With the death of three (well two and a half) large high street chains in a week and no immediate policy level ideas in motion about how we stop the rot, I have been getting more and more confused and subsequently angry about why we’re in this predicament. Even St. Mary Portas doesn’t seem to be able to save our beloved high street (apparently). I know there’s a lot of good stuff happening out there (including Assemble & Join I hope you’ll agree!), but it does feel like a drop in the ocean. I think I’m angry because I’m confused and I’m confused for two reasons. One is I think I can see obvious ways we could do something better, and two is that I’m probably ill-informed / ignorant / naïve (delete as you see appropriate). So I thought I’d scribble some thoughts down mainly to help me reflect and digest:
Retail space is more valuable than civic space.
The idea of prime high street real estate being a place driven by the consumption of products is deep seated. Over a long time period the continuous cycle of increased consumption and provision of more and more space in which to consume has taken firm hold of the British psyche, high street and planning laws.
For an equally long time, all this shouting about buying stuff was a self-fulfilling prophecy, and in many ways it still is. People still buy a lot of stuff. But two things have changed since 2008. Firstly, we aren’t able to buy as much, or at least the rate of growth in purchasing has slowed. Secondly, the way in which we buy stuff is changing very fast, something I’ll come to in a minute. Taken in isolation both these points needn’t be a problem, but when viewed in context of wider economic policy they undoubtedly are…
We live in a world where everything can be solved through growth. If the economy is broken, we need to generate growth, and one thing we do to encourage that is cut interest rates to dissuade saving and encourage spending i.e. consumption of more stuff. This generates more tax revenue and taxable income for businesses.
There are many reasons that this idea of our saviour growth’ grates with me personally, but sticking to task, let’s get back to why (as I understand it) needing it affects the high street: Increased tax from sales and rates on the high street in theory goes back into the public purse through corporation tax, income tax and business rates right?
Only now more than ever we’re being hit by a triple whammy:
1) The Internet. Shopping online is ballooning and companies such as Amazon are able to legally circumnavigate their moral tax duties in the UK in a variety of ways. This means increased spending does not equate to increased corporation tax revenue. Tax collection systems and legislation is seemingly unable to cope with a globalised marketplace that is developing so fast it’s almost impossible to pin down.
2) High street businesses, big and small, are struggling in the face of lowering disposable income and increased competition from online retailers who have the double advantage of not paying premium rent and business rates and often paying nominal tax in the UK. This in turn means as the HMVs and Jessops this world go out of business leaving conspicuous shells on the high street that, being empty, generate no business rates.
3) For some reason, the current government have reduced the tax burden on the highest earners, meaning any increase in taxable income (a desirable by-product of increased growth/consumption) does not convert into an increase in tax revenue. The reason given for this is that a 50% tax band wasn’t generating any more revenue than a 45% would, so therefore what is the point? This is an impossible concept if government (and HMRC) are performing their duties fully, and a strangely defeatist attitude from a government telling us we need to fight for our lives and that we’re all in it together. Yes and before you scream at your monitor I know the theoretical reason given is that we will drive away the best bods in business, particularly in financial services if we don’t compete on tax, and I just don’t buy it, a) because I think it’s nonsense, London will always be an attractive place to be and b) because income tax revenues from financial services in the last ten years are less than the taxpayer cost of bailing out our failing financial institutions, so who cares if we lose a few, it actually makes economic sense in a way. However that’s a rant for another time.
So the problem (again as I understand it) now is that we’re seeing revenues decrease across the board, and the burgeoning areas of growth in the market (Amazon for example) are contributing proportionally less and less tax back into the system. It seems we’re chasing an economic dream that is becoming inexorably further out of reach.
So with reduced tax income, less people and businesses in on the high street and more space becoming available in centres of population, it’s easy to say we’re seeing the ‘death of the high street’. A traditional approach might see us leave it to ‘market forces’ to rectify themselves. Only market forces don’t legislate for human behaviour, at least not properly (IMO). They operate on a principle of siloes of prosperity; they don’t measure good will or wellbeing very well. They are also slow to adapt to change. Too slow, as we’re seeing with the financial services industry. Not only are they slow to change but reticent. Take M-Pesa for example. A wonderful innovation in the financial industry in Kenya that makes moving money form one person to another simply a matter of a text message. M-Pesa is now used by 80% of Kenyan adults, but it’s not managed to make an indent on any other country. Why? Because most financial institutions are scared. Crucially, they are also big and well organised enough (unlike in Kenya five years ago when M-Pesa kicked off) to snuff out competition. It would be possible to suggest the same mind-set is prevalent in many large high street chains (not to mention government in general). Aggressively overpowering small business, and buying up (and then sitting on) large swathes of retail space (yes you Mr Tesco) may have the big boys winning for now, but will it really last if there is nothing left but homogenous wastelands punctuated by chain stores? The internet sounds way more appealing than that; I can do my weekly shop in the bath.
The obvious way around this is a collective and conscious deviation from pure market-based policy to think about what people like, how we interact as groups, what we want from what we buy, how we buy it, and what we want from our public spaces. There is a very interesting film recently put out by Microsoft (& others) about how interaction design has shifted into a holistic and joined-up way of thinking based on human behaviour and interactions in recent years. The talking heads repeatedly discuss how exciting the future is as a result. It seems we need to do the same when considering public spaces, and in particular the high street.
But instead, we seem to be hovering in a state of denial; online retail giants such as Amazon seem to be held responsible for the death of high street shopping. People talk nostalgically about the days of Woolworths and in time they will about Blockbuster Video, but can you really be sad to see them disappear from your local town centre? Only when they’re not replaced by something more appropriate and relevant you can. This isn’t happening at the moment for reasons I’ll talk about in a bit, but in short all this needn’t be a problem. In fact, we can now buy everything from sofas to plane tickets online, and have them delivered to our door or phone. This means cheaper products for us, and the potential for high streets to lose some or even most of the clutter and ugliness these retail empires bring. So if high street retail is dead, what could there be in its stead?
Well in short and rather excitingly, lots. It seems painfully ironic to me that just as the competition for high street space is waning (i.e. shops are shutting and not being replaced), we’re also seeing the biggest contraction in civic spaces in living memory. Apparently we can’t afford to keep libraries because there isn’t the money available. Retail is the only viable option when filling town-centre space as it generates tax through revenue and rates – it ‘pays it’s way’. But what happens when the music stops, and there is no revenue generation because everything shuts? Well, two things could happen, and there is precedent for both.
1) Retail that offers an added value beyond simply the product sold reclaims the high street. People still like going to their local butchers (apparently), and traditionally any self-respecting village would have had a bakers, a forge, a carpenter etc. In the 21st Century what’s really exciting is is we now have the tools through emerging tech and digital manufacturing to compete with production-line quality but with the attraction of being bespoke to individual consumer needs. Over the last generation we have seen an ever-increasing movement towards passive consumption of products. This is in part because products have become more and more advanced thus we have the luxury of being lazier in this sense than ever before. The reality is though, as places such as Habitat have found, the mass production of many products results in the creation of a ‘one size fits all’ option, or in essence, the least worst version of something for everyone. For the moment there are still many things (cars, stereos, washing machines etc.) that make total sense to purchase in this way, but technology now allows us to challenge mass-production for an ever increasing range of consumables. So there is the possibility in my mind that sometime in the future we might see a return to thriving independent high streets serving a secondary layer of consumer products, and even potentially sitting in harmony with the big boys. Sugru recently worked with a fencing (sport not boundary divider) equipment manufacturuer to produce what they think is the world’s first deliberately unfinished product – a fencing lance without a grip on the handle. Instead purchasers can mould one to suit their needs using Sugru. This seems to me to be a great example of the value of large-scale retail / production, and emerging technology providing bespoke solutions, and this is where you local high street could again become so valuable. (You could even argue that Nike ID offers a similar experience, and you know what, good for them. They’re at least challenging the notion of passive consumption.
2) Civic initiatives are afforded the necessary breathing space financially to be able to operate on little more than good will and desire to address a need. The problem with this is civic spaces don’t usually generate income. However, if we’re not generating cash from rates on vacant properties anyway, why not open them up? This does happen now at a small scale, but is a long way from becoming standard policy. Additionally, importantly and depending on how tangential you’re willing to go, a celebratory approach to civic spaces could save a fortune. For example, an elderly person who has a regular meeting space near their home might find they build a support network around them in a way that at least partly compensates for the break-up of most family groups living in close proximity we’ve seen in the last few generations. This added resilience makes people less of a burden on expensive centralised services. Equally, a group of young people who have somewhere to go on a Friday evening may have their boredom sufficiently alleviated to not feel the need to get up to mischief, thus saving the myriad costs associated with antisocial behaviour or worse. This is not easy to track, and even harder to unequivocally prove, but also undoubtedly possible.
Examples of both civic and retail experiments such as these can be found in places such as Brixton Market and Deptford High Street where civic activity and small, differentiated enterprise have flourished in a space that was previously largely devoid of financial or social value. This is an exciting and tantalising time and space, and one that I hope will soon be populated with designers, farmers, bakers, hackers, 3D printers, coffee mornings, youth clubs and the rest. The question is do we really have to get to this level of desperate dystopia (for those of you that remember Brixton Market before it was renamed Brixton Village) before decision makers start to act, and equally, those of us complaining about it start to rethink the value of civic space, question passive consumption and explore the potential of technology in providing a more personal product than could ever be purchased through a behemoth such as Amazon. And can we finally just get over this growth thing once and for all.