High Streets

Brian H. Donohoe Excerpts

Wednesday 16th October 2013 Commons Chamber

[Mr Brian Binley (Northampton South) (Con)]

I commend the Opposition on bringing forward this motion. This is a timely debate and I am grateful to have the opportunity to contribute. I wish to make two points, but first please allow me to say that in the last Parliament, in ancient history, I chaired a commission on the whole business of strategies for successful town centres. My foreword started by saying:

“Our town and city centres lie at the heart of our communities and are as vital to their health as the heart is to the body.”

That explains my commendation to the Opposition for choosing this debate.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

The hon. Gentleman is making a valid point. Does he accept that it was the Conservatives who allowed out-of-town shopping centres, which have been the reason for the town centres in my area collapsing as places of retail opportunity?

[Mr Binley]

I understand the point about out-of-town shopping centres, and I will come to that, but neither party in government has anything to crow about in this direction. I urge this Government to be more positive. Turning this into a party political battle does not help when we analyse the real causes, but I am grateful for the hon. Gentleman’s question.

I wish to make two simple points, the first of which is about the high rents and leases in town centres, especially in relation to out-of-town developments. Business rates on non-domestic properties on the high street are still massively too high. We have not caught up with the point that the hon. Gentleman was making, which was that the value of retail sites has moved yet we still think our town centres are the thumping heart of retail. If we continue to think that, we will drive retailers out of town centres completely. So we need to be very aware of business rates on non-domestic properties in high streets, which are still too high. They are also based on pre-credit-crunch valuations, so let us get real.

--- Later in debate ---

[John Pugh (Southport) (LD)]

I want to start in consensual mode by congratulating the tablers of the motion and the hon. Member for Rochdale (Simon Danczuk) on putting business rates firmly on the agenda.

I have had many discussions about the high street with traders and experts such as landlords and agents. I serve on the Communities and Local Government Committee, as does the hon. Gentleman. We have interviewed Mary Portas, civil servants, and Ministers of all shapes and sizes. We have talked about the threat of the internet, the perennial problem of parking, out-of-town shopping, pop-up shops, council policy and the like, but again and again we get back to business rates, which make it hard for businesses to start in the high street and hard for them to survive when the going gets tough.

The Federation of Small Businesses has raised this issue, as have the retail sector bodies. They are concerned not only about the actual rate but, as the hon. Member for Sefton Central (Bill Esterson) said, about the problems of revaluation and appeals against current valuations, which take an inordinate amount of time. When I raised revaluation during Business, Innovation and Skills questions not long ago, I think in the previous Session, the Minister, the right hon. Member for Sevenoaks (Michael Fallon), said, more or less—I paraphrase—“Be careful what you wish for: they may go up.” I cannot help thinking that he lives in a parallel universe or does not visit the high street all that often.

Fortunately, that is only part of the Government’s policy; other aspects have been outlined. I very much support the move to localise business rates. I like the continuation of support for the previous Government’s policy of business improvement districts. We are getting one in Southport and I hope it will be very successful. It certainly promises much and is well organised at the moment. However, they do not provide a reduction in business rates, and that is what is now required. I understand that in the latest spending round the Business Secretary considered moving on, or reducing, high street rateable values.

[Mr Donohoe]

The rates for a small restaurant in the shopping mall in my area are £30,000, but the mall owner has put the rent at £30,000 as well, so the overall cost—not just the rates—is impacting on the business, which has to make £60,000 a year before it can start to make a profit.

[John Pugh]

The problem, as the hon. Gentleman will be aware, is very specific. If we give a discount or make any kind of reduction to high street retail rates, will that include the whole retail sector and the out-of town sector? If we give it to the high street, will we also want to give it to Tesco Express? The Government have to face up to those legitimate problems.

As the hon. Member for Northampton South (Mr Binley) said, very little money is being made on the high street at present, and the amount of money that was made in the past will never be made again. The big chains recognise that and are altering their retail model. They have reduced their high street presence and will not come back in the same numbers. Ultimately, we cannot ignore that issue, but we cannot address it locally.

In some way or another, we must look to the Government to come up with a solution. That will involve the Department for Communities and Local Government, which, judging from its comments so far, is relatively sympathetic; the Department for Business, Innovation and Skills, which is broadly sympathetic, unless it is lobbied hard by the big traders; and, specifically, the Treasury, which can be fairly unbending on this subject. The Minister needs to set up a cross-departmental meeting that involves the retail sectors, joins up the initiatives—not the silly ones, such as those centred on parking on double yellow lines—and takes action on rates. If the Minister does that, I think he will become the hero of the high street. The high street can get more savvy with the web, diversify more, hold more events and extend or vary its hours, but with the albatross of business rates around its neck it simply cannot thrive.