High Street Rental Auctions

Rushanara Ali Excerpts

Wednesday 26th February 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rushanara Ali)]

It is a pleasure to serve under your chairmanship, Mr Vickers. I congratulate my hon. Friend the Member for Bournemouth West (Jessica Toale) on securing this important debate. I believe it is her first Westminster Hall debate, so it is great to be responding to it. I know that she is a passionate advocate for her local high streets, including in her campaigning against post office closures.

High streets have been the subject of several debates recently, and there will be another later today focused on support for high street businesses. We have heard quite a bit already about that. This is a multifaceted subject, and the Government are pleased to have the chance to discuss the specific and important dimensions of our plans. The Government share hon. Members’ passion to support the growth and evolution of our town centres and the revival of our high streets. We all recognise that high streets were once the lifeblood of our towns and cities, sustaining jobs, businesses and communities. I know from my own constituency, although it is in inner London, that there are challenges when major stores close and so on.

The Government are committed to ensuring that high streets become successful again, despite the challenges that they face in adapting to consumer behaviour and the demographic change of the 21st century. Before I get into the specifics of what the Government are doing, I will gently point out to the Opposition spokespeople the context in which we are operating. In the 14 years before the general election, we saw austerity during the coalition Government, the economy being crashed under one of the Prime Ministers, and record under-investment. We have seen the spectre of high street shops facing shoplifting and much else.

We are trying to fix a set of challenges, and we are using the powers that were introduced under the previous Government pragmatically, making sure that they are deployed appropriately in the wider context while revitalising our high streets. I genuinely hope that we can work together to ensure that revitalisation, because while each of our constituencies has challenges, we have heard wonderful examples of vibrant high streets in the past. We need to be pragmatic and work together to fix them, and I hope that colleagues from Opposition parties will work in that spirit.

Before the general election, the Labour party set out its five-point plan to breathe life back into Britain’s high streets. It includes addressing antisocial behaviour and retail crime, reforming the business rates system, working with the banking industry to roll out banking hubs, stamping out late payments and empowering communities to make the most of vacant properties. We are focused on ensuring that we provide the appropriate support to local authorities that are interested in using the high street rental auction power. Sadly, during 2024, up to one in seven shops on our high streets sat empty and boarded up, often for long periods. As hon. Members have highlighted, property that is left empty for long periods, as well as being an eyesore, can fall victim to disrepair or vandalism and be harder to bring back into use.

High street rental auctions are an important tool against persistent vacancy in our towns and cities, and in December we commenced legislation to enable their use. The new powers allow local authorities to require landlords to rent out persistently vacant commercial units, helping to bring businesses back to the high street and drive growth across the country. In introducing them, the Government are seeking to increase co-operation between landlords and local authorities, and to make town centre tenancies more accessible and affordable for tenants.

Through this initiative, we are putting power into the hands of local leaders. They are now empowered to auction off leases on premises that have been vacant for more than a year, and to grant local businesses and community groups the right to rent empty commercial lots at market prices. That gives power to those trying to shape and improve their high streets, and demands that landlords take sufficient steps to rent out empty properties.

To support delivery, we have made £1 million available to all local authorities. The fund has been open for applications since 15 January. In addition, a new burdens payment of up to £5,223 is available to help councils with initial implementation costs, such as those borne through legal advice and the auction process. The Department has made available guidance on how to use the powers, as well as a funding prospectus, to assist local authorities, and it will continue to engage with local authorities across England to promote the powers and spur implementation.

There are a number of early adopters, including councils in the areas of colleagues who have spoken today: Bassetlaw, Darlington and Mansfield are already working with us, and others have been placed in the second group—we will announce those shortly. We are working with the early adopters and a wider group to ensure that there is good learning, that good practice is spread and that there is good partnership working—not competition, but collaboration. That will ensure that local areas can learn from one another and that the provision is implemented appropriately.

Hon. Members have raised a number of issues, and a number of colleagues have sought meetings with officials, as well as with the lead Minister on this issue, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Nottingham North and Kimberley (Alex Norris), who will want to continue the dialogue. We will of course take away those requests and ensure that officials work closely with the relevant councils and Members of Parliament. I am conscious of the strong interest in this agenda and, if it is to work effectively in communities, we want to ensure that that partnership and close working relationship is in place.

I am extremely pleased that a number of councils have a strong interest in using the high street rental auction power, which is not the only action that the Government are taking to revive our high streets. We are introducing a new community right to buy to empower communities to address decline and protect valuable community spaces. The vision for empowered local decision making in the English devolution White Paper, to which some colleagues have referred, is also critical. If a high street or town centre is to flourish, local people, businesses and councils must work together to develop a unique offer for the high street that resonates with the local community.

Local authorities and mayors have the ability to bring people and organisations together to develop a vision for their areas. I welcome examples of local authorities taking the initiative to improve their high streets, and we have heard some extremely positive examples today. As was pointed out, in Bournemouth, Bobby’s is established in what was once a Debenhams store, and the Ivy has recently opened. Having made a number of visits to Bournemouth, I have certainly seen the great examples, but I recognise the challenges that my hon. Friend the Member for Bournemouth West mentioned, too.

We are determined to make sure that we provide the appropriate backing through the high street rental auction power, as well as the Government’s wider agenda to support local government and devolution. We have increased local government funding in real terms, and we are ensuring that local authorities have the appropriate support and capacity. The problems we have inherited over the last 14 years cannot be resolved in one go in one Budget, but we have begun our plan for change and for action.

In another area that my Department covers, homelessness, we have invested £1 billion, including additional funding, to tackle what is another dimension of the societal challenges that we face. We need to support local authorities and local areas to support those who are sleeping rough and facing housing challenges. More broadly, we continue to invest in regeneration. The long-term plan for towns will provide 75 places across the UK with up to £20 million for funding and support over the next decade, giving communities the space and resources to build their vision for renewal.

Hon. Members raised a number of points in relation to undesirable types of organisations. Local authorities have powers to prohibit uses of particular types of operations and businesses, and we very much look to them to use those powers appropriately. On department stores, while the point about complexity has been recognised, local authorities can use compulsory purchase orders to address the issue and redevelop former stores. We keep the guidance under review, but we are happy to continue the dialogue; it is very important to make sure that we have a continuous process of learning and improvement.

I am conscious that we are running of time. My officials and I can write to hon. Members on specific questions that I have not been able to respond to. I thank my hon. Friend the Member for Bournemouth West again for securing the debate, and I thank all hon. Members for participating in it and highlighting the wonderful examples in their constituencies, alongside the challenges. We look forward to working with hon. Members across the parties to help revitalise our town centres and ensure that they continue to make a strong positive contribution to our economy and to communities.