Government must learn from collapse of BHS & Austin Reed
3 min read
Shadow Minister for Communities and Local Government Liz McInnes MP believes that the Government must learn from the failure of High Street chains like BHS and Austin Reed 'to save workers and businesses on our High Streets'
Last week came the sad news that BHS and Austin Reed are going to close all of their stores across the UK losing 12,000 jobs in the process.
While former BHS owner Sir Philip Green has rightly come under criticism for his actions while in charge of the firm and will face two House of Commons Select Committees, the government’s shortcomings are also starkly apparent.
The Conservatives failure to learn from previous mistakes and mishandlings with other retailers such as Comet are all too familiar.
Mary Portas, who conducted their flagship policy in 2011, has been critical of its importance and implementation saying, it will “take years” to regenerate the British high street because of lack of funding to local councils. She highlighted the key points that have not been addressed, “It’s such a big issue, involving real policy changes around rates, planning, parking. Central government is trying to put all the onus on local councils, but they have nothing in their pots.”
The powers needed by local authorities and local communities to shape their high streets and town have not been devolved or developed into a credible plan of action.
A key issue in this remit is business rates, with many retailers complaining that rates exceed their rental payments as property values have changed.
Businesses have appealed the rates bill on one in three commercial properties in the UK between 2010 and 2015, which only looks to continue in this parliamentary cycle. The British Property Federation says the number of appeals is “indicative of how business rates are crippling small businesses.” This has had a knock on effect to those larger retail shops on the high street who have moved to retail parks or online.
Productivity is the biggest economic catastrophe under the guidance of the Chancellor, George Osborne. The UK is 20% less productive than the rest of the G7 members and the OBR has revised forecasts down by 0.3% for GDP from the last budget, all of which is undoubtedly hampering the high street sector.
The lowest paid sectors, who employ a third of our workforce in the UK are approximately a third less productive than the economy as a whole – the gap across Europe is far smaller.
The UK has the lowest number of shops per head of population of any of its European neighbours. There are 4.5 shops per 1,000 people in the UK (one for every 222 residents), compared to 5.4 in France, 5.7 in Germany and 15 in Spain (one for every 67 residents).
If this week has seen the ‘unacceptable face of capitalism’, as even some Conservative MPs have described the fiasco over BHS, then it is time for the Government to learn lessons and implement some serious action to save workers and businesses on our High Streets.
Liz McInnes is the Shadow Minister for Communities and Local Government and the Labour MP for Heywood & Middleton
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