, is to enable change of use for premises. What the Government are doing on change of use, however, is making things worse, not better. We know that the consequence of the Government’s changes, particularly those since May, has been to allow more bookies and payday lenders to set up shop on our high streets. The Government are taking away from local authorities the ability to shape what is happening on their high street and to respond to community demand, yet we know that communities want their local authorities to have more control of high street improvement.
A recent survey by Deloitte shows that 73% of people want customers to have a strong role in shaping the high street, and 47% want local authorities to be able to do that. Only 13% want landlords to be able to shape what happens on the high street, yet that is exactly what we have ended up with under this Government. Because planning permission is no longer required for many changes of use on our high street, our local authorities and communities have no ability to shape what is happening. That is the exact opposite of the approach that the hon. Member for Cleethorpes (Martin Vickers) suggests, which is that local authorities should have powers to shape what happens on the high street, such as by having more rights to purchase properties compulsorily.
The hon. Member for Congleton (Fiona Bruce) made an excellent point on local authorities using social value clauses to help, for example, local people set up start-up units—there would be more pop-up shops. That is exactly the set of uses that local authorities might want on their high street, but if it is simply left to the market to say how empty properties will be used or changed, we are not likely to get the sorts of premises that local people want.
What is likely to happen, as I witnessed when I visited Woolwich high street last week, is that in a row of 16 shops, nine will be payday loan companies or bookies. Local people told me that they are very unhappy with the situation. They said that, in the past couple of years, the council had indeed spent money on the town square but that it was being thoroughly undermined by the number of fast food outlets and so on in the area.
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The last time I raised that point with the Minister, he went out and said to the media, “This is about Labour trying to say to you that you shouldn’t be able to buy a McDonald’s.” I make it clear that that is not what we are saying; we are saying that people do not want an over-saturation of a particular type of shop on their high street. As the hon. Member for Brentford and Isleworth (Mary Macleod) said, what we need is diversification on our high street. People are telling us clearly that they want independent retailers and community uses; they do not want to see one type of premises taking over the high street.
I hope the Minister will help us to understand how the Government’s approach will assist with that diversification, because I cannot see that approach operating in practice. In fact, we know from across the country that the opposite is happening. The Government could do more. The Government must urgently address change of use and the relaxation of permitted development, and they must give local authorities and communities real powers to shape their high street. That is urgent, but the Government need to do other things. They must consider the wider economy, too.
A recent report by the Centre for Cities claims that the biggest factor affecting the success or failure of our high street is the overall strength of the town or city centre’s economy, and the slow economic recovery over the past three years has really affected the high street. The Government should be doing more to address business rates, increasing rents and higher energy costs, all of which are particularly affecting small business. Again, small businesses themselves are asking the Government to address those issues urgently.
Mr Charles Walker (in the Chair): I thank the shadow Minister for her perfectly timed speech.
4.15 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): It is a pleasure to serve under your chairmanship, Mr Walker.
I congratulate the Members who secured this debate, which has been very interesting, not least because, in the main, it has been positive about the great things that are happening across our high streets and town centres. There has been positive consideration of what more can be done to ensure that, in the 21st century, we have town centres not only that we can be proud of but that serve and reflect what the community needs and wants. From that point of view, the debate has been extremely good, interesting and positive.
One of the fundamental differences between the hon. Member for City of Durham (Roberta Blackman-Woods) and me—my hon. Friend the Member for Cleethorpes (Martin Vickers) outlined this fairly well—is that I think the high street is what we make it. We have to understand that the high street is changing. In some ways, the high street will get smaller and town centres will shrink as retail demand changes. I will address that in a moment.
It is very much not for the Government to manage the high street from the top down. The Grimsey report outlines, and I have discussed this with Bill Grimsey,
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that the Government should dictate exactly how a high street plan should be done and who should do it. The report contains an idea for taxing successful retailers to help less successful or smaller retailers. We certainly will not be considering the introduction of more taxes that hit retailers in the way that the previous Government perhaps would have done.
We clearly want businesses to have flexibility. When I talk to businesses, they say that they want flexibility to evolve and reflect. To be entirely honest, I am slightly confused by the shadow Minister’s comment that we should have flexibility for diversification without allowing flexibility for planning changes in the high street. I am not sure how we can have it both ways. The reality is that councils have the ability through planning permission, not least through article 4 and through the regulation of gaming, to ensure that the high street balance is correct.
On fast food, I have never said anything of the sort suggested by the shadow Minister. The point I have made previously is that it is not for the Government to dictate whether there are too many or too few fast food restaurants. High streets and town centres will reflect what we, as customers and consumers, demand through how we shop and what we use, whatever the company—whether it is a small local business or a big brand name.
Big brand names are often run by local business people, either directly or as a franchise, and they certainly employ local people and spend good money on their shops. They can be an important part of the high street. As my hon. Friend the Member for Brigg and Goole (Andrew Percy) said, we tend to miss those companies when they start talking about moving, but, equally, they are an important part of the high street. We should not knock that. The big brand names are there because we use them, which is the reality of life.
The hon. Member for Stockport (Ann Coffey) made a thoughtful and powerful speech on the digital world in which we now live. I think that we are now the country with the highest online shopping usage as a percentage of shopping population. We must be aware that things are changing. Google glasses are potentially part of what we could be seeing in future.
The hon. Lady is right that we need to spread best practice. A debate such as this—we have heard some examples this afternoon—is a good way to do that. We have put £1 million into the Association of Town Centre Management, and the future high streets forum is considering how we share best practice, whether it is through the 333 town teams, through volunteers working in their local area or through the Portas pilots. More generally, we are all working across the media to promote good examples of best practice.
In my constituency of Great Yarmouth, we have a town centre partnership and a business improvement district, or BID. I am a huge fan of BIDs. One of the things that the Great Yarmouth BID has done is to introduce wi-fi across the town, which has been massively welcomed by the local community. The hon. Lady is absolutely right that we must ensure that our towns embrace such digital technology, not least as retail and our high streets change. I appreciate the title of the debate, but our high streets are growing towards being not only somewhere that we go to shop and do other things, but a destination for leisure and hospitality where we may do some shopping. We must recognise that fact.
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My hon. Friend the Member for North Swindon (Justin Tomlinson) touched on his experience and declared himself another unabashed Mary Portas fan. He can join my club. Mary Portas has done a fantastic job, not least in raising the issue’s profile and setting out a journey and ideology, to which the key is recognising the unique selling point of every individual town centre.
From the success of the Portas pilots and town teams around the country, we can see that there is no homogeneous tick list; different things work differently in different places. Good things can work brilliantly in one place, but they will not necessarily work somewhere else, so we must examine how different areas evolve. I congratulate The Daily Telegraph on its current high streets campaign, a part of which is a competition to find, through its readers, the best high street, and I am delighted to be chairing the panel. An interesting thing that has come from that is how every area is different and how areas are embracing their differences to make them stand out as unique selling points.
My hon. Friend also mentioned parking charges. Braintree, for example, saw a 40,000 increase in footfall as soon as parking charges were reduced. Parking charges are an important part of the mix, and areas should be acutely aware of that. He was also right to highlight young retailers and young people being part of the high street. The high street should absolutely be a leisure and hospitality area, which is a point that links perfectly to the contribution of the hon. Member for Tynemouth (Mr Campbell). He spoke about the importance of safety on our high streets, particularly given the growing night-time economy. That economy is to be embraced as an important part of the high street, but the staff who work there need to be safe. People have the right to be treated with respect and will provide good customer service as a result. Equally, when our children and friends go out, we want to know that they are safe. They have the right to feel safe.
My hon. Friend the Member for Cleethorpes described the changing shape of the high street. He mentioned the small business rate relief, and I am proud that the Government have trebled that to over £900 million to help businesses right across the country. He makes a fair point about how retail is changing and how retail spaces in many areas need to shrink. I am pleased that we are consulting on the flexibility to change retail spaces back to residential use, which would increase footfall in our town centres and allow them to reflect the change towards leisure and hospitality.
Hair and beauty, and the service industry in general, is one of the fastest-growing parts of the high street. Businesses such as Fusion in Gorleston in my constituency have spent a fortune improving their shop fronts. My hon. Friend the Member for Congleton (Fiona Bruce) mentioned the future high streets forum. I am looking at its membership and want to change it slightly to reflect the hospitality and leisure aspect of high streets, including the service industries. Hairdressers, for example, have not been a part of it before. The high street economy is no longer just about retail. It is widening and small businesses represent a part of that.
My hon. Friend the Member for Brentford and Isleworth (Mary Macleod) mentioned parking and pop-up shops. We practise what we preach in the Department for Communities and Local Government—not only did we proudly cut our costs by 60%, but we also have a
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pop-up shop, which I recommend for hon. Members’ Christmas shopping. She is right that areas should be considering such things. In Great Yarmouth, our town centre partnership and the council are looking at exactly that sort of thing, almost as an alchemy centre to give new independent retailers the opportunity to develop, to test the market and to grow.
My hon. Friend, along with other hon. Members, also referred to business rates, about which I do get comments from time to time. We must appreciate that not only do we have the autumn statement next week—I would not want to prejudge what the Chancellor will say—but that retail is only one part of business rates. When we looked at the revaluation, we found that there would have been 800,000 losers and just 300,000 winners, of which retail would have been one, as would much of the hospitality and leisure industries. We must be cautious when making presumptions about business rates, but we can discuss that another time. I outlined the matter during Communities and Local Government questions on Monday.
My hon. Friend the Member for Congleton mentioned local enterprise partnerships, which should, where relevant, consider town centres as important. In some areas, if employees will have somewhere good to go, the town centre can actually be part of what will attract a company to invest in an area. A good, vibrant town centre can be the heartbeat of a community. My hon. Friend the Member for Brigg and Goole touched on that when he mentioned the town centre being at the centre of a community.
Charity shops do have an important part to play. My hon. Friend the Member for Congleton mentioned research, and Demos is currently carrying out some on this very issue. Good charity shops can play an important role in the community. They receive both good and bad press, but any kind of retail outlet on the high street can be good or bad depending on how it is presented and looked after. Charity shops sometimes offer coffee facilities and can also get involved running community events from their stores. They can also be a huge draw for footfall.
My hon. Friend also touched on planning, and councils now have the ability to have a play in that system through their local plan. We have discussed this before. I hope that her council will hurry up and get its local plan in place. I am quite happy to chastise them a little as it has been somewhat slower in getting its plan together than residents would appreciate.
My hon. Friend the Member for Brigg and Goole made important points about how the town centre should be the heartbeat of its community. I am pleased that he has such a positive view of the future and he is quite right to do so. The town centre is an important source of employment in the community and can provide a fantastic career path. Despite the numbers of people employed in hospitality and retail in this country, we often undervalue the sector and do not promote enough just what a fantastic career it can be. Someone starting out in retail could end up in the House of Commons, which could happen to anyone, or they could have a fantastic career in retail, which goes across many different organisations, or they could be an entrepreneur running their own independent business—hopefully benefiting from the Government’s small business rate relief.
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In conclusion, our town centres have a really good opportunity as we move forward. Change is happening on the high street and the high street must change. High streets should grasp the opportunity to become what the consumer wants them to be in the 21st century. The Government must tread a careful line. We want not to interfere and create false economies, but to create a facility where local people, local businesses and local authorities can work together to provide what we all want—vibrant, successful high streets and town centres that are the heartbeat of their communities and successful not just now, but for years to come.
4.27 pm
Ann Coffey: With the leave of the House, I will briefly respond. Thank you, Mr Walker, for chairing this debate. I thank my co-sponsor and co-chair of the all-party group, the hon. Member for North Swindon, whom I look forward to working with on retail issues. He clearly has huge knowledge and real experience in the sector. I also thank the shadow Minister and the Minister for their thoughtful replies.
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I thank all hon. Members for their contributions, which were based on their different experiences and different constituencies. It is a strength of the constituency system that it enables Members who represent big cities, rural communities or coastal towns, where many different things happen, to contribute to such a debate. The range of topics has been huge—jobs, crime, planning, parking, partnerships, empty shops, local initiatives, business improvement districts and everything else.
It has been a fantastic debate that has shown the complex interaction of factors, and that the problems are not easily solvable by one simple public policy or private initiative. I stress again that we need public-private partnerships to provide innovation and to transform the high street, but they must be the right kind of partnerships, namely those based on evidence of the right kind of interventions.