Can Labour’s five-point high street plan help struggling retailers?

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Labour has promised to revitalise the UK high street with a new five-point plan that includes reducing business costs and revamping empty shops. The pledge, which was announced by Keir Starmer and shadow chancellor Rachel Reeves, includes £700 million worth of support to help businesses reduce their energy bills as well as cutting business rates for small firms.

Labour’s leader said retailers were being held back by “13 years of Tory economic failure.” He said: “With our five-point plan, Labour will work in partnership with businesses and local communities to get our high streets thriving again.”

New analysis shows the UK has lost over 6,000 pubs, nearly 4,000 local shops and 9,000 bank branches from local high streets since the Conservatives came into power in 2010.  According to analysis from the Centre for Retail Research, a total of 17,145 shops on high streets and in other locations closed for good during 2022, up almost 50 per cent on the 11,449 shops that closed in 2021.

Industry reaction

The British Retail Consortium says the plan features some welcome elements but is missing key measures that would help transform the high streets. These include improving public transport and parking, the provision of ultrafast broadband in town centres and an approach which recognises and supports a wider mix of uses – like leisure, care, residential and coworking spaces – on future high streets. 

Chief executive Helen Dickinson OBE comments: “The successful transformation of high streets to places with a wider mix of uses requires strong local leadership, proactive councils and effective national policies. It is positive to see Labour focus on some of the steps needed to realise this vision through plans to bring empty shops back into use, tackle anti-social behaviour and support energy efficiency investment, which could help as retailers target net zero by 2040.”

She notes, however, that more could be done to aid a strong recovery – such as permanently freezing business rates for businesses of all sizes: “It is vital that solutions for thriving high streets are fully considered, don’t add complexity or cost to retailers and recognise the nature of modern retailing, whereby the majority of retailers sell both online and in stores,” she adds.

“Retail accounts for 5 per cent of the economy but pays more than one-fifth of business rates. The overall industry tax take is unsustainably high and contributes to shop closures, job losses and stifled investment. There must be a permanent freeze of business rates and a cut to the multiplier in the longer term: it’s crucial that any business rates reform reflects how modern retail works and lowers the burden for retailers of all sizes.”

Labour’s five-point plan

Cut small business rates: Labour would cut business rates for small businesses by raising the threshold for Small Business Rates Relief in 2023-24. The cut would be paid for by raising the Digital Services Tax paid by online giants like Amazon. Average saving assumes Labour’s policy applies to a pub, restaurant or café with median rateable value as recorded by the Valuation Office Agency. (https://www.gov.uk/government/statistics/non-domestic-rating-stock-of-properties-2022)  

Cut energy bills: Labour would allocate £700 million to support small businesses to cut their energy bills in the long term. The scheme would give vouchers to small firms to install energy saving measures such as insulation, heat pumps or a switch to electric vehicles. The scheme would be administered as a voucher scheme with small business able to claim for energy saving measures purchased from a list of approved suppliers. The scheme would be paid for by Labour’s proposed fixes to the windfall tax on oil and gas giants.  

Stamp out late payments: Labour would introduce tough new laws to tackle late payments. The legislation would require big businesses to report on their company’s payment practices in their annual reports. This measure will require audit committees to report on late payments, making boards more accountable and providing further clarity for smaller businesses. Large companies have a duty to report publicly on their payment policies, practices and performance. However, this reporting process is not integrated into the financial reporting process of these companies, and many companies continue to pay their suppliers late at the expense of smaller businesses. 

Revamp empty shops: Labour would give councils new powers to take over empty shops and reopen them without consent from the property’s owners. Empty Shop Orders would see councils work with owners to bring empty shops back into use after 12 months of vacancy. Councils would have the power to secure management rights, carry out works and put the property to use, with rent revenues being directed back to the owner. The premises would be offered to local small business for a discounted rent.   

Tackle anti-social behaviour: Labour would introduce new town centre police patrols and a mandatory antisocial behaviour police lead for every local neighbourhood as part of Labour’s Neighbourhood Police Guarantee with 13,000 neighbourhood police and PCSOs. We would also implement a statutory duty for local partners to cooperate to tackle antisocial behaviour, with mandatory antisocial behaviour officers in every local authority area. This will be paid for with Labour’s Neighbourhood Policing Guarantee through a Police Efficiency & Collaboration programme.