History shows the way to save the high street

  • Election 24

Dr Edward Jones, Senior Lecturer in Economics, Bangor University 

In this piece, Dr Ed Jones explores the factors leading to the decline of the high street and what could be done to revive it, from changes in the tax system to community-led initiatives.

High streets exemplify the historical, cultural, and economic vibrance of British communities. Yet an increasing number of these are now characterised by modest footfalls, derelict shop floors, and boarded-up windows. The state of the high street is a complex issue influenced by a series of social, environmental, and cultural factors in local communities.

From the 1940s onwards, the high street became the most valuable area in any city or town in terms of business activity and land and property values. The business of shopping was key to these higher values, with prime sites being of extraordinary value compared to other types of property. Prestigious high streets were viewed by local authorities as a means to demonstrate the importance of their towns, to attract consumers and spending from the surrounding region, and to secure future prosperity.

A gradual decline began in the 1970s as local authorities began approving out-of-town developments that brought in additional tax revenues and enabled them to pedestrianize town centres. Driving to out-of-town shopping centres became fashionable as more people bought their own car. The exuberance of the high street was further diminished by the pandemic as the movement of shoppers became restricted and they became accustomed to the ease and efficiency of online shopping. Crisis and contraction in the retail sector poses a fundamental challenge to towns and cities all over the country since the prosperity and vitality of high streets has come to rely heavily upon the retail economy.

The ‘death of the high street’ has prompted a new wave of policy responses aimed at addressing and regenerating struggling areas, such as Future High Streets Fund, the Towns Fund, and the Community Ownership Fund. However, the total amount of financial support available is small in relation to the size of the problem.

The problems faced by the high street are usually blamed on the rise of internet shopping, but in reality, they reflect more serious weaknesses in the shopping-centred model which has guided their development since the 1940s. Current debates about their decline raise fundamental questions about the high street: what is it actually for, what makes it successful, and what sort of social and economic functions should it perform.

Apply an old idea

The current system of local taxation in the UK rests upon property values (‘business rates’). This approach to taxation means large and small retailers must pay sums of money in local taxation which are disproportionate to their earnings. This, in turn, has a significant effect on the financial resilience of the high street. There are also significant imbalances in the way the burden of local taxation is distributed: residential and industrial property is heavily protected, while retail property bears by far the heaviest load.

Business rates is a tired, inefficient, and outdated tax, and must be reformed. A new system should give local councils power to set an appropriate tax that relates to the productivity of the area and better reflect a business’ annual profits (or losses). A land value tax would help achieve this by taxing the owners of the land on the high street. This would encourage landowners to ensure their land is the most productive it can be. This is not a revolutionary idea and has a long history within economic thought and political debate, and was popularised in the 1870s by Henry George who said that “everybody works but the vacant lot”.

Talk with the people

But even a change in the tax system won’t be enough to revive the British high street. Other changes are needed, such as greater use of technology to create intelligent (or smart) high streets. Technologies can be used to improve the quality of life of occupants and visitors, improve the efficiency of public services and infrastructures, and promote the environment and sustainability. Advanced technologies could be integrated into all activities, from energy supply to traffic management, waste to water resource management, to public safety. This would make it possible to improve the quality of services, reduce costs and increase the overall efficiency of the area, resulting in resilient high streets that are able to meet the challenges of the future. Through the use of online platforms and mobile apps, people could provide real-time feedback on services and even participate in decision-making that influences the area.

Communities may already have the solutions

To make a real change to our high streets we need to ask new questions about the social purpose and economic functions of such areas. There is a growing awareness of the need to develop high streets for the local community and ensure accessibility regardless of income, age, ability, or social background. Empowering local authorities to compulsorily purchase sites at below market value would address the problem of over-priced and under-used properties on the high street, and then allow these to be used by the community to provide a social benefit. Support for community-led initiatives, assisted by properties provided by local authorities, have the capacity to shift the power dynamics from a top-down approach to solutions for the high street to a model where the community decides what’s best for it. There have been some modest moves in this direction, including the opening up of vacant property to community groups and the promotion of various forms of temporary, often low-value commercial activity in central areas.

Ditch the shopping-centre model

The decline of the high street has prompted a renewed appreciation of the important social functions which these areas perform. There is increased talk about high streets as important sites for social interaction, civic activity as well as economic activity. This is a welcome indication of a more serious rethinking of what a such areas are really for beyond the commercial domain of shopping. High streets need to sustain a mix of social and economic functions, including residential properties, community-led initiatives, social activities, small-scale enterprises, in addition to commercial retail. In many respects, this vision for the high street harks back to the era before the shopping-centred model was installed so broadly in the second half of the twentieth century.

About the author

Ed Jones is a Financial Economist with professional experience in the private and public sector at senior level. He has experience in advanced analytics, financial and economic modelling, stakeholder’s engagement, technical research, and business strategy development.

Ed has a PhD (Economics) from the Centre for Banking and Financial Studies, University of Wales, Bangor, where he also holds a BA (Mathematics and Economics) degree and a Masters (Banking and Finance) degree.


Photo credit: Gary Butterfield, Unsplash