The government needs to adapt our high streets. Photo: Getty
Show Hide image

How relieving a million small businesses of business rates would help the high street

The high street is crying out for serious policy: let’s take a million small businesses out of paying business rates.

When David Cameron and Mary Portas strolled through Camden back in 2011 to launch a review into the future of the high street there was a sense that big ideas were beginning to take shape. Ministers were pushing the plight of our high streets up the agenda and the Government, it appeared, was ready to take serious action to support a vital British institution.

Fast forward three years and high hopes of a policy breakthrough simply haven’t materialised. Instead we’ve seen taxpayers’ money frittered away on frivolous items like Peppa Pig costumes and gorilla statues under the government’s failed Portas Pilots. We’ve seen the biggest increase in business rates in 20 years, reality TV high street makeovers that unravel as soon as the cameras leave and community institutions like the Post Office lose millions and see their existence threatened after ministers cancelled an agreed DVLA contract.

Add to this the confusing messages on planning, ministers arguing that an explosion of betting shops, fast-food outlets and payday lenders is a sign of a thriving high street and the baffling decision to cancel a much-needed business rates revaluation and the full scale of government failure becomes clear.

Today, consumer confidence and high street footfall is down, retail insolvencies have just hit a five-year high and there remain over 40,000 empty shops in the UK.

It’s time ministers stopped fiddling in the margins and faced up to the fact that high street policy under this government has been laughably lightweight. Serious policy is desperately needed and that’s why I’m calling on the government to remove over one million small businesses from paying business rates.

There are almost 1.2m small businesses occupying properties with a rateable value of less than £12,000 and they account for approximately six per cent of the total business rates tax take. With the right political will government can remove these altogether from paying business rates with the cost to the taxpayer outweighed by the boost to enterprise and massive efficiency savings to be made.

This could not only be the difference between high streets having a fighting chance of survival but ultimately kick-start a small business renaissance.

I’ve lost count of times I’ve heard traders explain that business rates are the reason they’ve had to shut shop. I’ve met traders whose business rates bill is three times higher than their rent and listened to entrepreneurs explain that business rates are the sole reason they don’t want to open a high street venture. This is a tax that bears no relation to a business’ ability to pay, stifles investment and prevents good ideas taking root on the high street.

So let’s give small businesses the best possible chance of becoming the thriving model of a sustainable high street recovery. Exempting them from paying business rates can be done in a way that’s affordable to the Treasury by having a bonfire of bureaucracy at the outdated quango that sets business rates.

If the government were to streamline the Valuation Office Agency, get rid of the monster of administration that’s been created and introduce fairer annual revaluations like they have in Holland then they’d make enormous savings in transitional relief, reduced appeals and administration costs. In this parliament alone, the government is set to spend over £1bn on transitional relief. Council administration costs would also be slashed, as they’d no longer have to collect rates from small businesses and in many cases obtain summonses for non-payment.

So making much-needed reform to a lumbering, unresponsive quango and bringing in annual revaluations can help pay for a tax cut for businesses that are effectively the lifeblood of communities and which have suffered the worst from the economic downturn.

There are plenty more measures the government needs to take to help our high streets adapt to the needs of the 21st century. But after all the hype and headlines ministers have created around the high street there is not one bold policy of any significance to show for it.

Freeing more than a million businesses from rates would be such a policy.

David Cameron has promised to look at business rates in 2017 but that’s just too late and thousands more businesses will have gone bust by then. We should be under no illusion that our high streets will ever return to the model of years gone by, because they won’t. But if we’re going to shift to a community-led model then small innovative ventures will be vital and that’s why ministers need to change their mindset from “big is best” to “small is beautiful”. 

But above all ministers need to properly break free from the policy paralysis that typifies their approach to the high street and discover some political courage to introduce the bold policies that are needed.

Bill Grimsey is Labour's high streets adviser and former chief executive of Wickes and Iceland

Show Hide image

The decline of the north's sporting powerhouse

Yorkshire historically acted as a counterweight to the dominance of southern elites, in sport as in politics and culture. Now, things are different.

On a drive between Sheffield and Barnsley, I spotted a striking painting of the Kes poster. Billy Casper’s two-fingered salute covered the wall of a once-popular pub that is now boarded up.

It is almost 50 years since the late Barry Hines wrote A Kestrel for a Knave, the novel that inspired Ken Loach’s 1969 film, and it seems that the defiant, us-against-the-world, stick-it-to-the-man Yorkshireness he commemorated still resonates here. Almost two-thirds of the people of south Yorkshire voted to leave the EU, flicking two fingers up at what they saw as a London-based establishment, detached from life beyond the capital.

But whatever happened to Billy the unlikely lad, and the myriad other northern characters who were once the stars of stage and screen? Like the pitheads that dominated Casper’s tightly knit neighbourhood, they have disappeared from the landscape. The rot set in during the 1980s, when industries were destroyed and communities collapsed, a point eloquently made in Melvyn Bragg’s excellent radio series The Matter of the North.

Yorkshire historically acted as a counterweight to the dominance of southern elites, in sport as in politics and culture. Yet today, we rarely get to hear the voices of Barnsley, Sheffield, Doncaster and Rotherham. And the Yorkshire sporting powerhouse is no more – at least, not as we once knew it.

This should be a matter of national concern. The White Rose county is, after all, the home of the world’s oldest registered football club – Sheffield FC, formed in 1857 – and the first English team to win three successive League titles, Huddersfield Town, in the mid-1920s. Hull City are now Yorkshire’s lone representative in the Premier League.

Howard Wilkinson, the manager of Leeds United when they were crowned champions in 1992, the season before the Premier League was founded, lamented the passing of a less money-obsessed era. “My dad worked at Orgreave,” he said, “the scene of Mrs Thatcher’s greatest hour, bless her. You paid for putting an axe through what is a very strong culture of community and joint responsibility.”

The best-known scene in Loach’s film shows a football match in which Mr Sugden, the PE teacher, played by Brian Glover, comically assumes the role of Bobby Charlton. It was played out on the muddy school fields of Barnsley’s run-down Athersley estate. On a visit to his alma mater a few years ago, David Bradley, who played the scrawny 15-year-old Billy, showed me the goalposts that he had swung from as a reluctant goalkeeper. “You can still see the dint in the crossbar,” he said. When I spoke to him recently, Bradley enthused about his lifelong support for Barnsley FC. “But I’ve not been to the ground over the last season and a half,” he said. “I can’t afford it.”

Bradley is not alone. Many long-standing fans have been priced out. Barnsley is only a Championship side, but for their home encounter with Newcastle last October, their fans had to pay £30 for a ticket.

The English game is rooted in the northern, working-class communities that have borne the brunt of austerity over the past six years. The top leagues – like the EU – are perceived to be out of touch and skewed in favour of the moneyed elites.

Bradley, an ardent Remainer, despaired after the Brexit vote. “They did not know what they were doing. But I can understand why. There’s still a lot of neglect, a lot of deprivation in parts of Barnsley. They feel left behind because they have been left behind.”

It is true that there has been a feel-good factor in Yorkshire following the Rio Olympics; if the county were a country, it would have finished 17th in the international medals table. Yet while millions have been invested in “podium-level athletes”, in the team games that are most relevant to the lives of most Yorkshire folk – football, cricket and rugby league – there is a clear division between sport’s elites and its grass roots. While lucrative TV deals have enriched ruling bodies and top clubs, there has been a large decrease in the number of adults playing any sport in the four years since London staged the Games.

According to figures from Sport England, there are now 67,000 fewer people in Yorkshire involved in sport than there were in 2012. In Doncaster, to take a typical post-industrial White Rose town, there has been a 13 per cent drop in participation – compared with a 0.4 per cent decline nationally.

Attendances at rugby league, the region’s “national sport”, are falling. But cricket, in theory, is thriving, with Yorkshire winning the County Championship in 2014 and 2015. Yet Joe Root, the batsman and poster boy for this renaissance, plays far more games for his country than for his county and was rested from Yorkshire’s 2016 title decider against Middlesex.

“Root’s almost not a Yorkshire player nowadays,” said Stuart Rayner, whose book The War of the White Roses chronicles the club’s fortunes between 1968 and 1986. As a fan back then, I frequently watched Geoffrey Boycott and other local stars at Headingley. My favourite was the England bowler Chris Old, a gritty, defiant, unsung anti-hero in the Billy Casper mould.

When Old made his debut, 13 of the 17-strong Yorkshire squad were registered as working-class professionals. Half a century later, three of the five Yorkshiremen selec­ted for the last Ashes series – Root, Jonny Bairstow and Gary Ballance – were privately educated. “The game of cricket now is played in public schools,” Old told me. “Top players are getting huge amounts of money, but the grass-roots game doesn’t seem to have benefited in any way.”

“In ten years’ time you won’t get a Joe Root,” Rayner said. “If you haven’t seen these top Yorkshire cricketers playing in your backyard and you haven’t got Sky, it will be difficult to get the whole cricket bug. So where is the next generation of Roots going to come from?” Or the next generation of Jessica Ennis-Hills? Three years ago, the Sheffield stadium where she trained and first discovered athletics was closed after cuts to local services.

This article first appeared in the 19 January 2017 issue of the New Statesman, The Trump era