It was with dismay, but not surprise, I learnt yesterday that 40 per cent of unoccupied retail premises in Scotland have been empty for more than three years. Bricks-and-mortar retail faces a number of well-documented challenges. What is less clear is any cohesive strategy at municipal and government level to stem the decline.
Time and again, high rates bills are cited as a reason for closure by small and large businesses alike. The Booksellers Association report it as a key concern raised by booksellers – alongside rents and parking charges. The number of empty shops on the high street do not just hint at a problem around rate regulation, they shout it.
Even when landlords are prepared to offer heavily-reduced rents in order to fill premises, would-be business owners are being discouraged due to the unfair and disproportionate financial burdens of doing business on our high streets.
Business rates are a significant cost for most small retail businesses – the third largest after rent and staff salaries. On a rateable value of £25,000 (modest in central Edinburgh), a retailer will be liable for £11,550 in rates. The rate only rises – and takes no account of ability to pay, turnover or economic conditions.
When I opened my independent bookshop Looking Glass Books in mid-2012, I successfully appealed my initial rates valuation, an arduous ordeal that was expensive in time, energy and money. The council assessed our rateable value just above the level at which we would qualify for some rates relief under the Small Business Bonus Scheme.
The local council were represented by their legal team, a service very few small businesses can afford. If it hadn’t been for a local professional representing me for a nominal fee I’m certain my appeal would not have been successful. That my local council could make this process so adversarial and onerous for a new small business is staggering.
It is a mistake to underestimate the contribution small businesses can make to the communities they operate in. They not only bring nuance and character to our towns and cities, they are also key in creating jobs, wealth and healthy local economies. The growing momentum of “shop local” campaigns reflects a deepening understanding on the part of consumers of these benefits. It would be a great pity if that campaign stalls because the options are limited.
The retail landscape has changed drastically yet there has been no reform of the business rates system and rates continued to rise throughout the challenges posed by a drawn-out recession. If the Scottish government is sincerely committed to its “town-centre first principle”, it is surely time for some innovative and decisive action.
Gillian Robertson is owner of Looking Glass Books and Cafe in Quartermile.