The future of our favourite local businesses

The media keep banging on about MPs going off on their 10 week ‘holiday’. I can only think in my own case – if only! I will have two weeks and two days actual holiday – for those particularly interested in my private life one week sorting out my house, one week in France and two days at the Edinburgh Festival. That’s it.

As for the other near eight weeks? Well – Parliament being in recess gives MPs (at least, the conscientious ones) the chance to do the sorts of things that get squeezed out during the manic schedules when Parliament is sitting. Some of that is dong research and learning – having the chance to study topics in more depth than you get in the nano-second media and Parliament culture. But also it gives more time to engage with the public.

In my case, one of my main thrusts of activity this recess is to get round as many of the small shops, restaurants, pubs and businesses in my constituency as I can manage.

These establishments are the lifeblood of the local communities that depend on them. As a former businesswoman I know only too well how hard it is for businesses to keep their head above water. Contrary to a view I hear expressed from time to time about businesses coining it, most of the small businesses I know find it pretty tough to keep going against the ever-imposing burdens of bureaucracy, costs and competition from multiples. Yes – there are those that make a decent profit – and good luck to them, but many are just holding their heads above the water.

Business rates, rent reviews, employment law, red tape – and in some places poorly worked out parking schemes – all take their chunk out of business profits – and in my constituency (Hornsey & Wood Green) a recent slew of rent rises threatened the future of some of our favourite businesses.

No one says that landlords should not raise rents when the five-yearly or whatever reviews comes around, but just sometimes you have to say that they appear to really push it – often to the point of pushing out the local independent business who has been a good tenant for years. Such businesses cannot always afford the massive hikes put forward and they decide to give up as the rent hike takes virtually all the profit they have struggled to make in a whole year’s work at a stroke – and we lose our long-serving and much loved community shops.

You could take the view that it is a free market and if the landlord can find someone to pay more – then s/he is entitled. I don’t take that view. The market doesn’t work fully and effectively as many of the costs and benefits involved are not reflected in the market prices – for example if the loss of small local shops makes more people travel to big shopping centres, the congestion and pollution that can cause doesn’t get costed and included in the rent level negotiations for the small shops in the first place. Another example – a good range of shops can help regenerate an area, bringing all sorts of benefits in terms of reduced poverty, reduce crime and happier communities that at best only tangentially feature in the profit and loss accounts of the landlord.

Moreover, the little businesses cannot pay the key money to get into the market or the high rents that the multiples can afford. That sort of obstacle to small businesses competing with large firms is another market failure, and that’s why we need policies to address them.

Two in particular appeal to me – landlords should be more willing to let small and new businesses pay a smaller proportion of their rent in advance, until the business and the cash flow builds up. In addition, just as we are used to the idea that property developers should provide some affordable housing when making housing developments, why shouldn’t shopping developments have similar conditions – if you get to make a big new retail development, part of the quid pro quo could be that you have to provide some affordable retail spaces?

And the other key necessity – is for local authorities to please, please, please, properly consult with local businesses and residents before they next come up with parking plans that will affect trade!

And – that’s just one of my summer campaigns. So next time you read in the media that MPs are off on 10 weeks hols – you will know better!

(c) Lynne Featherstone, 2007