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Business Rates: High Streets

Volume 759: debated on Monday 23 February 2015


Asked by

To ask Her Majesty’s Government, in addition to business rates reform, what steps they are taking to support high streets in the United Kingdom.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest in that a member of my family works in the retail trade.

My Lords, since 2010 the Government have helped to create over 360 town teams and given over £18 million to towns, funding successful initiatives such as the Love Your Local Market and the Great British High Street portal and awards. In addition to over £1.4 billion in business rates support, we have eased restrictions on planning and are strengthening the role of business improvement districts and tackling aggressive parking enforcement.

It is very welcome to be reminded of all that the Government have done so far. Indeed, it is fair to say that this Government have done as much as any Government to help business in general. Nevertheless, are Her Majesty's Government aware that there is a real crisis in the high street? In particular, the high street is facing increasing competition from online, where businesses pay no business rates, as well as from out-of-town stores, where there is free parking and lower business rates? Against that situation, is it not bizarre that a 2% business rate is to be imposed, when the CPI is 0.5%? Against that, will my noble friend ensure that the review will bear those points in mind?

My Lords, I thank my noble friend for pointing out what this Government have done to help the high street and businesses in general with business rates, relief corporation tax, help with national insurance contributions and easing up on some of the parking enforcement issues that are holding trade back.

My noble friend asked about online trade putting further pressures on the high street. In fact, online trade has in some ways benefited the high street through the massive increase in click and collect. I do not know about my noble friend, but every time I click and collect I click and collect some more while I am there. He also talked about out-of-town shopping centres and parking. What he says is true but, as I have said, we are clamping down on harsh enforcement. He also asked about the review of business rates. That is forthcoming, and there will be details on that shortly.

My Lords, it is not a question of clicking, picking up what you have bought and buying a bit more; the Question is really about people shopping on the internet and the goods being delivered to their front door. In many towns and villages—this is most certainly happening where I live—shops are closing.

My Lords, many online retailers also have a presence on the high street. My point was about the big increase in the popularity of click and collect. Online trade is certainly increasing more and more each year, but in December high street retail sales also increased, compared with the previous December.

My Lords, is the Minister aware that many local authorities, especially in London, are saying that the fairly recent planning deregulation to allow the conversion of offices into residential properties is having a very damaging effect on their local economies? Will the Government consider establishing an independent review to get some accurate information on the effect of this change?

My Lords, a report by the distressed town centre property task force acknowledged that the UK has too much retail space. Clearly, we also have a huge demand for housing. Houses in town centres can help to revitalise our high streets for both the daytime and the evening economy, making them much more vibrant and safe places to be.

My Lords, I declare an interest as an elected member of Lewisham Council. Our high streets are in crisis. Recent figures show that 16 shops a day are closing in our town centres. When will the Government give local authorities real powers through planning and other processes to enable our high streets to have the variety of shops that local communities need and to make them more sustainable?

My Lords, in fact, vacancy rates were down in the second half of 2014 compared with February 2012, although I accept that there will be some regional variations in that. As I said in answer to a previous question, retail sales were up in December 2014 compared with December 2013, and click and collect is becoming very popular. The Government have outlined a number of measures, many of which are being implemented, on planning, clamping down on the use of CCTV in parking enforcement, help with employers’ national insurance contributions and corporation tax. Corporation tax will be down to 20% by April 2015. That is a reduction of 8% since 2010, making us one of the countries with the lowest corporation tax in the G20, and by far the lowest in the G7, and therefore making our high streets a good place to do business.

My Lords, while my noble friend is absolutely right to draw attention to the measures which the Government have taken, and the reduction in corporation tax is very welcome, online retailers such as Amazon do not pay any corporation tax or any business rates and are therefore at very considerable competitive advantage compared with ordinary high street retailers. Is it not time that we looked at the tax system with a view to recognising that the world of retailing has changed because of technology?

My noble friend is absolutely right: the world of retail has fundamentally changed over the last 10 to 20 years, with online sales hugely increased. Actually, our high streets are being used for a different purpose than they were 20 years ago, for example. The Government are committed to tackling the avoidance of business rates and have published a discussion paper, which closes for comments at the end of this month.

My Lords, the Minister has already referred to the threat from online shops to the neighbourhood high street and to the action that the Government are taking against “harsh enforcement of traffic regulations”. Is she aware that this is often not manifest on the ground, and that enterprising new firms such as Hubbub, which are trying to enable high street shops to compete by providing a home delivery service, are finding huge problems with any enforcement of traffic regulations; they are simply unable to load in the high street? Can she be more specific about the action she is taking to tackle this problem?

My Lords, there are a number of initiatives, including business improvement districts, to provide flexibility certainly around loading areas, but there seems to be quite a mixed picture: in some areas, parking enforcement is overly harsh, whereas in others it is perhaps not being enforced enough. CCTV is now being used for a purpose for which it was not originally intended.