By Scott Simmonds, researcher
Businesses on our high streets have been under huge pressure during the coronavirus pandemic. Multiple lockdowns have severely damaged footfall, exacerbating the trend of consumers shopping online. The hollowing out of these centres of our communities affects everyone and has led to high streets becoming central to the government’s levelling up agenda.
The Build Back Better High Streets paper, launched during the Prime Minister's much anticipated Levelling Up speech this month, sets out the government's vision to revitalise high streets and town centres throughout the UK, backed by £10 billion of taxpayers’ money. And while the strategy does contain gimmicks such as a 'National High Streets Day', it also contains some welcome regulatory stimulus to help businesses by cutting red tape. The measures include abolishing takeaway restrictions and allowing pubs, restaurants, and cafes to put tables on the pavement - all plans proposed in our ‘Scores of red tape’ paper at the beginning of the crisis.
The pavement licence provision, which made it quicker and less expensive to get a temporary pavement licence, proved highly successful during the pandemic and has been made permanent. Alfresco seating provided a boon for businesses as warmer weather hit and helped reduce the spread of coronavirus through proper ventilation. So it’s little wonder the government is now considering how to build on this success to give high streets a helping hand.
Another measure which proved popular with businesses and customers alike during the pandemic was the sale of takeaway pints. This modification to the 2003 Licencing Act has been extended for another twelve months, allowing pubs to sell alcohol for consumption off-premises. Rather than one year extensions, if the government sees value in such legislation it should extend the provision further and make it permanent. If necessary, restrictions on units per person could help curb excess while giving struggling pubs more flexibility in their business models.
The policy paper also states the government is also planning to put legislation in place to ring-fence businesses’ rent debt, accrued from March 2020, for businesses who have been impacted by coronavirus business closures. This will allow landlords and tenants to come to an agreement on repayment payments of this accrued rent debt.
Changes to legislation such as these are good examples of reforms that do not come at a cost to the taxpayer and provide struggling businesses with the tools and flexibility to properly recover as they emerge from the pandemic. This is exactly the type of measures ministers should consider to help the economy bounce back and protect taxpayers from shouldering all of the cost of covid.
However, like seemingly any government announcement these days, innovative ideas like these have unfortunately been combined with needless fiscal giveaways. Some examples include:
- £80 million on a Community Renewal Fund to create a new ‘National Street Tree Sponsorship Scheme’ and the England Trees Action Plan.
- A £7.4 million Cultural Programme. A high street community-led arts and heritage programme where artists are commissioned to work with communities across England to co-produce artworks.
- A £2 million “graffiti war chest”. The government will publish new guidance on tackling graffiti. Councils awarded funding under this scheme will be encouraged to use social media to highlight the changes this new guidance is delivering to local areas.
- An undisclosed amount on installing charging points for licensed ice-cream vans in London Borough of Camden as part of DEFRA’s Air Quality Grant Programme.
- £2 billion over five years for ‘Gear Change’, a plan to encourage cycling and walking. The great majority of this funding will be channelled through local authorities.
Forever promising money like this brings problems and tradeoffs of its own. For example, while this last aim may seem laudable at first, the government has also committed over £220 million of investment to create temporary infrastructure to mitigate capacity constraints on public transport. If the government recognises that public transport is under pressure, perhaps £2 billion on niche cycling and walking projects could be better spent there. Or even not spent at all, to allow the taxes that make driving so expensive to be cut.
There are also questions as to why some of this money is needed. Like the graffiti war chest. With taxpayers seeing almost automatic council tax rises each year and given council tax in England has more than doubled in the last 20 years, residents surely expect graffiti removal as a bare minimum from their councils. Councils should better manage the budgets they currently have, rather than relying on central government top-ups like this.
It’s worth remembering that these proposals are on top of over £30 billion of spending already committed to by Boris. This includes £4.2 billion for a city regions sustainable transport fund, £4.8 billion already committed to the Levelling Up Fund designed to invest in high-value local infrastructure, and a doubling of public investment in research and development spending to £22 billion. Committing to such large amounts of spending at a time when government debt has reached more than £2.2 trillion, or around 99.7% of GDP, seems at best short sighted - if not completely unaffordable.
Some of the measures in the Build Back Better High Streets plan show that this government is capable of innovative regulatory ideas that are a net positive for the taxpayer. Like freeports, these policies can be the foundation for the PM’s aims of helping to develop provincial towns and cities. So this should be their focus, rather than more unnecessary and unaffordable spending promises.