The latest Local Data Company report on empty shops makes grim reading for the north of England. Of the top ten worst town centres for empty shops, seven of them are in the North East or North West. Vacancy rates in the North West and North East continue to rise and they have a combined average of nearly one in five shops standing empty. But if dark clouds hang over a northern high street recovery then a few hundred miles south retailers are enjoying the sunlit uplands of recovery.
Just look at the top ten performing town centres with the least amount of empty shops. Six of them are in Greater London. London is the best performing region by a country mile and the North West has a vacancy rate that’s more than double the capital.
What these figures show is that the economic recovery is well under way – in London. But large parts of the north are still battling against recessionary headwinds and competing for customers who have less money in their pockets. Row upon row of empty shops is damaging confidence and there are many high streets that may never recover.
For a region with a proud history of discovering retailing giants, the sight of boarded up shops and empty units is painfully at odds with its illustrious past. Let’s not forget Woolworths first opened up in Liverpool and Marks and Spencer was launched on Kirkgate market in Leeds. Enterprise is written into the North’s DNA.
But it’s no accident that investment and entrepreneurial spirit is failing to breathe new life into thousands of empty shops. There is a good reason why far too many shops stand empty across the north. It’s down to an unforgiving and unfair business rates policy.
Right now there are businesses from Stockport to Blaydon and Barnsley to Rochdale paying over the odds in taxes because their business rates are set near the height of the last property boom in 2008. In Rochdale, for example, there is a fish and chip shop paying £6,000 in rent and £18,722 in business rates.
Last year this Government cynically cancelled a business rates revaluation knowing that it would have seen rates come down in many parts of the north, as they were readjusted to reflect current property values. Rates across London, on the other hand, would largely have gone up. It’s been calculated that stores on Bond Street have saved £66million in rates as a result of the revaluation being postponed. As a consequence we have a completely unfair business rates policy where small independent traders in the north of England subsidise luxury brands like Burberry, Emporio Armani and Dolce & Gabbana.
Is it any wonder that retailers think twice about investing in northern high streets when they see the unfair business rates burden?
The chief executive of fashion retailer Superdry recently said that business rates have made it unrealistic to open stores in certain parts of the country. Where a town has struggled, the rents have come down but the rates keep going up, he argues. He’s right.
And he’s not the only one. There are many more like him with similar concerns yet these voices continue to fall on deaf ears. Ministers know what the problem is, but they haven’t got the courage to grasp the nettle. Only last month David Cameron said he understood the anger and resentment created by business rates – but he wouldn’t consider reforming the system until 2017.
Not withstanding the fact that he won’t be in office by then, for many people this will be too late. Northern high streets need help now. The sight of boarded up empty shops is no good for local economies and communities. It acts as a roadblock to recovery and until we have a fairer tax system we won’t see a proper northern high street recovery.
It’s not just business rates, though, putting pressure on high streets. The growth of out of town shopping and continued shift online means the traditional high street model will have to radically change to give some towns a fighting chance of survival.
High streets of the future will have to serve the community more, with housing, education, leisure, culture and health taking centre stage. By re-thinking the purpose of the high street, today’s ghost towns can become vibrant community hubs once more and generate the footfall needed to help existing shops prosper. The north can lead this revolution helping build a post retail landscape that breathes new life into struggling high streets. But it will need Government help and a fairer tax system to make the transition. And if we continue to carry on with the same poor policy, the gap will get wider, Britain will be a poorer place and some northern towns will slip into irreversible decline.
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