MPs call for action to prevent high streets becoming ghost towns

Urgent action is required to prevent thriving high streets becoming ghost towns, according to a leading group of MPs.

A report published today by the housing, communities and local government parliamentary select committee warns the outlook for high streets and town centres will become ‘increasingly bleak’ unless the government reforms the business rates and planning systems.

In particular, it calls for changes to the business rates systems for high street and online retailers.

According to the committee, Amazon’s business rates last year amounted to around 0.7% of their UK turnover, while high street retailers pay between 1.5% and 6.5%.

In order to create a ‘level playing field’, it recommends the introduction of an online sales tax and a reduction in business rates for high street retailers.

It also suggests that any high street retailer who invests in improving its property be given a 12-month holiday from paying business rates.

The report also claims the £675m Future High Streets Fund does ‘not meet the scale of the challenge’ of helping struggling town centres.

Instead, it argues the government should increase the next round of funding, potentially using revenue generated by reform of business rates.

It also argues that the planning system should be reformed and claims that compulsory purchase orders (CPOs) are too cumbersome, expensive and time-consuming to effect change in a rapidly changing world.

An analysis by Labour of figures from the Office for National Statistics (ONS) in September revealed that 100,000 retail jobs have been lost in stores across Britain since 2015, as real wages have stagnated and Brexit negotiations continue to hit consumer and business confidence.

‘It is likely that the heyday of the high street primarily as a retail hub is at an end,’ said committee chair, Clive Betts.

‘However, this need not be its death knell. Local authorities must get to grips with the fact that their town centres need to change; they need to innovate, setting out a long-term strategy for renewal, reconfiguring the town centre and finding new ways of using buildings and encouraging new independent retailers.

‘Dated planning policy must be reformed to reflect the needs of modern high streets and town centres,’ added Mr Betts.

‘Business rates must be made fair. They are currently stacking the odds against businesses with a high street presence and this must end. Tax reforms are needed to level the playing field between online and high street retailers, and we urge the Government to investigate all the options in this area, including an online sales tax.’