Pressure on the High Street?

It was not just the fact that HMV announced that it was going into administration that caused me to reflect about the state of British high streets. A few weeks ago, I also took a stroll through Broomhill, in Sheffield, where a countless number of shops had closed and a local coffeehouse was being turned into a Costa. Additionally, I found out my great granddad’s pub had closed down. The stark message appears to be that the high street is slowly dying. What is to blame for this morbid future of town centres?

The changes on our high streets have been accelerated by the economic downturn from 2007 onwards, and probably worsened by the economic policies of George Osborne. However, the long-term cause lies in a much broader shift in consumer culture that has moved from the high street towards larger, out-of-town shopping centres and towards the Internet. Earlier this month, in addition to HMV, we have seen Jessops and Blockbuster go into administration. This follows a number of other businesses including: Woolworth’s, JJB Sports, Clinton Cards, Optical Express and so on. This is a very small and selective list, but it shows that there are a wide variety of shops that are closing down. More generally, the number of town centre stores fell by almost 15,000 between 2000 and 2009 with an estimated further 10,000 losses over the past couple of years. [1] Without doubt, traditional high streets are in decline, which has seen the emergence of ‘ghost towns’ and ‘clone towns’ across Britain. [2] It means that, first, our high streets are dying and, second, those that remain all look the same, with a generic number of national outlets.

There are those that have little qualms about the decline of shopping in town centres; if anything, ‘clone towns’ have made shopping more convenient (you know what you’re getting from your Starbucks and your H&M wherever you are across the country), and better still, online shopping means you don’t even need to leave the house (hush about the tax avoidance from the likes of Amazon.co.uk though). Ultimately, however, high streets do matter. This is not just about nostalgia for an age of butchers, bakers and candlestick makers; this is about a vibrant local economy (although I do love a good cake). The problem is that national retailers suck out economic capital in town centres and take it straight back to their headquarters. Rarely do profits return to the local economy. The growth of tax avoiding retailers has further reduced the tax base for investment, which is further exacerbating the problem. Whether town and city centres are labelled ghost towns or clone towns, it damages the local economy. Communities become dependent on state-led investment, something which would be less likely in a locally independent economy where small- and medium-sized businesses work interdependently. [3]

A more fundamental point, however, is that British high streets are about public space. The space of the town centre is becoming marginalised and soulless – which may sound rather fuzzy, but is based on the idea of social capital. The problem facing our high streets has surpassed retail. It is also about our ability as citizens to contribute to the public spaces we occupy, which suggests that we need to reclaim town and city space. In other words, strong town and city centres matter because they contribute towards a dynamic economy, and they also help to strengthen and maintain a sense of social capital. We must recognise that the role of high streets has changed from a pre-dominant retail role towards one that should emphasise a social one. It entrenches a sense of belonging and localism, which is preached by both the main parties in their own ways [4]. As Jan Gehl points out:

Wanting to go into town is different from wanting or needing to shop. It is about an experience. It is about sociability and relaxation, creativity and being part of something you cannot get at home or work. [5]

To echo the points made by Mary Portas’ independent review from 2011, high streets should be bustling with people, services and jobs. They should be vibrant places that people choose to visit. They should be destinations. This is not about nostalgia – it is about social capital and sustainable economic growth.

The question, therefore, revolves around how we can improve the confidence and strength of high streets. ‘Localism’ has become a key word for this to happen. Local councils have always been marginalised in the British political system, for a range of reasons that go beyond this article’s remit. The broad point, however, is that local politics must matter to people; and the best way to do this is to empower local councils. [6] Local councils need to be at the heart of local decision-making, which includes the local economy – something which has been hoarded by central government for too long. Councils need to think more creatively about parking spaces, improving public transport and improving consultation with local businesses. The success of Business Improvement Districts is one important development (mechanisms where local businesses contribute to joint business plans), which demonstrates that working together is an important dynamic of the future. [7]

In terms of economic policies, a number of choices are available:

  • First, the model of business rates is out-dated and out of proportion. For example, the business rates for an ASOS distribution centre in Barnsley is around £40 per square metre; for a unit in a Rochdale shopping centre, this is £1,080 per square metre. This has led one commentator to question if business rates are taxing the high street out of existence. Business rates need to change.
  • Second, big businesses need to be regulated so that smaller, independent shops can grow. A diverse high street means that large supermarkets and hypermarkets must be limited in space and size, and regulated in terms of products. Changes in planning law should reduce the power of the likes of Tesco, Asda-Walmart, Morrison’s and so on. [8]
  • Third, the introduction of a ‘Small Business Saturday’. This has been introduced in the United States, and proven to be highly successful. Figures suggest that more than £3.4 billion were spent that day in 2012. This idea was sponsored by social media and supported by celebrities. It suggests that there is a lot of potential for this to work in the UK.

These are just three ideas, and many more should be looked at – reducing red tape, creating local enterprise zones, and setting up a Post Office Bank. However, none of these measures will be enough. The national economic policies of the current Coalition government are preventing the growth that is desperately needed. Austerity is simply not working. We are now on the brink of a triple-dip recession – an unprecedented and bleak outlook for the future that must be tackled. All of this makes the emphasis on local, sustainable growth even more important.

mg

Notes

[1] Department for Business, Innovation and Skills/GenEcon (2011) Understanding High Street Performance, Leeds: GenEcon, paragraph 21 (available here).

[2] See New Economics Foundation (2005) Ghost Town Britain, London: NEF (available here), and New Economics Foundation (2005) Clone Town Britain, London: NEF (available here).

[3] See, for instance, New Economics Foundation (2002) The Money Trail: Measuring the impact on your local economy using LM3, London: NEF (available here).

[4] The Conservatives, for example, have focused much on the ideas of the Big Society: see among others: D. Cameron (2011) Speech on the Big Society, London (available here). See also: Conservative Party (2009) Control Shift: Returning power to local communities, London: Conservative Party. The Labour Party has focused on One Nation as its main alternative starting point for localism. See J. Cruddas (ed.) (2013) One Nation Labour: Debating the future, London: LabourList (available here).

[5] J. Pehl, quoted in M. Portas (2011) The Portas Review, London: BIS, p.15 (available here).

[6] See J. Wilson (2012) Letting Go: How Labour can learn to stop worrying and trust the people, London: Fabian Society.

[7] Portas, p.21.

[8] New Economics Foundation (2011) Ten Steps to Save the Cities, London: NEF (available here).

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