High Streets and Town Centres in 2030

Bob Blackman Excerpts

Thursday 13th June 2019 Westminster Hall

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to serve under your chairmanship, Mr Stringer, I believe for the first time. As a distinguished former leader of a city council, you will understand the importance of the high street not only to our towns and cities but to people across the country. I apologise to the hon. Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, for being slightly late for the debate; I was engaged as the secretary of the 1922 committee, administering the ballot for the leadership of the Conservative and Unionist party.

I have a long memory of the high street; when I was a young lad, the shops were open probably five days a week: on Saturday all day, closed on Wednesday lunchtime and often closed on Monday, too. It was the advent of another subject dear to my heart—large-scale immigration to this country—that enabled the Gujarati community and others to come here and see the benefit of cornering the market and opening for longer. That shows how retail outlets have to change with the times. It is no longer good enough to be open from 9 to 5.30 or 6; shops have to be open seven days a week to make money.

I think it is fair to remind the Minister that this report is cross-party and its recommendations are agreed and strongly endorsed by all members of the Select Committee, so they have a lot of strength behind them. I want to touch on one or two things that are appropriate on this issue. First, to rejuvenate our high streets, I agree with the hon. Member for Dulwich and West Norwood (Helen Hayes) about allowing retail properties to be converted to rather unsuitable homes for people. They were originally intended to be retail units and were not built as homes, and often they are unsatisfactory.

However, there are large numbers of flats above high-street shops that were originally made as homes. A lot of those have been converted to become storage units, office space or for other purposes. To rejuvenate our high streets, we need to get people back to living in those properties. In times gone by, the shop owners would live above the premises and have a very short commute to work. These days, that is not the case. We need, and should encourage, a rejuvenation project to encourage those properties to be brought back into use for living accommodation.

The Chair of the Select Committee mentioned our visit to Darlington and Stockton. It was shock to us that Marks & Spencer—a key store in the middle of the high street—had closed down. We asked why, and were told that it could not make money. It had a 250-year lease on the property, and the property owner quite reasonably said, “Fine. You just keep paying us for 250 years.” No one would take on the lease because it was too expensive, so it blighted the whole high street. The Government need to look at ownership of properties, because without understanding who owns properties and what pressure can be brought on them to change the basis of rent or encourage them to let the properties at a reasonable rate, our high streets will be blighted forevermore.

I was also struck when I had a briefing from Tesco about business rates and their impact on its stores. Tesco, a very successful company across the UK, has concentrated not on the big retail stores but the smaller, Metro-type operations on our high streets. That is welcome because it brings retail back to people at a reasonable price, drives footfall and encourages the development of other comparable retail units on the high street. The slight problem is that its finances on turnover and business rates are remarkably tight. It makes only something like a 4% margin, so if retail sales fall, those stores will be in potential crisis. If they close, many other stores along that high street will close with them, because people will not go to them. There is a fact of life that we must look at: frankly, business rates for retail units are not fit for purpose and need fundamental reform.

The arguments about an online sales tax are reasonable, and I think there are concerns. The first question is whether we can collect the money. Business rates associated with a property are relatively easy to collect. However, an online sales tax should also be reasonably easy to collect. The next issue is where that money goes. If an online sales tax is introduced on warehousing or companies such as Amazon, will it be collected from a central point and then distributed? How will it be provided to local authorities, which will depend on business rates, or some form of business taxation, for their funding?

My answer is that we need an online sales tax, but it needs to be set at a reasonable rate—1%, 2% or whatever—and then distributed on the basis of the business rates income that otherwise would have accrued to a local authority. That is one way we could make this happen. Not reforming business rates is completely unacceptable, because the burden will become greater and greater. The other issue that affects retail units is that, as the Government response to our report shows, the Government have done a whole series of complicated things that, frankly, have distorted the market completely. They have distorted business rates and made them even less fit for purpose, which is why we need fundamental reform and review.

High streets up and down our country have gone through various problems, and many of them are looking a bit tired. They need to be refreshed and reconsidered. We need new ideas, new shops, new facilities and encouragement from local authorities to increase footfall to those premises. We must build up the partnership between local authorities and retailers. It is a symbiotic relationship: the reality is that if local authorities do not co-operate with retailers, they will lose business rates income, which will be even more important to them in the future. We look to my hon. Friend the Minister to come up with some wise words and stronger action—particularly on business rates, on which the Government’s response was rather disappointing. I hope we see further action from the Government in that area.