The High Street

Nicholas Dakin Excerpts

Tuesday 21st May 2013 Westminster Hall

[Simon Danczuk]

My hon. Friend makes an important point. The question is about how Government can affect the situation locally. There are lots of examples of good practice at a local level, but we have not had a strong sense of direction or leadership from the Government on town centres and high streets.

Rather than talking about high street champions, I would like the Government to consider funding digital champions: experts in multichannel retail, who can make a real difference and work with the independent retail community to help it embrace multichannel retail to supplement shops and safeguard its future. Independents make up 69% of all shops, and we need to do everything we can to safeguard their presence on our high streets.

When we look back on high street policy carried out by the coalition Government, we see that the multitude of headline grabbing initiatives have blinded us to the elephant in the room that is causing the most damage on the high street. I refer of course to business rates. The Government have collected an extra £500 million over the past two years through increased business rates, and yet they have spent only £20 million on the Portas pilots. Week in, week out, businesses in Rochdale tell me that the tax is far too high and is dragging them close to the brink. Research published this year by the Forum of Private Business shows that 94% of small business owners think that business rates are far too high. There is a growing sense that the Government see the high street only as a cash cow to milk to exhaustion.

The sense of injustice is further embedded by the Government’s decision to postpone next year’s business rates revaluation. While London property prices continue to rise, business owners in more affluent metropolitan areas can breathe a sigh of relief knowing that the Government will keep their rates artificially low, but many northern businesses, which have seen property prices fall by 40% in some areas, have to pay the top-of-the-market 2008 rates until 2017. We end up with the absurd scenario of Burnley effectively subsidising Bond street, and Rochdale subsidising Regent street. Business rates for an Amazon fulfilment centre in Doncaster are calculated at £44 per square metre, yet for an out-of-town Comet store in Rochdale, which as we know subsequently closed, they were £125 per square metre. Even worse, the rates for one unit in a Rochdale shopping centre are calculated at £1,080 per square metre—24 times more expensive than the rates Amazon pay in Doncaster.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my hon. Friend on securing the debate and I am pleased to serve under your chairmanship, Mr Davies. Does my hon. Friend agree that, although business rates show no flexibility, landlords are being flexible over rents? Business rates represent a barrier to trade.

[Simon Danczuk]

I completely agree with my hon. Friend. I have seen properties in Rochdale with business rates that exceed the price of the rent; that cannot be right. There is a significant and serious problem with business rates. There is no doubt that they are past their sell-by date. Will the Minister use today’s debate to acknowledge that this prehistoric tax regime is unfairly holding businesses back and is not fit for purpose? The Valuation Office Agency needs an urgent overhaul and business rates desperately need reform.

Many people are of course already doing their bit to try to reform our high streets and move away from the chain stores’ monopoly, to give a new generation of people the skills to set up new and diverse businesses. I pay tribute to Retail Ready People, an initiative led by vInspired and the Retail Trust, which works with young people in Rochdale to help them set up a pop-up shop on the high street. It is working all over the country to give young people the skills and confidence to take over empty shops.

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

This has been a good debate. My hon. Friend the Member for Rochdale (Simon Danczuk) began it very well by pointing to the sharp and painful decline of the high street, and by drawing attention to the importance of the retail sector for the employment of young people in particular, and for the vibrancy of our communities and culture. As he said, local high streets are now fighting for their lives.

I am pleased to follow the hon. Member for Southport (John Pugh), who has reminded us of the obligation on high streets to reinvent themselves. That is something that they have done over the ages. In the 1950s, Scunthorpe high street was dominated by the Co-op. Every store up and down the high street, from the butcher’s and the baker’s to the carpet maker’s, was the Co-op. It has since gone through many changes, and now faces more challenges.

The challenges have been clearly spelled out in this debate. High streets are operating in the worst recession since the 1930s, with people understandably not spending money. My hon. Friend the Member for Rochdale covered the issue of the rigidity of business rates, which, still set at pre-2008 boom-time levels, act as corsets round the high street in this time of challenge. The Government should have the imagination and ingenuity to respond to that. The predilection for online shopping, which is not going to go away, is also changing habits on the high street. As my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, it is important to have a level playing field between online retailers and those on the high street.

Car parking is an issue in Scunthorpe in relation to how the high street manages to compete against out-of-town shopping. Scunthorpe has two high streets: one in Ashby, which is a small market centre, and the main one in Scunthorpe itself. Scunthorpe is being challenged by a big development proposal led by a developer called Simons, with an anchor store for Marks & Spencer, which is of course attractive to the area. There is plenty of space in the town centre that would be good for a Marks & Spencer store, but we unfortunately live in a world where the business model is to develop out-of-town retail. If local people had any purchase on the decision making, they would encourage Marks & Spencer to come to the area, but to a town centre retail position.

As Members have said, incentives encourage retailers to go out of town rather than to the high street, which is part of the challenge that we face. The Government might reflect on how best to respond. Planning permission has been agreed for the out-of-town development that I have mentioned, but the developers now want to alter it to allow them to have coffee shops on the site as well, which would further disadvantage the town centre, despite its being made clear in the original application to the planning committee that that was unlikely. Retailers feel that the advantage is moving against them.

What do retailers in Scunthorpe and Ashby say that they need to equalise the playing field? They say, “Give us two hours’ free car parking.” That is the key to the equalisation of the playing field. To be fair to Conservative-controlled North Lincolnshire council, it has gradually moved on that point. There has been a bit of kicking and fighting. I produced a 2,000-person petition in favour of two hours’ free car parking in Scunthorpe and Ashby. Retailers have made it very clear that they need it to transform their chances of staying alive through these difficult times. The Scunthorpe town team, led by Eddie Lodge and colleagues, has done an excellent job in highlighting its value for the Scunthorpe retailer and shopper, as has Keep Scunthorpe Alive, which is led by Des Comerford and town-centre retailers. Two hours’ free car parking is needed to equalise the playing field through these difficult times. It would be helpful if the Government came up with a bag of cash, but I suspect that that will not happen.

As the hon. Member for Southport pointed out, council budgets face very difficult challenges, and North Lincolnshire council is no different, but it has gradually moved towards creating two hours’ free parking. It is obvious to anybody who understands the area that if the Parishes multi-storey car park in the centre of Scunthorpe, which is not heavily utilised, had two hours’ free car parking throughout the day, with payment still being on exit, that would transform opportunities. Perversely, the Conservative-controlled council is flirting with the idea of changing it to a pay-and-display car park, and having two hours’ free car parking from about 2 pm, but that would vitiate the dwell time. When people go into town centres, we want them to spend time there and, if they bump into my colleague the hon. Member for Brigg and Goole (Andrew Percy), to have a coffee with him, without worrying about getting a ticket on leaving the pay-and-display car park—unfortunately, we have very vigilant car park attendants. I am using the debate to spell out the case for two hours’ free car parking in the Parishes multi-storey in Scunthorpe. That would be a shot in the arm for the local economy and the local high street.

I recognise and commend the work of local businesses Primark, BHS, Barclays, the Poundshop, Vodafone, and Coe and Co. They have all made investments in the town centre in the past two years, so this is a changing scene. I also highlight Fallen Hero, which won the Drapers award for young fashion retailer of the year only last year. It is a model of what my hon. Friend the Member for Rochdale called multi-channel retail, in that it has a high street presence and an online presence, and that is a dynamic way forward for the high street.