Developers and their Tory allies are killing the high street

Simon Jenkins

High streets matter. We don’t want them to follow churches, becoming relics of a mostly dying sense of community. They should be the living hubs of villages and towns and not vanish beneath an anonymous swathe of suburban housing.
The news is that 6,000 high-street shops have closed in the past five years. The big stores are already going. Wilko has followed Debenhams and Arcadia into collapse. One in seven high-street premises now lie vacant, while vape stores, nail bars and charity shops invade the rest. Dame Sharon White, the boss of John Lewis Partnership, which has already closed 16 of its own outlets, pleaded this week for a royal commission to rescue what is left. Something must be done, she said, “to stop the hearts being ripped out of our communities”. The easy answer is that this is tough, but the market is talking. Online shopping now comprises close to a third of all retail sales and this proportion is soaring. People are ever less inclined to visit a high street when anything they want can come to their door in a van – and as often in a day as they like. Or they can drive to a shopping mall and park for nothing. In the new age of hybrid working, the lunch break, the office get-together, the after-work drink are all in the past. The village street, human congregation, the chance encounter with friends are equally forgotten.
At this point the picture gets muddy. Online shopping has risen faster in the UK than anywhere else in Europe. The reason for this appears to be that the idea of actually protecting a community’s local services and institutions has been allowed to lapse, while it is second nature in France, Germany or Italy where independent bakers, butchers and greengrocers are a mainstay of every town. The consequences are crippling for the UK. In the past 25 years the government has steadily shifted the burden of local taxes from houses to businesses. A householder can now pay £1,000 to £2,000 a year in council tax while the next-door shop can pay 10 times that. The shop is also liable to regular revaluations that can result in business rates leaping by 20 – to 30% at a time and are wholly unrelated to turnover or profit. Two years ago, a British Retail Consortium survey showed 85% of high-street shops regarded business rates as the “critical issue” in their survival. Boris Johnson promised to reform them when he was prime minister. Nothing happened. The reason was simple: shops don’t vote.
More serious has been the advent of policies to close down high-street businesses in favour of new houses being built. This has followed a long battle for the Conservative party’s ear between Tory rural constituencies and Tory donors from the building industry. In 2013, the Cameron government conceded to the builders that offices and other commercial buildings could be turned into homes without needing permission. At the same time, Whitehall enforced housebuilding targets on local councils. Rishi Sunak has done nothing to honour Johnson’s pledge of business rates reform. He has also continued to discourage conversion – not least of empty floors above shops – by retaining 20% VAT on restoration and conversion, yet allowing new builds to be VAT-free. Then came the big one. As a massive sop to the Home Builders Federation, the then housing minister, Robert Jenrick, decided in 2021 to deregulate permitted development rights (PDRs) on high-street premises, the so-called E class of uses. He was answering pressure from developers who wanted to be allowed to buy and demolish shops, post offices, cafes and pubs, and replace them with private homes without planning permission. This was coupled with blatant pressure in which the big building companies – which in the past have accounted for around a fifth of all donations to the Tory party – threatened to withdraw their considerable donations to the Tory cause, one having recently given £1m.
This year Jenrick’s successor, Michael Gove, made a further concession to the builders’ cause. To ease the pain of an end to rural building targets, he introduced an amendment to a levelling up bill that would absolve housebuilders from polluting local watercourses. Even Tory peers would not stand for that, and it was given short shrift in the House of Lords on Wednesday. As things stand, all a developer needs to do is buy any retail or other commercial site and leave it unused for three months. They can then knock it down and build a block of flats or houses. A Berkshire village pub of my acquaintance was struggling to recover from lockdown. It had been a pub since time immemorial and treasured as such by local people. Following Jenrick’s measures, the owner had only to look at his rates bill and his bank balance and sell to a local builder for £1.3m on the spot. This new wild west appears disastrous. Protests from the British Independent Retailers, the National Trust, the Booksellers Association, the RIBA and even the British Property Federation have become a chorus. The game is on to grab villages and towns for new housing construction, utterly without concern for a high street’s popularity or civic role – and with the government’s blessing.
Coming out of lockdown – when the government at least stalled business rates – the high street was certainly likely to see a retail shakedown. The issue should surely have been how policy might ease such change without damaging communal vitality. In the event, it was how to appease a lucrative lobby. In France, with twice the number of independent high-street retailers as Britain, howls greeted a proposal 10 years ago even to allow chains to buy up local cafes. Mayors continue to oversee changes of ownership and use, much to the benefit of their citizens. Even in Paris, the mayor, Anne Hidalgo, is seeking to ensure every citizen is within 15 minutes’ walk of local services such as shops. It is the very essence of localism. In Britain, all these matters are forbidden to local government and retained by the centre. Some efforts are being made to keep shops in business, such as a Whitehall proposal for the enforced auctioning of leases for pop-up shops. Lively places such as Derby and Altrincham have galvanised their old market halls and hope to turn their high streets into social destinations. There are also signs that hospitality is recovering from Covid, notably services less vulnerable to online supply, such as gyms, restaurants, health and wellbeing. But such recovery depends on people having the leadership and imagination – and the power – to see such projects through. Only locals truly care about communities. Ministers care about statistics. Sharon White is correct. This cries out for a commission.