What future for our high streets?

I have not written a blog in some time, but I wanted to talk about a topic that has been on my mind for a while. There was much talk in Billericay recently about the closure of our high street branch of Argos and today it has been announced that Kasbah, a women’s clothing shop in the High Street, is also to close after fourteen years of trading. This follows in the footsteps of local stalwarts such as The Gift Box and Clarks (where my mother used to buy me my school shoes as a boy) and just recently I was informed by Halifax that they will be closing their Billericay branch. This inevitably leads locals to question the long-term viability of our high street (although Billericay continues to perform more strongly than most and remains for the most part vibrant and successful).

None of this is unique to Billericay. Wherever you go in the Borough – be it Basildon Town Centre, Wickford High Street or the long-suffering and now demolished Laindon Centre – or, indeed, beyond, to near neighbours like the seaside resort of Southend-on-Sea, historic market towns in the midlands or up north; the same diminished townscapes can be found, with the big stores and banks having closed and the spectre of boarded up shopfronts and a proliferation of charity shops, fast food outlets, ‘pound shops’ and bookies. These trends are consistent whether it is a small-town high street like Billericay or large city shopping destinations. We have seen similar things in Basildon Town Centre, with our big ‘anchor stores’, Marks & Spencer and Toys “R” Us, closing down and leaving huge unoccupied buildings, which no other retailer is likely to want to take on.

We all know the cause of this tectonic shift away from high street shopping. Of course, we do; we are part of the problem! While many of us do try to support our local shops and independent retailers, who among us has never been lured to an out-of-town shopping centre, like Pipps Hills, Mayflower Retail Park, Lakeside or even Bluewater, with their plentiful parking? Who can resist the sheer ease and convenience of Internet shopping? The latter has, we know, increased in popularity in Britain more than in most other countries.

Last year, I was Chairman of Basildon Council’s short-lived Economic Development and Growth Committee (EDG). We looked at the crisis facing high street retail in some detail. The committee was abolished by Labour after their win at the local elections last May and consideration of this issue has since passed to their new Town Centre Revival Committee. I do not sit on that committee but the questions we tackled on EDG have continued to play on my mind. Not just because I remain economic development spokesman for my party but not least because shops have continued to shut in Billericay High Street, which is in my Billericay East ward.

It became clear to us last year that there was no obvious way in which these trends could be reversed, even if we wanted to. We need to confront the harsh reality; that the high streets and town centres that many of us grew up with are simply never coming back. Retail is changing, for good or ill, and politicians who attempt to arrest these developments are like King Canute trying to hold back the tide. But this does not mean there is nothing to be done.

Billericay High Street has existed for many hundreds of years. In mediæval times, pilgrims on their way to Canterbury would stop off in Billericay for a little ‘refreshment’ (hence the traditional prevalence of ‘inns’ in around Billericay). We have not always been home to big national chains; they are a relatively recent innovation, only seen in our high street since the 1960s. Even the greengrocers, butchers and bakers that some of us may remember from yesteryear were in fact an advent of the interwar years. For much of the 19th-Century, most high streets were characterised by a variety of civic buildings, libraries, and museums mingled with housing, street markets, small workshops, dairies, breweries, churches and the like. Somehow we need to get back to something like this but appropriate for today and repurpose our high streets so that they meet the needs of the 21st-Century, rather than cling to a 20th-Century model that has outlived its utility.

Now, of course, the ‘Big State’ interventionists on the political left will be quick to blame the Council and blame the Government and look to state funding for a solution. They always believe the answer to everything is spending other people’s money. This has already been tried through initiatives like the £1.6bn ‘Stronger Towns Fund’ and the earlier £1bn ‘Future High Streets Fund’. I am not personally a huge fan of these sorts of projects, well-meaning though I am sure they are. Call me a cynic, but I think they exist largely to create employment opportunities for ‘consultants’, policy wonks, and middle-class graduates with naff degrees in things like ‘Inclusion’. They are invariably clunky, top-down initiatives, whose aims are vague, and whose funding is allocated using formula that are wishy-washy. As a Conservative, my instinct is usually to allow market forces to work. But the other major problem facing our high streets is that market forces have rarely been allowed to work properly for the past seventy years and have suffered from near-constant central government interference. During my four years serving on the Planning Committee, nowhere was this more evident than in our totally outdated planning system.

Planning in this country is largely derived from the Town and Country Planning Act (1947), passed by the post-war Labour Government of Clement Attlee. Despite some minor amendments over the decades, legislation has strictly regulated land use, with four main uses recognised in town planning: Class A is your shops and retail, including restaurants; offices and industrial units, they are Class B; the domestic residential houses and flats that we all live in are Class C; whilst Class D is the designation for our leisure and community facilities. Each classification comes with its own raft of befuddling subdivisions and movement between categories, as demand for town space changes, is not as smooth as one might logically assume. ‘Permitted development rights’ allow for some movement within a class. For example, if you wanted to switch from one type of shop selling one type of thing to another selling something else, this could be achieved with a minimum of bureaucratic pettifoggery. But, for reasons passing understanding, movement between different categories is both inconsistent and cumbersome. If, for instance, you owned a building operating as a fast food takeaway (a subset of Class A) and decided you wanted to convert it to Class C (residential), this is generally permissible but, if you ran a retail shop this would usually not be allowed and, if you wanted to convert to Class B for office space, that would be completely verboten. A bank could convert into a leisure centre but not flats or housing. There is no rhyme or reason to any of it. These strictures greatly constrain the fluidity and adaptability of our high streets and town centres. They are not insurmountable for a developer or entrepreneur and can be negotiable with the Local Planning Authority, but it is costly and time-consuming and can be stymied for a plethora of reasons.

For places like Billericay, which lacks brownfield sites and where our Green Belt land is under constant pressure to deliver land for development to help mitigate the country’s housing shortage, the idea of using surplus retail accommodation to deliver housing seems so eminently sensible that it ought to be a no-brainer. Yet, while there has been some relaxation of the planning laws to allow offices to be converted into flats, this is not without controversy and arouses a good deal of opposition, not least because of the well-founded suspicion that new housing will be delivered without the infrastructure necessary to support new developments. An ‘Infrastructure First’ approach – as Basildon Conservatives have always championed – is essential to ensure new developments are sustainable. Nonetheless, freeing up these sites is essential if we want to relieve pressure on our precious Green Belt, repurpose our high streets and town centres, and deliver much-needed new housing sustainably.

Then there is the endlessly vexed question of Business Rates, which many local people incorrectly believe is set by local councils, but which is in fact set by the Valuation Office Agency, an executive agency of HM Revenue and Customs. One aspect of the effect of Business Rates that goes under reported is the extend to which it is responsible for the spread of ‘charity shops’, which have enjoyed a 40 per cent propagation over the last decade. This is due to the system of business rate relief for charities. Three months after a premises becomes unoccupied, the landlord becomes liable for Business Rates unless they can pass the obligation on to a new tenant. Because charities get an 80 per cent reduction, it is clearly in the interests of landlords to allow charities to occupy the premises on a short lease for a peppercorn rent, or even for free. Obviously, this is great for the charity – many of whom champion some very good and worthy causes – but the fact remains that this deprives the Local Authority of their share of the Business Rates (revenue they need in order to fund local services) and, let’s not beat about the bush, a preponderance of charity shops, no matter how noble the cause, creates a fairly dismal image for our High Street.

Also – at the risk of sounding like I’m really knocking charity shops (I’m honestly not!) – they do, unfortunately, have a pernicious effect on other local businesses. Leaving aside the low rents and subsidised business rates, charity sales are also exempt from VAT. In addition to which, they get money off their energy bills, are exempt from the Climate Change Levy, and pay no Corporation Tax on their profits. These advantages, while mostly justified, have had the unintended consequence of giving the charity shop sector a near-dominance in certain areas of retail. Oxfam, for example, are the largest seller of second-hand books. Great news for Oxfam but not so great for struggling, commercial second-hand bookshops. I do not know of any such bookshops left in our borough. They were everywhere when I was at university. They also take business away from second-hand (‘retro’) clothes shops, house clearance and second-hand furniture businesses, bric-a-brac shops, craft stores, boutiques and pop-up shops, etc, who already face competition from the Internet, with sites like eBay, Gumtree or things like Freecycle, where many saleable products are simply given away for nothing by people who cannot be bothered with the rigamarole of selling unwanted items. Such shops would bring more variety and probably more long-term growth, if they were able to thrive.

The above system also disincentivises landlords from usefully repurposing their building or the land it occupies, because they can afford to sit on it and wait for a new long-term tenant that may never materialise.

As I said at the beginning of this article, there are no simple answers to the crisis in our benighted high streets and anyone who presents seemingly simple solutions is, at best, misguided and, at worst, disingenuous. There is no miracle cure and top-down state interventions are no panacea – if anything, they merely serve to further distort an already distorted use of commercial premises. The answer, if there is an answer, must lie in allowing market forces to operate properly instead of relying on outdated planning rules and the dysfunctional system of Business Rates. We, all of us, must vote with our feet; if we want high street shops then we must ‘use it or lose it’. If we do not, then we must set them free to become something else.