Housing, Communities and Local Government Committee
Tuesday 13th October 2026
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10:01
Speaker 1
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Speaker 1
So good morning everybody. My name is Aparna. This is my first time as chair for the Housing and Local Government Select Committee. I want to welcome all the witnesses, including the virtual witness today. Today is our first oral oral evidence session of our inquiry into revitalising high streets. And we have two panels of witnesses appearing before us today. You're our first. Can I ask the witnesses to introduce themselves first? Briefly.
So I'm going to go to Sue first.
So I'm going to go to Sue first.
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10:03
Speaker 3
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Speaker 3
And yeah. Thank you. So yeah, we've at the centre for Social Justice have just conducted a massive nine month inquiry into the state of crime and disorder, kind of on the high street looking at illicit trade, dodgy shops, shoplifting and ASB. And there is a real perception that crime is out of control. We know from polling that 79% of adults are concerned about the decline of the high street. Nearly 9 in 10, they say they believe that crime and ASB are big issues in their community.
So there is this growing perception in some will point to kind of declining crime rates over time. And actually this perception is a bit of a mismatch with the reality. But what we've seen in our report is that there's been a significant increase in what's termed so-called low level crime volume crime that is incredibly visible to the public on the high street, so-called dodgy shops, or, as we've called them in our report, criminal high street businesses is a real symptom of that.
And we've seen a thousand more shops raided for illicit tobacco. That's what our FOI has found last year compared to the year before. And what we've seen is that part of the reason that perception has increased is because there is a felt lack of consequence. So what repeatedly kind of came up in our work was that and the public feel the high street has become a consequence free zone, that crime is able to go unpunished and is increasing. And we know that is true because 9 in 10 criminal high street businesses stay open even after they've been raided for illicit tobacco.
So fewer than 1 in 10 are closed. Just 8% of shops outside FOI to all local authorities have a responsibility for training standards. So this is a problem that is is perceived to be kind of great in terms of crime and disorder and decline. In particular, that link of crime to decline is really important. And the reality is, is true as well. So that sort of tackling that, that sense of consequence free high streets is crucial for any attempt to drive renewal through the high street strategy.
That's been our kind of core ask.
So there is this growing perception in some will point to kind of declining crime rates over time. And actually this perception is a bit of a mismatch with the reality. But what we've seen in our report is that there's been a significant increase in what's termed so-called low level crime volume crime that is incredibly visible to the public on the high street, so-called dodgy shops, or, as we've called them in our report, criminal high street businesses is a real symptom of that.
And we've seen a thousand more shops raided for illicit tobacco. That's what our FOI has found last year compared to the year before. And what we've seen is that part of the reason that perception has increased is because there is a felt lack of consequence. So what repeatedly kind of came up in our work was that and the public feel the high street has become a consequence free zone, that crime is able to go unpunished and is increasing. And we know that is true because 9 in 10 criminal high street businesses stay open even after they've been raided for illicit tobacco.
So fewer than 1 in 10 are closed. Just 8% of shops outside FOI to all local authorities have a responsibility for training standards. So this is a problem that is is perceived to be kind of great in terms of crime and disorder and decline. In particular, that link of crime to decline is really important. And the reality is, is true as well. So that sort of tackling that, that sense of consequence free high streets is crucial for any attempt to drive renewal through the high street strategy.
That's been our kind of core ask.
10:05
Speaker 1
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Speaker 1
I just wanted to go back to Josh's point. You said that there is there's a perception that there's crime goes unpunished. So the government's looking at giving councils more powers. What do you think those powers should look like? And do you think that's actually going to address those issues that you've you've highlighted?
10:06
Speaker 3
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Speaker 3
So, I mean, we very much welcome the government's ambition on tackling this visible kind of decline on the high street and criminal high street businesses. The planning changes are welcome, but we feel they need to go further. It's not so much a this debate can often get tied into that of aesthetics and kind of what we want our high street to be. What sort of shops do we want? And actually, the issue with these shops that are associated with crime be that vape shops, mini marts, barbers, nail salons, it's not that they're kind of aesthetically sort of not ideal or we want different sort of shops on our high street.
It's that there is criminality associated with them. It's the crime that's going on. And actually, you know, the government's made a welcome change to closure orders with the time length being increased to 12 months. That's a great first step. And they've hinted that they're looking at new powers. So one of our core recommendations in our report was a much stronger closure order power to tackle crime when it occurs in these shops. As we found, fewer than 1 in 10 are closed.
So there needs to be a stronger tool for the police and trading standards to use to shut down these shops when crime occurs. And part of that means what we've said is that there should be an instant closure order. So that should not include the magistrates court in the first instance. At the moment, closure orders have to go through the magistrates court, which can add to significant delays. What we've said is that trading standards and the police should have a tool similar to what the fire service have in article 31 prohibition orders, which allow for the instant shutting down of these shops, obviously with a right of appeal where that's necessary, but making sure that these shops can be closed much quicker, reducing the burden of evidence when criminality and the law is broken on, on more than one occasion, that should warrant the use of these powers for a certain period of time.
So that new closure power, which the government has hinted at , looking at, is really needed. And what we're recommending in our in our conversations with them.
It's that there is criminality associated with them. It's the crime that's going on. And actually, you know, the government's made a welcome change to closure orders with the time length being increased to 12 months. That's a great first step. And they've hinted that they're looking at new powers. So one of our core recommendations in our report was a much stronger closure order power to tackle crime when it occurs in these shops. As we found, fewer than 1 in 10 are closed.
So there needs to be a stronger tool for the police and trading standards to use to shut down these shops when crime occurs. And part of that means what we've said is that there should be an instant closure order. So that should not include the magistrates court in the first instance. At the moment, closure orders have to go through the magistrates court, which can add to significant delays. What we've said is that trading standards and the police should have a tool similar to what the fire service have in article 31 prohibition orders, which allow for the instant shutting down of these shops, obviously with a right of appeal where that's necessary, but making sure that these shops can be closed much quicker, reducing the burden of evidence when criminality and the law is broken on, on more than one occasion, that should warrant the use of these powers for a certain period of time.
So that new closure power, which the government has hinted at , looking at, is really needed. And what we're recommending in our in our conversations with them.
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Speaker 6
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Speaker 6
Yeah. Thanks, chair. And this is such an important issue, certainly in Accrington and across Hyndburn. And I think, Josh, in the in your review, there's also a recommendation about an independent review of HMRC's methodology for estimating the illicit tobacco market. And HMRC is due to get estimate and UCL survey of smokers are reporting illicit purchase measures differently. So what further evidence would help policymakers understand the scale of illicit trade and its impact on high streets and the legitimate retailers to be able to, I guess, build that evidence base for the sort of steps that you're proposing there.
10:08
Speaker 3
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Speaker 3
Yeah, that's a that's a great question. And I think HMRC would would say that there's huge uncertainty over the sort of their estimates on the scale of the illicit market, which is a massive problem when we're trying to understand how this issue is affecting the sale of illicit tobacco and vapes on the high street, if we can't even estimate the true scale of the market, that's a real problem. So that was behind our recommendation for them to commit to a revision of their methodology.
So, for example, other estimates have indicated that about 1 in 3 cigarettes that are smoked in the UK are illicit. And that is a very different estimate. And UCL have done their own analysis on this as well, which shows that which which shows they have quite different estimates to HMRC. So it's really important that they commit to a revision of or consultation on the revision of their methodology. There are other ways of sort of trying to estimate the scale of the illicit tobacco market, be that via empty pack surveys, which is what some of the industry do to estimate what's going on.
So that is absolutely an important part of, of the process of us understanding what's going on on the high street.
So, for example, other estimates have indicated that about 1 in 3 cigarettes that are smoked in the UK are illicit. And that is a very different estimate. And UCL have done their own analysis on this as well, which shows that which which shows they have quite different estimates to HMRC. So it's really important that they commit to a revision of or consultation on the revision of their methodology. There are other ways of sort of trying to estimate the scale of the illicit tobacco market, be that via empty pack surveys, which is what some of the industry do to estimate what's going on.
So that is absolutely an important part of, of the process of us understanding what's going on on the high street.
10:09
Speaker 1
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Speaker 1
I've just got one follow up question. As you know, the government's announced they're looking to do a consultation into this as well. There's been quite a number of reviews over the years. What is it specifically you would like to see from the government on this? And I'll bring in Lord Richard as well after. That
10:10
Speaker 3
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Speaker 3
on. Yeah. So stronger closure order powers are absolutely necessary to tackle this problem. We need to see the consultation on licensing for tobacco and vape shops brought forward. So obviously the planning changes are really welcoming, giving communities a greater say in what shops set up. But licensing for tobacco and vape retailers is incredibly important here, because that has the opportunity to become a much stronger kind of conduit for enforcement, because if you are selling illicit tobacco or with a licence and you're violating that licence, or if you're selling it without a licence at all, then it gives local authority teams a much easier way of, of sort of enforcing the law.
If you're selling without a licence or in breach of your licence, that should warrant the closure of your premises. If that is happening on a repeated occasion, and it should lead to prosecution for those offenders that are not engaging with enforcement. So that is going to be a crucial part of the arsenal that is available to police and trading standards that that consultation has been announced, that we're expecting that in the new year. We've said that that needs to be brought forward much more urgently before the year is out, because that is going to be a crucial kind of way of increasing enforcement capabilities to make sure that shops are abiding by the law and tackling tackling those rogue retailers.
If you're selling without a licence or in breach of your licence, that should warrant the closure of your premises. If that is happening on a repeated occasion, and it should lead to prosecution for those offenders that are not engaging with enforcement. So that is going to be a crucial part of the arsenal that is available to police and trading standards that that consultation has been announced, that we're expecting that in the new year. We've said that that needs to be brought forward much more urgently before the year is out, because that is going to be a crucial kind of way of increasing enforcement capabilities to make sure that shops are abiding by the law and tackling tackling those rogue retailers.
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Speaker 3
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Speaker 3
Absolutely. So the core kind of issue that we're seeing on the high street is that the public simply do not trust that there are consequences for crime. And that is reflected in the data on on this issue of illicit trade. So increasing the powers that are available to enforcement agencies is absolutely vital. Stronger closure orders, robust licensing for tobacco and vape retailers. And we've outlined a range of other measures, for example, like stronger penalties for landlords to tackle landlords that are complicit in making money off criminal activity as well.
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Speaker 4
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Speaker 4
So I could just pick up some of the things that Josh has been talking about, because I agree with nearly all of it. Can I pick up Sarah Smith's point about data? I think I would say there's enough data already for people to realize that we have a serious problem here. And at the end of the day, you can only go so far with data. At the end of the day, it's down to policy will, and certainly in trading standards, we would like to see a bit more policy will.
The problem on the ground that we see is that a lot of people think that what's happening is quite low level crime, but it isn't. It's increasingly linked to organised crime. It's increasingly linked to child exploitation, money laundering, immigration. I could go on, and I think one of the things that we want to do, and I think government could do more to to help us, is to bring home to people that when they buy illicit tobacco, what they're actually doing is funding child abuse.
Now, not many people, you know, and I'm not being flippant, I have a history of around child abuse, but not many people want to fund child abuse. And so the way in which we communicate this is not shouldn't be about this. Tobacco may not be safe or, you know, you're funding dodgy providers. It's about where this money is going. So the reality is not understood. That's the first point I would make, I think in terms of the changes, I completely agree with closure orders.
Closure orders need someone to have a good look at them again, because actually they were brought in under the anti-social and disorderly conduct. And what we're worried about is crime. So getting a closure notice, you can't even get a closure notice. If it's just about crime, you've got to be able to show that it is disorderly conduct or some anti-social behaviour. And that's ridiculous. Government needs to get on to that sooner rather than later.
There are . The practical side of crime in the high street doesn't seem to be fully understood, by which I mean there's no real action we can take against landlords. There are a lot of landlords out there who don't look very closely at who they're letting premises to, and unless there are some accountability for that, they're going to carry on doing that. People don't seem to understand the issue of multiple premises. I mean, we can, with help, shut down a shop for a time, but actually that that owner that's probably got 2 or 3 other shops and they'll just move the stuff to those 2 or 3 other shops.
We need closure orders that take account of multiple premises. We need closure orders that take account of the fact that a lot of shopkeepers now stock their goods off premises. So if you raid a place, you get a small amount. Most of the stock is in a card somewhere down the road, I kid you not, or in some other premises which is leased by someone who doesn't appear to have any connection with the people who own the shop.
So there doesn't seem to be a practical understanding of how this criminal behaviour works. And you need that if you're going to make successful legislation. It's the same old story, I'm afraid, with Whitehall and sometimes with Westminster, that policy makers tend not to have a sufficient connection to the people on the ground. I'll leave it at that for the moment, but.
The problem on the ground that we see is that a lot of people think that what's happening is quite low level crime, but it isn't. It's increasingly linked to organised crime. It's increasingly linked to child exploitation, money laundering, immigration. I could go on, and I think one of the things that we want to do, and I think government could do more to to help us, is to bring home to people that when they buy illicit tobacco, what they're actually doing is funding child abuse.
Now, not many people, you know, and I'm not being flippant, I have a history of around child abuse, but not many people want to fund child abuse. And so the way in which we communicate this is not shouldn't be about this. Tobacco may not be safe or, you know, you're funding dodgy providers. It's about where this money is going. So the reality is not understood. That's the first point I would make, I think in terms of the changes, I completely agree with closure orders.
Closure orders need someone to have a good look at them again, because actually they were brought in under the anti-social and disorderly conduct. And what we're worried about is crime. So getting a closure notice, you can't even get a closure notice. If it's just about crime, you've got to be able to show that it is disorderly conduct or some anti-social behaviour. And that's ridiculous. Government needs to get on to that sooner rather than later.
There are . The practical side of crime in the high street doesn't seem to be fully understood, by which I mean there's no real action we can take against landlords. There are a lot of landlords out there who don't look very closely at who they're letting premises to, and unless there are some accountability for that, they're going to carry on doing that. People don't seem to understand the issue of multiple premises. I mean, we can, with help, shut down a shop for a time, but actually that that owner that's probably got 2 or 3 other shops and they'll just move the stuff to those 2 or 3 other shops.
We need closure orders that take account of multiple premises. We need closure orders that take account of the fact that a lot of shopkeepers now stock their goods off premises. So if you raid a place, you get a small amount. Most of the stock is in a card somewhere down the road, I kid you not, or in some other premises which is leased by someone who doesn't appear to have any connection with the people who own the shop.
So there doesn't seem to be a practical understanding of how this criminal behaviour works. And you need that if you're going to make successful legislation. It's the same old story, I'm afraid, with Whitehall and sometimes with Westminster, that policy makers tend not to have a sufficient connection to the people on the ground. I'll leave it at that for the moment, but.
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Speaker 7
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Speaker 7
Thank you. Thank you, Chair Jim, turning to you. Welcome. Thank you for joining us this morning. You've been running quite a long investigation through London Centric about Phoenixing and and enforcement. You wrote an interesting piece for the Financial Times recently about what Andy Burnham should do if he wants to get a grip of this issue. Just to start with, many people assume that dodgy dodgy shops are a are a front for money laundering.
What did your investigation find?
What did your investigation find?
10:16
Speaker 5
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Speaker 5
So London centric, of course, is focused on the capital, but I think it's as relevant to people, whether they're in Accrington or Hertfordshire or Cheshire, such as yourself. What we set out to do was to go, why are these dubious gift shops, these Harry Potter shops, these royal souvenir shops all over central London, they're in some of the most expensive retail properties in the world. These places have six figure rents. What is going on? And like most people, we went, well, this must be money laundering.
No one with any taste or decency would be spending money in their. And then we went in and we found something else. We found that a lot of people were spending money in there. So what's actually going on here? What's the trick? And the more time we spent looking at it, we kept finding tax evasion. It came back time and time again to. If you do not pay VAT, if you do not pay corporation tax, if you simply opt out of your Paye obligations and all the other things that any small business owner has to do, you have a much more profitable business.
And if you have a much more profitable business, you can pay a higher rent than someone who is paying their taxes. And it comes back time and time again with this. With every single example we looked at, we kept finding this. The reason that you've got these shops springing up everywhere is that bad pushes out good. The moment that you are making more money because you have got this optional tax. I really do want to explain the extent to which, having talked to dozens of people in this trade, from the suppliers to the shop owners to the landlords, they all come back to the idea that largely they have realised, particularly post-pandemic, paying tax as a high street enterprise is optional.
And once you get over that mental hurdle, because of the ability to just repeatedly phoenix your company, the ability to discard previous limited companies, the fact that there is a ready supply of people, Patsy directors willing to sign the paperwork for a few hundred quid and start again. And the fact that, crucially, as has been alluded to here, landlords have no responsibility beyond collecting the maximum possible rent. They have almost no other legal duties. If someone comes and says, I can offer you 15 grand a month for this unit, and someone who wants to pay their taxes says, well, if I pay my taxes, there's no way you could pay more than ten grand a month rent.
They're going to go with the person who pays 15 grand a month. It's just the way the world works at the moment and the incentives that they respond to.
No one with any taste or decency would be spending money in their. And then we went in and we found something else. We found that a lot of people were spending money in there. So what's actually going on here? What's the trick? And the more time we spent looking at it, we kept finding tax evasion. It came back time and time again to. If you do not pay VAT, if you do not pay corporation tax, if you simply opt out of your Paye obligations and all the other things that any small business owner has to do, you have a much more profitable business.
And if you have a much more profitable business, you can pay a higher rent than someone who is paying their taxes. And it comes back time and time again with this. With every single example we looked at, we kept finding this. The reason that you've got these shops springing up everywhere is that bad pushes out good. The moment that you are making more money because you have got this optional tax. I really do want to explain the extent to which, having talked to dozens of people in this trade, from the suppliers to the shop owners to the landlords, they all come back to the idea that largely they have realised, particularly post-pandemic, paying tax as a high street enterprise is optional.
And once you get over that mental hurdle, because of the ability to just repeatedly phoenix your company, the ability to discard previous limited companies, the fact that there is a ready supply of people, Patsy directors willing to sign the paperwork for a few hundred quid and start again. And the fact that, crucially, as has been alluded to here, landlords have no responsibility beyond collecting the maximum possible rent. They have almost no other legal duties. If someone comes and says, I can offer you 15 grand a month for this unit, and someone who wants to pay their taxes says, well, if I pay my taxes, there's no way you could pay more than ten grand a month rent.
They're going to go with the person who pays 15 grand a month. It's just the way the world works at the moment and the incentives that they respond to.
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Speaker 5
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Speaker 5
Absolutely. Can I talk the committee through an example of one right at Piccadilly Circus, one of the biggest gift shops in the UK. The landlord is a major London landlord called Criterion Capital. They are completely within their rights to rent to who they wish, and they have repeatedly chosen to rent this to a series of limited companies that are run by 20 somethings with no retail background. Every few months, it shuffles through to a new limited company.
The previous one gains the responsibility for all the taxes the council tax, the business rates, the VAT, all of that. And then every few months that's discarded in favor of a new operator. We at London Centric often try and track down who these people are. You go and knock on the doors of the directors who are supposedly must be overseeing maybe millions of pounds a year in revenue. They're often students in overcrowded accommodation, people who have just arrived in the UK and are in a vulnerable position.
Or in one case, we found that that gift shop I referenced at Piccadilly Circus, which must have a six figure rent and substantial taxes to that effect, was being run by someone who gave their home address as a disused car park in Canary Wharf. Like, I get the feeling these people aren't the ones who are actually in control of the business.
The previous one gains the responsibility for all the taxes the council tax, the business rates, the VAT, all of that. And then every few months that's discarded in favor of a new operator. We at London Centric often try and track down who these people are. You go and knock on the doors of the directors who are supposedly must be overseeing maybe millions of pounds a year in revenue. They're often students in overcrowded accommodation, people who have just arrived in the UK and are in a vulnerable position.
Or in one case, we found that that gift shop I referenced at Piccadilly Circus, which must have a six figure rent and substantial taxes to that effect, was being run by someone who gave their home address as a disused car park in Canary Wharf. Like, I get the feeling these people aren't the ones who are actually in control of the business.
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Speaker 7
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Speaker 7
Okay, so, so often you hear as a solution to this, to this problem that we need to beef up director's duties, we need to there needs to be real jeopardy if you get caught in this. But that wouldn't that's not going to be a solution to this. If you're just finding an impoverished student and putting them up as a patsy to run the run the business.
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10:20
Speaker 5
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Speaker 5
Well, Phoenixing as a whole it's hard to break down what's a high street issue and what is what is particularly to do with phoenixing in other forms, such as construction or whatnot. But HMRC latest figures show at least around £1 billion in 2020 223 was being lost to Phoenixing and that that might go up in more recent years. I just see it time and time again. You can just see when a unit has had 3 or 4 tenants who've all not paid their taxes in the last year or two.
You can see that there's a problem here. Landlords are not responsible, and quite understandably, they do not need to exercise any legal checks on who at the moment they're renting these things to, and that is what's creating the problem.
You can see that there's a problem here. Landlords are not responsible, and quite understandably, they do not need to exercise any legal checks on who at the moment they're renting these things to, and that is what's creating the problem.
10:21
Speaker 7
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Speaker 7
Which body, in your view, should be leading on action against high street tax evasion? The National Audit Office found that HMRC doesn't treat Phoenixing as a strategic risk. They highlighted that HMRC and the Insolvency Service should be working together. Should it be one of those bodies , should be another body entirely. What's your view?
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10:21
Speaker 5
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Speaker 5
I'll be really quick on this just very quickly that the one group that they really fear when I talk to these dodgy shop owners is HMRC. HMRC have the power and the ability to really dig into it, and that's what they really are scared of. If I talk to the operators, they say trading standards, cost of doing business Council can't really do much because the patsy director takes the blame. HMRC and their ability to go up the chain to the real people in control is what they fear.
But HMRC is underfunded and does not have the staff.
But HMRC is underfunded and does not have the staff.
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10:23
Speaker 5
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Speaker 5
Well, there's a there's an interesting debate here because in terms of the total tax take, this might not be the biggest thing in HMRC s remit. And I think particularly under Dan Tomlinson, the the Treasury Minister who briefly had responsibility for HMRC, he did a lot of work in terms of going. This matters in terms of the sort of tax morale of the nation that you're being seen to do this, even if this isn't in financial terms, your biggest priority, this is undermining confidence in the entire system.
And so there's been a you know, I've talked to people, it does seem to be a sea change there. But fundamentally, it's, you know, a decade and a bit of austerity has undermined the ability to have people on the ground who just day by day go. And if I was anyone on this committee, the first call I'd be doing is phoning up HMRC and saying, can you come to my local high street with me and have a go?
And so there's been a you know, I've talked to people, it does seem to be a sea change there. But fundamentally, it's, you know, a decade and a bit of austerity has undermined the ability to have people on the ground who just day by day go. And if I was anyone on this committee, the first call I'd be doing is phoning up HMRC and saying, can you come to my local high street with me and have a go?
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10:23
Speaker 11
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Speaker 11
I don't know if anyone knows. My understanding is that HMRC doesn't have the kind of same you talk about. They're scared of HMRC. If they go into these buildings, they don't necessarily have the same power as the police do in order to investigate. Is that correct? Is there anything we need to look at changing there?
10:24
Speaker 3
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Speaker 3
I mean, so one stat that's been around for a while is that there are over 100 different bodies responsible for tackling organised crime in the UK. So we've got an incredibly fragmented system. I remember going out with trading standards in one area, and they had a multi-day team of action, which is great. You know, all the agencies come together, but I couldn't help thinking this is incredibly inefficient, and it's why National Police Service reforms are incredibly important. It's it's crucial that we recommended this report.
The Home Office follows through with those reforms, reforming our police and boards. And we've also recommended a broader review into the way training standards is structured and more national enforcement body and approach, we feel, would have a better joined up way of tackling this issue, bringing together these bodies. That's a broader kind of issue. I think that we need to be looking at as well.
The Home Office follows through with those reforms, reforming our police and boards. And we've also recommended a broader review into the way training standards is structured and more national enforcement body and approach, we feel, would have a better joined up way of tackling this issue, bringing together these bodies. That's a broader kind of issue. I think that we need to be looking at as well.
10:24
Speaker 9
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Speaker 9
Before I ask my question, Jim, just to say that Warner Brothers is in my constituency. So Harry Potter world as well, if they're properly licensed, obviously we are fully supportive of a global plan. That is the Harry Potter. My question is to Lord about trading standards. This. The Department has said it cannot be confident that trading standards are sufficiently funded and resourced to meet the challenge of illegal activity on the high street.
What level of funding and new resource do trading standards teams require? And if you could tie in with the previous comments about how many different agencies are involved, what would you like to see? Who needs to be leading the charge on sorting this out?
What level of funding and new resource do trading standards teams require? And if you could tie in with the previous comments about how many different agencies are involved, what would you like to see? Who needs to be leading the charge on sorting this out?
10:25
Speaker 4
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Speaker 4
Well, look, training standards are leading the charge on vapes and illicit tobacco, but we're not leading the charge on nail bars and and things which are responsibility of environmental health. How much more money do we need? I actually don't like going along to committees like this and saying we need more money, right? It's not my instinct. However, trading standards have been starved of resources and starved of resources and starved of resources, to the point where one London borough last year had no trading standards officers.
None at all. So I'm not going to tell you, give us a few more million and it'll be all right. We need a serious investment of resources in the trading standards. Coming back to Mr. Cooper's question, there is no one body that is going to resolve this problem. Whatever you do and pride in place. I was the instigator of place as a concept. I think we need to have more focus on places, and we need more working between agencies in a place to solve this problem.
And I say that I started my career doing prosecutions for trading standards. I'm a very old man, but one of the things I learnt from doing prosecution trading standards was how important local intelligence, local network, local knowledge, local contacts was. You know why that shop has suddenly become vacant. You know where the other premises of that owner are. You can work with others to take some action. If you set up a national trading standards organisation, then I think you lose that.
I chair National Trading Standards Board. People have difficulty getting their head around that, but Trading Standards has actually taken the initiative and now has arrangements at a local or regional and a national level. National Trading Standards deals with the big prosecutions which local authorities can no longer cope with because they take up to eight years. I mean, I'm kidding you. Not we've taken eight years recently on a prosecution because professional enablers, as they're now called, find ways of making sure that these cases go on and on and on.
So I don't think with great respect to Josh, I warned him I was going to disagree with him when we were sitting outside. I don't think national trading standards is the answer. You've got to maintain the local knowledge and intelligence and couple it with quite unusual arrangements for government, because we all like to have something centralized. We all like to have structural change. Structural change very rarely delivers you anything. So that that's why I would defend what we've what we've got at the moment.
We are sorry. Do
None at all. So I'm not going to tell you, give us a few more million and it'll be all right. We need a serious investment of resources in the trading standards. Coming back to Mr. Cooper's question, there is no one body that is going to resolve this problem. Whatever you do and pride in place. I was the instigator of place as a concept. I think we need to have more focus on places, and we need more working between agencies in a place to solve this problem.
And I say that I started my career doing prosecutions for trading standards. I'm a very old man, but one of the things I learnt from doing prosecution trading standards was how important local intelligence, local network, local knowledge, local contacts was. You know why that shop has suddenly become vacant. You know where the other premises of that owner are. You can work with others to take some action. If you set up a national trading standards organisation, then I think you lose that.
I chair National Trading Standards Board. People have difficulty getting their head around that, but Trading Standards has actually taken the initiative and now has arrangements at a local or regional and a national level. National Trading Standards deals with the big prosecutions which local authorities can no longer cope with because they take up to eight years. I mean, I'm kidding you. Not we've taken eight years recently on a prosecution because professional enablers, as they're now called, find ways of making sure that these cases go on and on and on.
So I don't think with great respect to Josh, I warned him I was going to disagree with him when we were sitting outside. I don't think national trading standards is the answer. You've got to maintain the local knowledge and intelligence and couple it with quite unusual arrangements for government, because we all like to have something centralized. We all like to have structural change. Structural change very rarely delivers you anything. So that that's why I would defend what we've what we've got at the moment.
We are sorry. Do
10:28
10:28
Speaker 4
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Speaker 4
is working as well as it could possibly work. The relationship between local trading standards and the National board. I would say this wouldn't I is excellent and we work through local trading standards. We fund them if we've got if they've got a big case, we will fund them to take that case to fruition. But if it takes eight years, they wouldn't be able to do it on their own. So I think it is working and we've had some huge successes recently.
I didn't think I'd get towards the end of my career and judge my success on the length of sentences, but I have, and we had a case of a rogue builder a couple of weeks ago where eight people got sentences up to 60, not one person 67 years, but 67 years, you know, so the courts are beginning to take it seriously. But the courts don't have resources either. And they've never seen high streets, retail trading standards cases as the priority.
So there's some investment needs to go into the criminal justice system so that we can get cases through the courts quicker, so that people see action being taken. But please don't blame the people who are struggling on the ground to deliver what I think you want, which is a high street, which is more attractive and which where people are not put off, because when they go to the high street, they meet pretty unattractive characters. I don't know if that answers your question.
You
I didn't think I'd get towards the end of my career and judge my success on the length of sentences, but I have, and we had a case of a rogue builder a couple of weeks ago where eight people got sentences up to 60, not one person 67 years, but 67 years, you know, so the courts are beginning to take it seriously. But the courts don't have resources either. And they've never seen high streets, retail trading standards cases as the priority.
So there's some investment needs to go into the criminal justice system so that we can get cases through the courts quicker, so that people see action being taken. But please don't blame the people who are struggling on the ground to deliver what I think you want, which is a high street, which is more attractive and which where people are not put off, because when they go to the high street, they meet pretty unattractive characters. I don't know if that answers your question.
You
10:29
10:29
Speaker 4
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Speaker 4
Because the powers. Absolutely. I agree with Josh. The powers, the closure order power is a case study, if you like. As I said, if you go for a closure notice and you're doing it because you know there's criminal activity on that premises, you're probably not going to get it if you get it. Well, it works for 72 hours. Then you've got to go for a closure order. If you go for a closure order at the moment, it's not long enough and needs to be extended.
County councils can't go for closure orders. It's only district councils and the police now post local government reorganisation. If we ever are post local government reorganisation, you know that may not be a big issue, but most of us think that's going to be another 3 or 4 years. So in the meantime, we'd like to see county councils having those powers. And I know that might be controversial. I used to run a county council.
I was chief executive of the county council, which is different to running it. So before you point that out. Yeah. So there are things you can do with closure orders, things you can do with landlords. There are all sorts of things that we could do to give more powers to the people who know what's happening on the ground, and sometimes they get very frustrated that it seems to take so long to get legislation onto the statute book to deal with this problem.
I think that's partly because people don't realise the crimes that we're talking about here.
County councils can't go for closure orders. It's only district councils and the police now post local government reorganisation. If we ever are post local government reorganisation, you know that may not be a big issue, but most of us think that's going to be another 3 or 4 years. So in the meantime, we'd like to see county councils having those powers. And I know that might be controversial. I used to run a county council.
I was chief executive of the county council, which is different to running it. So before you point that out. Yeah. So there are things you can do with closure orders, things you can do with landlords. There are all sorts of things that we could do to give more powers to the people who know what's happening on the ground, and sometimes they get very frustrated that it seems to take so long to get legislation onto the statute book to deal with this problem.
I think that's partly because people don't realise the crimes that we're talking about here.
10:31
Speaker 11
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Speaker 11
Thank you chair. I think changing tax a little bit and thinking about planning powers, governments quite recently singled out vape and betting shops in recent policy announcements. I'll come to you, Josh, first, because I think you sort of touched on this in your first answer. Do you think those are the right outlets to target and why?
10:31
Speaker 3
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Speaker 3
They they are to the extent that criminality is associated with them. So we know from polling of trading standards officers that in some areas, over half of vape shops and mini marts are thought to be linked to organised crime groups, which is an astonishing stat. But I think we make perhaps not a mistake, but we perhaps emphasize the wrong issue when we talk about the aesthetics of a shop, be that a vape shop or a mini mart, and we think, oh, I just don't want another vape shop.
I just don't want another mini mart. Whereas for us, the real problem isn't, you know, the aesthetic and the planning powers are good, but limited in this extent in that they focus on allowing certain shops to, to sort of set up or provide sort of greater control over what shops set up. Whereas the real issue is, as Lord Bouchard has said, is, is the crime that is associated with these premises. And this is what we have to be focusing on, is tackling the criminality, which goes much deeper than illicit trade, which is why, you know, we've spoken about kind of resourcing of the criminal justice system of local authorities, and those things will take years to remedy.
But there are powers we can bring in in the immediate term planning powers. Absolutely part of the equation, but really robust closure orders where we allow for the instantaneous shutting down of these shops on the spot, make it a police priority as well. Bring the police into this alongside training standards so we can do this quickly. Mobilise all that resource by stronger closure powers, tobacco and vapes licensing, much more robust penalties for landlords.
You know, for example, why don't we consider one of the things we considered is, is making landlords who have been warned about criminality but taking no action, making them liable for unpaid business rates. You can talk about broader reform of the business rate system, but in the short term, that's something we could consider doing. So absolutely vapes and mini mart to the right retailers to go after. To the extent that associated criminality, criminality is associated with them. But but more broadly, we need to be focusing the conversation on the crime rather than the kind of aesthetic of the high street, although that's important as well.
I just don't want another mini mart. Whereas for us, the real problem isn't, you know, the aesthetic and the planning powers are good, but limited in this extent in that they focus on allowing certain shops to, to sort of set up or provide sort of greater control over what shops set up. Whereas the real issue is, as Lord Bouchard has said, is, is the crime that is associated with these premises. And this is what we have to be focusing on, is tackling the criminality, which goes much deeper than illicit trade, which is why, you know, we've spoken about kind of resourcing of the criminal justice system of local authorities, and those things will take years to remedy.
But there are powers we can bring in in the immediate term planning powers. Absolutely part of the equation, but really robust closure orders where we allow for the instantaneous shutting down of these shops on the spot, make it a police priority as well. Bring the police into this alongside training standards so we can do this quickly. Mobilise all that resource by stronger closure powers, tobacco and vapes licensing, much more robust penalties for landlords.
You know, for example, why don't we consider one of the things we considered is, is making landlords who have been warned about criminality but taking no action, making them liable for unpaid business rates. You can talk about broader reform of the business rate system, but in the short term, that's something we could consider doing. So absolutely vapes and mini mart to the right retailers to go after. To the extent that associated criminality, criminality is associated with them. But but more broadly, we need to be focusing the conversation on the crime rather than the kind of aesthetic of the high street, although that's important as well.
10:33
Speaker 11
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Speaker 11
Yeah. So just sort of taking that on to this next stage, let's imagine a world in which we because I think this is the interesting question. You've sort of got government broadly that's talking about freeing up the planning process more broadly, but on a high streets wants to be far more interventionist. I think probably that's where most of most of Parliament and political will also is. So just jumping back to first principles for a second, let's say you solve your criminality problem in a hypothetical world.
And let's say Jim's tax avoidance problems are also solved with a new beefed up HMRC in that universe, do you still think we should be talking about more through the planning process or any other process? More control over what goes on a local high street? Or do you think in that world you'd be fine letting the free market make those decisions?
And let's say Jim's tax avoidance problems are also solved with a new beefed up HMRC in that universe, do you still think we should be talking about more through the planning process or any other process? More control over what goes on a local high street? Or do you think in that world you'd be fine letting the free market make those decisions?
10:34
Speaker 3
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Speaker 3
That's a great question, and that's why we've chosen to emphasize in our research the role of licensing for control rather than the planning process, because I think it works well when you allow the planning process to be as free as possible so the high streets can change and evolve over time. That's that's really crucial. It's why we've also in our report have outlined how successful examples of where design codes, for example, have been used to de-risk development, retail to residential conversion, shopfront design codes, and also how we could use a much stronger brownfield passport, as the government has hinted at to to fast track development, using local development orders as one mechanism to increase and incentivize development on the high street and to remove those hurdles that often place often are in place of developers.
So I think that's a that's a I think that's a welcome principle to have, is that the planning system should be as free as possible to allow the high street to change over time, whilst making sure there is robust enforcement where we need it. And that's why tobacco and vapes licensing for those retailers is crucial, because it would make sure every retailer who is selling those products are required to have a licence, and therefore the enforcement becomes much easier when you notice someone violating that or not, or trading without one.
So I think that's a that's a I think that's a welcome principle to have, is that the planning system should be as free as possible to allow the high street to change over time, whilst making sure there is robust enforcement where we need it. And that's why tobacco and vapes licensing for those retailers is crucial, because it would make sure every retailer who is selling those products are required to have a licence, and therefore the enforcement becomes much easier when you notice someone violating that or not, or trading without one.
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Speaker 3
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Speaker 3
So I think I think this is kind of comes back to my point about, I guess, emphasizing kind of the aesthetic of the high street and tackling the issue of vape shops, mini marts through that lens, rather than betting shops are included within that, rather than focusing on the underlying criminality, because obviously betting shops and kind of criminal high street businesses, as we've kind of referred to them, often seen in the form of mini marts or vape shops are very different entities.
A betting shop. We might not like them, but it's not necessarily run by organized crime. Yeah. Whereas whereas the organised criminal element, that absolutely has to be the priority. And it's why, you know, when we consider questions of vacancy and tolerating vacancy rates, obviously no one wants a high street full of vacant shops, but it is much more preferable for in the short term, there to be a vacancy than to tolerate organised crime on the high street, because that's what we're tolerating at the moment.
And we know this crime goes much deeper. We've spoken to charities that are working, supporting families whose kids are being exploited by the criminals running these shops, who are being given vapes, the lace, spice and other forms of drugs. It's not just a few dodgy cigarettes being sold. This is much deeper organised crime, as Lord Borchard has pointed out.
A betting shop. We might not like them, but it's not necessarily run by organized crime. Yeah. Whereas whereas the organised criminal element, that absolutely has to be the priority. And it's why, you know, when we consider questions of vacancy and tolerating vacancy rates, obviously no one wants a high street full of vacant shops, but it is much more preferable for in the short term, there to be a vacancy than to tolerate organised crime on the high street, because that's what we're tolerating at the moment.
And we know this crime goes much deeper. We've spoken to charities that are working, supporting families whose kids are being exploited by the criminals running these shops, who are being given vapes, the lace, spice and other forms of drugs. It's not just a few dodgy cigarettes being sold. This is much deeper organised crime, as Lord Borchard has pointed out.
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10:37
Speaker 12
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Speaker 12
Yeah, I just wanted to make the point because I was Josh, I didn't really understand your point around design codes and the rest of it, because I don't think they go far enough. I do think the government is right to look at the planning system, because when I think about my high streets in Broxbourne, Waltham Cross and Hoddesdon, they're all market towns. And where people get annoyed is they don't necessarily get annoyed with one vape shop or one nail bar, or one Turkish bar or one mini mart.
It's like the town's taken over overnight. Suddenly you go from having none to having five vape shops all in the same market town, right? And you walk past. There's no there's no one in there. You walk past all the barbers, there's no one in there. So you think, well, how can they be? How can they be making money? And I understand the organised crime part of that. But surely a quick solution to that is giving the council powers, because everyone thinks the council's got powers anyway.
And then people moan to me, they're like, why is the council let another let another one of these open? We've already got we've already got 4 or 5 of them. Is let the council have powers under the use classes to basically say, we've had enough of that. We're not having any more of that. We need X or Y in the town centre.
It's like the town's taken over overnight. Suddenly you go from having none to having five vape shops all in the same market town, right? And you walk past. There's no there's no one in there. You walk past all the barbers, there's no one in there. So you think, well, how can they be? How can they be making money? And I understand the organised crime part of that. But surely a quick solution to that is giving the council powers, because everyone thinks the council's got powers anyway.
And then people moan to me, they're like, why is the council let another let another one of these open? We've already got we've already got 4 or 5 of them. Is let the council have powers under the use classes to basically say, we've had enough of that. We're not having any more of that. We need X or Y in the town centre.
10:38
Speaker 3
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Speaker 3
Yeah, I think we. Sorry. We would we would welcome what the government's doing on that because we feel like that that power for local authorities is welcome. But my point is that it's not the only kind of power that's needed, because having the ability to not just to stop these shops selling up, but when there's crime taking place, to be able to shut that shop down quickly, to prosecute, to close down, that's crucial as well. And when we think about that and how we kind of reopen the high street, one of the other things we've looked at is how government might, you know, for example, strengthen the high street rental auctions.
For example, if a shop has been shut down for criminal purposes, if we go if we want to see extended closure orders, then why don't we waive the 12 month period for a shop to be closed in order to use high street rental auctions, we can think quite creatively about how we give local authorities the ability to bring empty premises back into use, because under that process, the local authority would have a veto over which shop is allowed to open up again in that premises. So there are kind of creative ways we can use existing policy to tackle perhaps some of the secondary effects if we were to see a stronger kind of closure enforcement regime.
But absolutely, those planning changes are welcome. And
For example, if a shop has been shut down for criminal purposes, if we go if we want to see extended closure orders, then why don't we waive the 12 month period for a shop to be closed in order to use high street rental auctions, we can think quite creatively about how we give local authorities the ability to bring empty premises back into use, because under that process, the local authority would have a veto over which shop is allowed to open up again in that premises. So there are kind of creative ways we can use existing policy to tackle perhaps some of the secondary effects if we were to see a stronger kind of closure enforcement regime.
But absolutely, those planning changes are welcome. And
10:39
Speaker 12
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Speaker 12
then a quick follow up just on crime, if I may. So the government's obviously taxing high street businesses more. They reduce their rate relief from 75% to 40% on the business rates relief. They've obviously made it more costly to employ someone through the national insurers. Employers increase, so they've made it harder for legitimate businesses who pay their taxes to make money. Has that had a consequence on crime on the high street about all of these other places doing organised crime?
10:39
Speaker 5
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Speaker 5
I think it certainly, from my experience, what it comes back to is that the cost of running a high street business is now very high. Therefore, the rents that landlords expect cannot be supported via a lot of legal means. So the landlord in a fair market would accept a lower rent. But those rents are being kept high because, as I said, if you take the Phoenixing multiple limited companies option of opting out of taxes altogether, you can maintain that old rent level.
So really a lot of this is landlords not being willing to accept that the high street rent levels need to fall for legitimate businesses, and then the criminals walking into the gap and saying, we'll still make that monthly payment.
So really a lot of this is landlords not being willing to accept that the high street rent levels need to fall for legitimate businesses, and then the criminals walking into the gap and saying, we'll still make that monthly payment.
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10:40
Speaker 5
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Speaker 5
It is it is in the tradition of local journalism largely going out, knocking on doors and talking to the people running the shops who say, you know, a landlord is known that they had an offer for this unit. And then mysteriously, someone who is a newly formed limited company in a track record of phoenixing gets it instead. And the word on the street is they paid so much more for it. It comes down to quite often it wouldn't be written down on a contract as well.
10:41
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10:41
Speaker 2
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Speaker 2
Thanks very much. The the mayor's position very much supports planning as a place maker. So in terms of restricting the number of types of premises, then we would tend to agree that probably a planning matter. When it comes to place management though, that's when licensing and trading standards, environmental health and the police should all really be working together. If you look at vape shops, once the licensing regime comes in and we've got some very clear views on what that licensing regime needs to look and feel like, bearing in mind experience of other licensing regimes, for example, the alcohol and entertainment licensing regime.
Once that is in place, then you've got clear management over those premises. It already exists for alcohol, it exists for gambling. There are some other areas at the moment where we're still waiting for legislative reform, for example, on beauty and aesthetics, which may or may not, in due course, address things like the barbershops and the nail salons. But the point is that once that management, that management regime is in place through licensing, then as has previously been mentioned, there are more sanctions.
There are more avenues to achieve compliance to achieve well-run premises. And that's what we want to see well-run premises that are compliant and obviously not involved in organized crime or illicit activity. And that requires all of the agencies working together. As I said, licensing, trading standards, environmental health and the police, once planning have set the set the scene.
Once that is in place, then you've got clear management over those premises. It already exists for alcohol, it exists for gambling. There are some other areas at the moment where we're still waiting for legislative reform, for example, on beauty and aesthetics, which may or may not, in due course, address things like the barbershops and the nail salons. But the point is that once that management, that management regime is in place through licensing, then as has previously been mentioned, there are more sanctions.
There are more avenues to achieve compliance to achieve well-run premises. And that's what we want to see well-run premises that are compliant and obviously not involved in organized crime or illicit activity. And that requires all of the agencies working together. As I said, licensing, trading standards, environmental health and the police, once planning have set the set the scene.
10:43
10:43
Speaker 11
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Speaker 11
Just one very quick one, if that's all right. Chair Josh, in your answer, you mentioned high street rental auctions. Looking around this power, is it is it currently being used very often? If not, you talked about some of the relaxing. If not, why not? And what should we be doing in order to make sure it is used more?
10:43
Speaker 3
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Speaker 3
That's a great question. I don't think they're being used to the extent that any local authority or member of Parliament would want them to be used. At the moment, I sort of hear a lot of frustration that they're difficult to get off the ground. Part of that is local authority resourcing capacity to better use them, obviously working through the legal system. But I think, as you know, for example, in the past we had, I think the High Streets Taskforce, which worked really well to build capacity within local authorities.
That was a team based at Mhg, which would build capacity within local authorities, give them the helping hand to be able to use new powers to be able to, you know, consider new strategies for regeneration. So something like that could definitely be beneficial within the high street strategy to sort of build that capacity of local authority so we can use these powers more because they would definitely have a positive role to play in both bringing back empty shops into use.
And as we've recommended, tying that to a stronger closure regime so we can bring back shut down premises because no one wants to see closed down premises on the high street. But absolutely, it needs to be more resourcing and capacity of local authorities for them to take off.
That was a team based at Mhg, which would build capacity within local authorities, give them the helping hand to be able to use new powers to be able to, you know, consider new strategies for regeneration. So something like that could definitely be beneficial within the high street strategy to sort of build that capacity of local authority so we can use these powers more because they would definitely have a positive role to play in both bringing back empty shops into use.
And as we've recommended, tying that to a stronger closure regime so we can bring back shut down premises because no one wants to see closed down premises on the high street. But absolutely, it needs to be more resourcing and capacity of local authorities for them to take off.
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10:45
Speaker 2
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Speaker 2
Thank you. So we've we've recommended certainly a modelling of tobacco and vapes licensing on alcohol and entertainment. But there are some key lessons that have been learned along the way. One of those which I would bring your attention to is a need for a national database. So if you're if you're licensing people and you're licensing premises, then we need a regime where personal licenses are trackable, traceable, and are renewed, or there is some facility to ensure that that licence is still in use.
For example, under the Licensing Act, personal licenses have been issued since 2005, but they remain live. We have no idea if those individuals that hold the licenses are using them or are even still with us. So there are some there are some key lessons there, but fundamentally, the Licensing Act 2003 works well. It does have that system for both premises and personal licenses, and it brings in all of the responsible authorities, including, as I said earlier, police, environmental health, trading standards and others.
That brings in a multi-agency partnership. The licensing authority is also a responsible authority. The license is issued, but there is a quick avenue for review. That licence can be pulled back in for review if any of the licensing objectives are undermined, and those include crime, there's no no requirement for it to be crime and anti-social behaviour, as was mentioned earlier, for example, and that that that license is then pulled back into the local authority with options on conditioning, suspending, revoking all of those things.
For example, under the Licensing Act, personal licenses have been issued since 2005, but they remain live. We have no idea if those individuals that hold the licenses are using them or are even still with us. So there are some there are some key lessons there, but fundamentally, the Licensing Act 2003 works well. It does have that system for both premises and personal licenses, and it brings in all of the responsible authorities, including, as I said earlier, police, environmental health, trading standards and others.
That brings in a multi-agency partnership. The licensing authority is also a responsible authority. The license is issued, but there is a quick avenue for review. That licence can be pulled back in for review if any of the licensing objectives are undermined, and those include crime, there's no no requirement for it to be crime and anti-social behaviour, as was mentioned earlier, for example, and that that that license is then pulled back into the local authority with options on conditioning, suspending, revoking all of those things.
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10:46
Speaker 8
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Speaker 8
Yeah. Thank you chair. We touched a little earlier on the place concept and pride of place. And the Prime Minister said that he wants to improve high streets and to make them the symbols of British Renaissance. So my question really is, is is that vision achievable if we have, in some situations, economic conditions that we are seeing, or at least demonstrate the suggestion that only unwanted businesses are viable?
10:47
Speaker 5
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Speaker 5
I mean, without sounding like a broken record, I come back to two things. Rather than trying to come up with new laws, enforce the existing ones, and resource the agencies that you need to enforce those laws well, and that secondly, landlords need to both take responsibility and accept that the market rents that they want are no longer sustainable. And as soon as there is a level at which someone will want that unit in a shopping centre and might be able to do something interesting and beneficial with it, but until the landlord drops that rent, then you're going to have problems.
10:47
Speaker 4
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Speaker 4
I. I know the Prime Minister is very committed to devolution and to place, and I think that has got to be the only route to the answer. I'm sorry, but Westminster and Whitehall are not the solution to the British high street. And I think Sue was saying just a moment ago that a lot of this has got to be around people locally, sharing intelligence and taking action, and particularly through licensing.
On the basis of that intelligence. I just throw in, by the way, that it's not always easy to share intelligence in this system. I could name a surprising police authority that is very reluctant to share its intelligence, and I do not know why that is the case. Sharing intelligence is a resource. It's as important a resource as money when you're dealing with this issue. And we've got to have a situation where everyone is sharing their intelligence and using that to make to make decisions.
I suspect it's the last time and you'll be pleased the last time I have a chance to speak. Can I just make two points that have not been covered at all that you might want to come back to? One is we talked about Phoenixing. Yeah, but a lot of the problems that we have are not through companies. They're not set up as companies. And nothing you do about directors and, and the rest of it is going to have an impact in Gloucester or Cheltenham or where I live.
Right. Because a lot of the people were worried about are not companies anyway. So you just need to kind of get beyond the London Phoenix issue. Sorry, Jim. The other point, which we're not going to have a chance to touch on at all, is ports and borders, where an awful lot of this material is coming into the country. I spent a morning last year at Dover, and I was shocked at just how easy it is to get through the controls at Dover, the local authorities, the trading standards people are not involved in the governance of what's going on there, and it's hit and miss.
So sometime in your inquiry, someone ought to talk to you. I think about ports and borders and whether or not we need a more coordinated approach there.
On the basis of that intelligence. I just throw in, by the way, that it's not always easy to share intelligence in this system. I could name a surprising police authority that is very reluctant to share its intelligence, and I do not know why that is the case. Sharing intelligence is a resource. It's as important a resource as money when you're dealing with this issue. And we've got to have a situation where everyone is sharing their intelligence and using that to make to make decisions.
I suspect it's the last time and you'll be pleased the last time I have a chance to speak. Can I just make two points that have not been covered at all that you might want to come back to? One is we talked about Phoenixing. Yeah, but a lot of the problems that we have are not through companies. They're not set up as companies. And nothing you do about directors and, and the rest of it is going to have an impact in Gloucester or Cheltenham or where I live.
Right. Because a lot of the people were worried about are not companies anyway. So you just need to kind of get beyond the London Phoenix issue. Sorry, Jim. The other point, which we're not going to have a chance to touch on at all, is ports and borders, where an awful lot of this material is coming into the country. I spent a morning last year at Dover, and I was shocked at just how easy it is to get through the controls at Dover, the local authorities, the trading standards people are not involved in the governance of what's going on there, and it's hit and miss.
So sometime in your inquiry, someone ought to talk to you. I think about ports and borders and whether or not we need a more coordinated approach there.
10:50
Speaker 3
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Speaker 3
Yeah. Just quickly on your your question about how do we drive community renewal in places where there are lots of issues of disadvantage and shops that are associated with crime? We know that these shops congregate in those areas, but there are really positive examples of change that are being driven locally. So the Csj, we work with about 950 grassroots charities across the country, and there's some amazing case studies that I'd recommend looking at. So back on the map in Sunderland, this is a small charity that has basically bought up half their high street, and they had a high street full of vacant shops.
They took ownership of some of the premises. They worked with the landlords to get those deals through. They then worked with the community to reopen about 4 or 5 different shops on the high street, and have made them viable. So this is a really locally driven, grassroots thing that came out of, I think, the New Deal for communities in the 2000. So that's a great model for how pride in place for capital investment, for example, and capacity building within small grassroots charities can drive renewal on the high street, gyroscope and whole.
Another fantastic example where they are buying up community assets driving that regeneration locally. So there are some fantastic examples of where perhaps areas that have been challenged historically by issues of disadvantage, low income, have been able to to see real change through kind of mobilising the sort of amazing small medium charities that are working across the country.
They took ownership of some of the premises. They worked with the landlords to get those deals through. They then worked with the community to reopen about 4 or 5 different shops on the high street, and have made them viable. So this is a really locally driven, grassroots thing that came out of, I think, the New Deal for communities in the 2000. So that's a great model for how pride in place for capital investment, for example, and capacity building within small grassroots charities can drive renewal on the high street, gyroscope and whole.
Another fantastic example where they are buying up community assets driving that regeneration locally. So there are some fantastic examples of where perhaps areas that have been challenged historically by issues of disadvantage, low income, have been able to to see real change through kind of mobilising the sort of amazing small medium charities that are working across the country.
10:51
Speaker 8
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Speaker 8
That that's really that sounds really exciting. Do you think that and that sort of leads on to what else I was going to ask is about, you know, to what extent can pride in place have an impact in this? And I think I think you've covered that, but happy if anybody else wants to come in on that, do you think those neighborhood boards and the pride in place boards are involving the right people to make those strategic decisions about regeneration, which can command both community support and that real change in our high streets?
10:51
Speaker 3
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Speaker 3
It's a really interesting question. I spoke to some of our charities sort of before this about pride in place that we work with, and they they see it as an amazing opportunity, but they also are worried that perhaps there could be too much kind of local authority control, perhaps that kind of devolution out of local government to this sort of grassroots organizations, voluntary organisations, third sector isn't being kind of realized as much as it could be. You know, for example, like, could we see some of the kind of funds from Pride in Place sort of be delivered through , as well as these neighbourhood boards, as well as through some of some of the, perhaps the small charities, medium charities that have got experience organising capital schemes, or could they act in a kind of consultative role? How do we kind of push out more power and resources from the local authority to the neighbourhood boards, to the grassroots organisations that know what initiatives work, what will help their people, and what will drive kind of change in their community.
So yeah, lots we can be ambitious for in that sense.
So yeah, lots we can be ambitious for in that sense.
10:52
Speaker 4
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Speaker 4
I mean, the situation across the country is different in different places. Of course, I talked about the problems with Whitehall and Westminster, which I could go on for for hours, but there are also problems in some places about the extent to which local authorities are prepared to pass on power in their areas. Some of them have done it absolutely brilliantly and some haven't. But if we're serious about devolution, if we're serious about place, then all the statutory agencies need to change the way in which they operate.
They need to collaborate better between themselves, and they need to be confident enough to devolve more power locally.
They need to collaborate better between themselves, and they need to be confident enough to devolve more power locally.
10:53
10:53
Speaker 6
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Speaker 6
you. I mean, this has just been such a useful and interesting session. I just wanted to like have the last chance really for anybody to bring more to. We've talked a lot about the need for that greater enforcement, but also the barriers and the challenges with actually that enforcement being possible. Is there anything more the government could do to address the kind of economic incentives that sustain illicit trade that has not already been spoken about, that you would add before we close.
10:53
Speaker 5
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Speaker 5
I think the Lord Bishop, Lord Bishop, had said the issue, whether it's phoenixing through companies or whether it's individuals trading, that you can kind of shed the prosecutions, you can shed the attempts to make people pay their taxes and that you can walk away from from your debts. And that sort of the fact that British enforcement in this area tends to rely on people being a good chap who follows the law rather than actually coming down on them hard, is, is a key part of this.
And I do just keep coming back to the idea that, you know, the Al Capone approach to prosecuting these people is the simplest and most available one to us.
And I do just keep coming back to the idea that, you know, the Al Capone approach to prosecuting these people is the simplest and most available one to us.
10:54
Speaker 1
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Speaker 1
Anyone else got any questions? I want to say thank you for coming to speak to us. Given us a lot to think about, particularly in terms of enforcement powers. And he was talking about a national licensing database. I'm certainly going to look at some of the suggestions that you've raised, particularly where there is good work being done elsewhere, because I think we could see how that's worked and how that could be replicated. It varies from area to area.
So thank you for your time. So we'll be in touch with you probably with some follow up questions on in terms of the work that we're doing on this. So order, order. We're now going to start panel two. You've had an opportunity to hear probably what we've discussed on panel one. Can you introduce yourselves so we will know who you are?
So thank you for your time. So we'll be in touch with you probably with some follow up questions on in terms of the work that we're doing on this. So order, order. We're now going to start panel two. You've had an opportunity to hear probably what we've discussed on panel one. Can you introduce yourselves so we will know who you are?
10:55
10:56
10:56
10:56
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10:56
10:56
10:56
Speaker 5
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Speaker 5
The reaction is not another one. What do you say to my constituents when they use that wording? And particularly, what do you say to them when they see good, viable businesses closing in this cost of living crisis? But sort of unwanted shops such as vape barbers and betting shops somehow coping and thriving.
10:57
Speaker 7
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Speaker 7
Answer that. Obviously, I would caution against saying that every vape shop is unwanted because, you know, vapes aren't a niche product. They're actually very mainstream products and you have 10% of the adult population. Vape and vapes have been shown to be the most effective and the most widely used smoking quit aid in the UK. And they've also been shown scientifically to be at least twice as effective as nrts in helping people to give up cigarettes.
So clearly, vape shops have a viable consumer and public health function to play. But the other thing I would say is that a shop that sells vapes is not necessarily a vape shop, and there are a lot of shops that sell vapes that shouldn't be selling vapes, in my view. I live in Streatham, but when I walk down very long high road, you see shops like that sell will say reconditioned mobile phones, for example, plus vapes or shampoo and hair extensions plus vapes.
I would question whether that's the appropriate place to be selling an age gated product. On the other hand, I think it's important to make the distinction between generalists and shops that sell anything to anybody, including vapes and specialist vape shops that operate in a completely different model. A lot of them actually age gate on the door, so you can't go into the shop unless you've demonstrated that you're over 18. Oftentimes, the people who work in those shops are trained in the exactly the same way as stop smoking service professionals.
They have to have recycling takeback facilities. They have to be compliant or they should be. They should also be very conscious of fire safety, for example, because they're selling products with batteries. And the other thing that's really important is if you look at the briefing materials produced by the NCS, which is the National College for smoking Cessation training, you will see that they very clearly proactively recommend to stop smoking professionals in the UK that they work collaboratively with their local vape shop.
Now, when they say that, they do not mean the convenience corner store that sells vapes in addition to other things, they mean very specifically the specialist vape shops that operate in this very responsible way and take their obligations seriously. So I think there is a confusion as to what is a shop that sells vapes versus a vape shop. But I think the licensing scheme, which we've been talking about, I think that's going to be key in this regard, because I think you can build in those definitions of what is actually a vape shop, and how can you potentially build in potential freedoms for generalists versus specialists.
And I would also say that we at the UK via think it should be very difficult to get a license to sell vapes. You should be able to demonstrate that you're doing all those things that your age, verifying properly, that you have the processes in place, that you understand that you're selling something that is a potential fire risk, that you train your staff, and that you are able to spend time with consumers and smokers who want to give up smoking and be able to advise them properly.
So clearly, vape shops have a viable consumer and public health function to play. But the other thing I would say is that a shop that sells vapes is not necessarily a vape shop, and there are a lot of shops that sell vapes that shouldn't be selling vapes, in my view. I live in Streatham, but when I walk down very long high road, you see shops like that sell will say reconditioned mobile phones, for example, plus vapes or shampoo and hair extensions plus vapes.
I would question whether that's the appropriate place to be selling an age gated product. On the other hand, I think it's important to make the distinction between generalists and shops that sell anything to anybody, including vapes and specialist vape shops that operate in a completely different model. A lot of them actually age gate on the door, so you can't go into the shop unless you've demonstrated that you're over 18. Oftentimes, the people who work in those shops are trained in the exactly the same way as stop smoking service professionals.
They have to have recycling takeback facilities. They have to be compliant or they should be. They should also be very conscious of fire safety, for example, because they're selling products with batteries. And the other thing that's really important is if you look at the briefing materials produced by the NCS, which is the National College for smoking Cessation training, you will see that they very clearly proactively recommend to stop smoking professionals in the UK that they work collaboratively with their local vape shop.
Now, when they say that, they do not mean the convenience corner store that sells vapes in addition to other things, they mean very specifically the specialist vape shops that operate in this very responsible way and take their obligations seriously. So I think there is a confusion as to what is a shop that sells vapes versus a vape shop. But I think the licensing scheme, which we've been talking about, I think that's going to be key in this regard, because I think you can build in those definitions of what is actually a vape shop, and how can you potentially build in potential freedoms for generalists versus specialists.
And I would also say that we at the UK via think it should be very difficult to get a license to sell vapes. You should be able to demonstrate that you're doing all those things that your age, verifying properly, that you have the processes in place, that you understand that you're selling something that is a potential fire risk, that you train your staff, and that you are able to spend time with consumers and smokers who want to give up smoking and be able to advise them properly.
11:00
11:00
Speaker 6
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Speaker 6
I think when you see a high street develop and change, it's often driven by by demand will normally we say by demand. So, you know, people demand having a fruit and veg store, a butchers, bakers, whatever the case may be. And there's demand to support those businesses. What we're seeing actually is, is almost reverse of that in a way in that the, the, the vape shops notwithstanding, what, what Marina's just just been saying, or the barbers or the sweet and candy shops and those other shops that that suddenly appear.
It's not demand, but it's business model driven because their business model means that they can make it work on a high street and an empty unit. They can take over or and do that. And the previous panel explained the reasons for that, and often it's due to legitimate businesses. I understand your constituents concerns. You see this changing. But, you know, the property owners don't have much regard for who is renting the property.
They just want their rent and they don't really care about the place and what it's doing to the place. And you hope that the business is taken up properly is legitimate. But too often these days they're not fully legitimate. And that's causing a problem and they tend to masquerade behind. It could be a vape shop, it could be a barbers, it could be a candy store, it could be a Harry Potter store. It could be all sorts of things.
I think the danger might be in terms of looking ahead, if you if the government says, well, we're just we're going to target vape shops, well, the criminals will change the nature of the shop. They just dispose of the vapes and say, okay, we'll sell sweets.
It's not demand, but it's business model driven because their business model means that they can make it work on a high street and an empty unit. They can take over or and do that. And the previous panel explained the reasons for that, and often it's due to legitimate businesses. I understand your constituents concerns. You see this changing. But, you know, the property owners don't have much regard for who is renting the property.
They just want their rent and they don't really care about the place and what it's doing to the place. And you hope that the business is taken up properly is legitimate. But too often these days they're not fully legitimate. And that's causing a problem and they tend to masquerade behind. It could be a vape shop, it could be a barbers, it could be a candy store, it could be a Harry Potter store. It could be all sorts of things.
I think the danger might be in terms of looking ahead, if you if the government says, well, we're just we're going to target vape shops, well, the criminals will change the nature of the shop. They just dispose of the vapes and say, okay, we'll sell sweets.
11:01
11:01
11:01
Speaker 8
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Speaker 8
The previous group didn't put betting shops and adult gaming centres into the same category as criminal or criminally organised organizations. And I think that classing us as unwanted business. I don't think that's fair. You know, we're a we're a lawful, heavily regulated business that requires an operating licence for the business itself. Then personal licence holders and DBS checks for senior managers. I'm I'm DBS checked and I hold a personal management licence myself.
Licences issued by the local authorities and then planning permission is required. You just can't rock up into a high street without going through those hurdles. So checks and measures are already in place. And I understand some of your constituents may not want the particular mix in a in a high street, but some of your constituents are our customers as well. And those that want betting shops want betting shops because there is a demand for it.
Licences issued by the local authorities and then planning permission is required. You just can't rock up into a high street without going through those hurdles. So checks and measures are already in place. And I understand some of your constituents may not want the particular mix in a in a high street, but some of your constituents are our customers as well. And those that want betting shops want betting shops because there is a demand for it.
11:03
11:03
11:03
Speaker 13
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Speaker 13
just wanted to pick up you said, Marina, that I think frequently we would expect that age gating at the door and that trained person inside a vape shop that would be able to take, you know, talk to people about smoking cessation. So can you tell me you were quite vague on the statistics around how frequently that is actually happening? If I was to go around and I don't know the full number on top of my head, but there are plenty of vape shops across Accrington and Rishton, Great Harwood and my constituency.
If I was to go around tomorrow, knock on all the doors of how many of those would I get? Age gated at the entrance and expect a trained person to talk me through smoking cessation when I walked through the doors? And secondly, based on the fact that most, you know, they are advertising directly to children, that is what I see in the windows of vape shops that I see popping up across my constituency. And how you would, you know, suggest at this point that we are defending that industry instead of exploring how it is alongside smoking a regulated, non advertised cabinet behind the counter that is only available and not promoted directly to children and adults alike.
If I was to go around tomorrow, knock on all the doors of how many of those would I get? Age gated at the entrance and expect a trained person to talk me through smoking cessation when I walked through the doors? And secondly, based on the fact that most, you know, they are advertising directly to children, that is what I see in the windows of vape shops that I see popping up across my constituency. And how you would, you know, suggest at this point that we are defending that industry instead of exploring how it is alongside smoking a regulated, non advertised cabinet behind the counter that is only available and not promoted directly to children and adults alike.
11:04
Speaker 7
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Speaker 7
Well, again, I think you're confusing shops that sell vapes with vape shops, which is the distinction I was trying to make because if you actually walk down the high road, I would say there are actually very few vape shops. What I consider and what we consider in the business to be a vape shop, is a shop that makes between 90 and 100% of its revenue by selling non-combustible nicotine products.
11:04
11:04
Speaker 7
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Speaker 7
can't speak to every every single vape shop in the country, but that is the model that we understand and we promote in the UK via. And if you look at, say, like a V, P, z, for example, or, or in Avapro, they definitely work on those models and they work very closely with their local authorities and very closely with stop smoking services and very closely with smokers in their community who. Want
11:05
11:05
Speaker 7
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Speaker 7
Well, I can't say right now, but I'm sure we can get back to you. But what I can tell you is when Trading Standards did some mystery shopping last year, if you're looking at the shops on on the high road, about 23% of them failed when they were challenged with age verification. So we absolutely agree that this is a massive problem. And we as the UK via want really strong action to be taken against those people.
And that's why for many years we have been we are actually the organisation that has pushed for this licensing scheme. And not only do we think retailers should be licensed, we think that distributors and importers should be licensed as well so that it's completely closed system. And we also think that there should be meaningful sanctions. If you look at the way the system is now, the fine is something like £200 reduced to £100. If you pay it in a couple of weeks.
Well, we would say, why shouldn't it be £10,000? Our members are compliant. It doesn't matter to us how high you make the the fee because you shouldn't be breaking the rule. And we would say, why not have fees like £10,000? Somebody talked about alcohol licencing earlier. And as far as I understand it, if there are if you have two offences in consecutive months in alcohol, as I understand it, you can be fined £10,000.
Well, why not do that with cigarettes and vapes as well. And you can have your licence suspended. And like I said, I think there should be a really high bar to get a license to sell vapes. And I mean, we support that. That is what we want because we think that will help eliminate a lot of these bad actors. And there's no doubt that there are bad actors. And that is one of the reasons why there is such a bad perception of the vape industry in general, because of these bad actors.
And we absolutely agree that they are there and that they need to be dealt with and they need to be dealt with severely, which is why we think the licensing regime is key and potentially planning is key, because if you say potentially go down the road of you want to have a quota for vape shops, well, do you want to license a vape shop that's a vape shop, or do you want to licence a convenience store that also sells vapes? And I think you need to start making the distinction between a generalist that sells vapes, where I think they should be behind display cabinets versus a specialist nicotine retailer.
Because if you think about this, if you sort of consider a shop that sells vapes to be a vape shop, that's like considering a petrol forecourt that sells cigarettes to be a tobacconist, and they're not the same thing and they're dealt with differently. You can go into a tobacconist as an adult, and you can see the products that you want to buy, because you have made the decision to go there. You're going to buy that product versus somebody who accidentally encounters that in the supermarket, which is why I think there is a legitimate argument for having display restrictions in those environments.
And that's why for many years we have been we are actually the organisation that has pushed for this licensing scheme. And not only do we think retailers should be licensed, we think that distributors and importers should be licensed as well so that it's completely closed system. And we also think that there should be meaningful sanctions. If you look at the way the system is now, the fine is something like £200 reduced to £100. If you pay it in a couple of weeks.
Well, we would say, why shouldn't it be £10,000? Our members are compliant. It doesn't matter to us how high you make the the fee because you shouldn't be breaking the rule. And we would say, why not have fees like £10,000? Somebody talked about alcohol licencing earlier. And as far as I understand it, if there are if you have two offences in consecutive months in alcohol, as I understand it, you can be fined £10,000.
Well, why not do that with cigarettes and vapes as well. And you can have your licence suspended. And like I said, I think there should be a really high bar to get a license to sell vapes. And I mean, we support that. That is what we want because we think that will help eliminate a lot of these bad actors. And there's no doubt that there are bad actors. And that is one of the reasons why there is such a bad perception of the vape industry in general, because of these bad actors.
And we absolutely agree that they are there and that they need to be dealt with and they need to be dealt with severely, which is why we think the licensing regime is key and potentially planning is key, because if you say potentially go down the road of you want to have a quota for vape shops, well, do you want to license a vape shop that's a vape shop, or do you want to licence a convenience store that also sells vapes? And I think you need to start making the distinction between a generalist that sells vapes, where I think they should be behind display cabinets versus a specialist nicotine retailer.
Because if you think about this, if you sort of consider a shop that sells vapes to be a vape shop, that's like considering a petrol forecourt that sells cigarettes to be a tobacconist, and they're not the same thing and they're dealt with differently. You can go into a tobacconist as an adult, and you can see the products that you want to buy, because you have made the decision to go there. You're going to buy that product versus somebody who accidentally encounters that in the supermarket, which is why I think there is a legitimate argument for having display restrictions in those environments.
11:08
Speaker 6
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Speaker 6
Just to build on that, I guess. I think Marina's right that the licensing as we have alcohol would be appropriate for vapes. If we have real concerns about who's using vapes and how they're being used. And, and yes, they've reduced smoking, but we don't know if you're not quite sure what, what the damages rates might be doing. So licensing would be appropriate. Generally speaking, I'm not a fan of licensing. And one of the reasons against it is, is one of the unintended consequences that you drive distribution in a different channel.
And that channel in this case could be online and those very same products that you're doing well to, to sell responsibly and responsible shops behind counters and in cabinets are just displayed online in a way, any way, shape or form they want to. And I think we have to be if we are going to take action against this kind of retailing, then we have to address the online potential escape route and make sure that the online businesses are equally responsible as anyone else in that respect.
And that channel in this case could be online and those very same products that you're doing well to, to sell responsibly and responsible shops behind counters and in cabinets are just displayed online in a way, any way, shape or form they want to. And I think we have to be if we are going to take action against this kind of retailing, then we have to address the online potential escape route and make sure that the online businesses are equally responsible as anyone else in that respect.
11:09
11:09
Speaker 3
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Speaker 3
I mean, you gave obviously a compelling case for licensing, which the government is looking at. What's your position on the sort of marketing. So, you know, even if you've got these legitimate vape shops that are doing all the things you talk about, how would you feel about them still whacking massive shiny signs on the front advertising these vape shops, which then other people, as Andrew just said, are going and buying online?
11:09
Speaker 7
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Speaker 7
Well, because there's two things there. There's marketing and online. So if I talk about marketing first, I think there's obviously , again, a legitimate case for controls, obviously on display and branding and things like that. But I would also say that the knee jerk reaction is oftentimes to confuse visibility with access. Because if you think about what , what is the problem that we're trying to solve here? The problem I think that we're trying to solve in addition to all the other things around criminality, but what vapes in particular, people are quite concerned about youth access, right? I think that is the big issue.
But visibility and access are not the same thing. And I think, again, you come back to enforcement, I would make the argument that it doesn't matter if there's a yellow sign on the window. If when you go into that shop, that person is doing what they're supposed to do and obeying the law.
But visibility and access are not the same thing. And I think, again, you come back to enforcement, I would make the argument that it doesn't matter if there's a yellow sign on the window. If when you go into that shop, that person is doing what they're supposed to do and obeying the law.
11:10
Speaker 3
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Speaker 3
But the only argument you gave for, for the existence of these vape shops in the first place is they're good at getting people off cigarettes. Right? Fine. There's some health evidence behind that, I think, as you can talk to that. But we've now got a million people vaping in this country. You also said there was demand for it. 10% of people vape got a million people vaping in this country who have never smoked.
We think based on the latest stats. So I would argue probably the reason why we're increasingly getting so many people vape who have never smoked and aren't using it as a smoking aid is because they're getting pretty good at marketing vapes and whacking these shiny signs on the front. So the marketing clearly is a problem in and of itself, right?
We think based on the latest stats. So I would argue probably the reason why we're increasingly getting so many people vape who have never smoked and aren't using it as a smoking aid is because they're getting pretty good at marketing vapes and whacking these shiny signs on the front. So the marketing clearly is a problem in and of itself, right?
11:11
Speaker 7
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Speaker 7
Well, I can go back to the marketing, but what I, what I would say is humans have used nicotine for more than in the scientific record. There's evidence for 1300 years so far, which is actually impressive given that tobacco disintegrates. So humans have used nicotine probably through the history of humanity. And people will probably always use nicotine, or at least some people will. Now, in an ideal world, I'm sure everybody would like to think nobody will use nicotine.
But like, let's look at alcohol. 80% of adults in the UK drink alcohol, 75 to 80% of people drink coffee. And obviously, I don't think there's anything wrong with drinking coffee, but some people think, well, that's caffeine. That's also a plant alkaloid. So I think in the real world, we have to accept that some people may always want to use nicotine. Now, from my point of view, you know, as someone in my father in law died last year from lung cancer, from smoking, and he was afraid to use a vape because of all the stuff he had seen in the paper.
From my point of view, I think it's really important for people to have access to what I would call clean nicotine and access to clean nicotine, but also access to clean nicotine and products that they actually want to use.
But like, let's look at alcohol. 80% of adults in the UK drink alcohol, 75 to 80% of people drink coffee. And obviously, I don't think there's anything wrong with drinking coffee, but some people think, well, that's caffeine. That's also a plant alkaloid. So I think in the real world, we have to accept that some people may always want to use nicotine. Now, from my point of view, you know, as someone in my father in law died last year from lung cancer, from smoking, and he was afraid to use a vape because of all the stuff he had seen in the paper.
From my point of view, I think it's really important for people to have access to what I would call clean nicotine and access to clean nicotine, but also access to clean nicotine and products that they actually want to use.
11:12
Speaker 3
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Speaker 3
Sure. But I just think they can still have access to it without blaring, right? Like big shiny signs out the front of shops talking about it. Right. I mean, that's why I'm pushing on the marketing. All of the other points you made compelling enough. I mean, surely there's no point you've made that doesn't also lead to the conclusion that we should probably stop marketing on our high streets for vapes, right?
11:13
11:13
Speaker 3
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Speaker 3
on access. I think everyone gets the access point. I'm just even if we solve all of those problems, yes, you're still going to have an increasing number of people vaping who never smoked. So the product is not solving the problem it was intended to solve. If you've got this marketing problem, right.
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11:14
Speaker 1
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Speaker 1
The concerns I have about children as well, they're being drawn to this as well. Increasingly, I see it within my constituency. So I guess from a marketing point of view, what could be done differently to kind of make sure that children aren't drawn into vaping side, particularly from a very young age, because we see the negative impact that has.
11:14
Speaker 7
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Speaker 7
Well, like I said, I think that the knee jerk reaction is to confuse visibility with access and to always when regulating to go for the product. And what I would say is that in the last couple of years, the burden of compliance is getting it's getting harder. The compliant industry is absorbing all this, this burden of compliance. And in the meantime, that's not going to make non-compliant people any more compliant because the you know, I don't think the answer to rules being broken is to create new rules.
And I think the most important rule here is that you shouldn't sell these products to somebody who's under 18. And if you can't enforce that rule and people are already breaking that rule, making new rules won't work. Which is why I think properly resourced enforcement is vital in addition to the licensing scheme. And I think that's why if we have a licensing scheme and we have licensing fees, I think we should ring fence those fees to support trading standards.
Because at the end of the day, if somebody is going to sell a product to a young person, I don't think targeting the product is going to change that. I think you need to make it not worth their while to do that. And again, going back to meaningful penalties, making it difficult to get a licence in the first place, and making sure that trading standards is properly resourced. At the moment, if you look at, say, trading standards, if you look at food, for example, there's a statutory requirement.
It's a three year inspection cycle. There is nothing like that for vapes. And if you look at the way things are working at the moment, you would be inspected probably every 11 years.
And I think the most important rule here is that you shouldn't sell these products to somebody who's under 18. And if you can't enforce that rule and people are already breaking that rule, making new rules won't work. Which is why I think properly resourced enforcement is vital in addition to the licensing scheme. And I think that's why if we have a licensing scheme and we have licensing fees, I think we should ring fence those fees to support trading standards.
Because at the end of the day, if somebody is going to sell a product to a young person, I don't think targeting the product is going to change that. I think you need to make it not worth their while to do that. And again, going back to meaningful penalties, making it difficult to get a licence in the first place, and making sure that trading standards is properly resourced. At the moment, if you look at, say, trading standards, if you look at food, for example, there's a statutory requirement.
It's a three year inspection cycle. There is nothing like that for vapes. And if you look at the way things are working at the moment, you would be inspected probably every 11 years.
11:16
Speaker 1
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Speaker 1
I just want to get back on that point because from what you're saying, it's down to enforcement and stronger licensing to deter this. Does wanted to find out if the Vaping Industry Association has also done some work to see how they could help, essentially, particularly as you see an increase in the vaping industry. Yeah. As Chris has mentioned, you've seen the stats already, but from your organization perspective, perception in terms of how you can change the way that vaping businesses are operating, particularly in terms of what I said earlier, the negative impacts on children, like what reflection has been done in that space.
11:17
Speaker 7
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Speaker 7
Well, we do test purchasing of our members to assess their age verification processes. That's one thing we do. Another thing we do is that we have built into our websites a reporting mechanism so that people can report shops or say, dodgy shops or shops that are selling to underage people. And we've had to date 1500 complaints made, which I think is quite a big number. And we work very closely with trading standards and we have done for years, and we provide that information to the Trading Standards Institute, and then they provide that to their regional teams so that they.
They can go out, hopefully, if they're if they have the resource to, to deal with those problems.
They can go out, hopefully, if they're if they have the resource to, to deal with those problems.
11:17
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11:18
Speaker 15
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Speaker 15
I just wanted to come in very briefly. So the Tobacco and Vapes Act, which I will declare, I took through the House of Commons at second reading on behalf of the government and does actually include a consultation on marketing and advertising, branding, flavours and marketing, particularly at children. And now, Doctor Murphy, you touched on marketing a product, would you agree? However, I mean, we've got people here talking about alcohol. We talk about gambling.
We talk about tobacco as products. You know, all of those three products are addictive. But not everybody that gambles is addicted to gambling. And not everybody that drinks alcohol is addicted to alcohol. But almost everybody that consumes tobacco is addicted to nicotine. And almost everybody that consumes nicotine, whether that's in a tobacco product or whether it's in, you know, a vape or whatever, is addicted. So would you accept that? Actually, when we're talking about marketing, we're not actually talking about marketing a product.
You're talking about marketing an addiction, which is often leads to people then having to, you know, work extremely hard to, to relieve themselves of not needing that product anymore. And that that's why I think it, you know, that's why I think it makes sense that vapes are marketed and sold specifically as smoking cessation tools rather than nicotine products for people to enjoy.
We talk about tobacco as products. You know, all of those three products are addictive. But not everybody that gambles is addicted to gambling. And not everybody that drinks alcohol is addicted to alcohol. But almost everybody that consumes tobacco is addicted to nicotine. And almost everybody that consumes nicotine, whether that's in a tobacco product or whether it's in, you know, a vape or whatever, is addicted. So would you accept that? Actually, when we're talking about marketing, we're not actually talking about marketing a product.
You're talking about marketing an addiction, which is often leads to people then having to, you know, work extremely hard to, to relieve themselves of not needing that product anymore. And that that's why I think it, you know, that's why I think it makes sense that vapes are marketed and sold specifically as smoking cessation tools rather than nicotine products for people to enjoy.
11:20
Speaker 7
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Speaker 7
Well, first off, smoking is addictive, but nicotine is dependence forming, and it very much depends on how it's delivered. And there are scientific scales of addiction. And, and there's been a lot of work on looking at relative addiction between cigarettes, e-cigarettes, nicotine pouches, and Ortiz, for example. So NRT are less addictive than, than our dependence forming, I should say, than cigarette smoking is addictive. Having having said that, I would say that these products are age gated products for adults.
I think adults are adults and they're able to make decisions for themselves. And I think that's recognised in the alcohol industry. Alcohol is clearly visible to everybody. You go into Tesco and there's like rows and rows of shelves of alcohol. It's comes in colorful packaging. They even use cartoons on, you know, cans. But what they do and they seem to do well and it works well, obviously in the alcohol industry.
Is that the age gate at the point of sale? And I think the success they're.
I think adults are adults and they're able to make decisions for themselves. And I think that's recognised in the alcohol industry. Alcohol is clearly visible to everybody. You go into Tesco and there's like rows and rows of shelves of alcohol. It's comes in colorful packaging. They even use cartoons on, you know, cans. But what they do and they seem to do well and it works well, obviously in the alcohol industry.
Is that the age gate at the point of sale? And I think the success they're.
11:21
11:21
Speaker 3
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Speaker 3
Yeah, I'll skip most of my questions. That's right chair, because I know we're I'm conscious of time, but I'll come on just on on betting shops, I think follow up on this because I think we probably covered vaping quite extensively. The key priority everyone agrees get rid as was covered in the previous panel, get rid of the all of the problems that are causing the free market not to exist on our high street. The next problem is then, even if you solve all those problems, you've still got shops that create negative externalities and I think.
create negative negative externalities, addiction problems, things that we've been talking about. And I think that there's a broad view. I think it's broadly accepted by everyone, that there's at least some externalities negative that are caused by betting and gaming shops. What, what, what responsibility do you think council should have in regulating those kind of shops on the high street? And would you not welcome some clarity from the government on how that's going to be be used in the planning law?
create negative negative externalities, addiction problems, things that we've been talking about. And I think that there's a broad view. I think it's broadly accepted by everyone, that there's at least some externalities negative that are caused by betting and gaming shops. What, what, what responsibility do you think council should have in regulating those kind of shops on the high street? And would you not welcome some clarity from the government on how that's going to be be used in the planning law?
11:22
Speaker 8
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Speaker 8
I think the clarity is already there, and local authorities do have extensive powers, especially under planning and licensing. So in terms of planning, so we sit in sui generis already. And I know the government said they wanted to clarify that, but we do actually sit in sui generis, which means of its own kind. So every application that we make has to go in front of, has to be accompanied by an application. We no longer have permitted rights we used to have back in the day.
We could go to banks, estate agents, any class restaurant use. But now we have to make a fresh application. So it's. It's scrutinised at the planning stage by the local authority. Some local authorities already do write policies into their local development plan that controls where we can open. So Tower Hamlets is a good example. Their plan establish establishes the betting shops. Adult gaming centres can only open in specified locations, and they also state that they will be resisted where there is an overconcentration.
So we you talk about clustering. Whether it's near a school or where the proposal would harm the character of a location. So a local authority is already have those powers. And and I've just picked our hamlets there, but there'll be others I think Knowsley Council, Westminster, Westminster, Manchester. So council throughout the land adopt these local policies that mean that we can't just rock up anywhere and you won't have clustering because it's not allowed under the planning regime.
As a secondary protection, you have licensing which upholds the licensing objectives. And I think I think the vape industry could learn a lot from the model that we are regulated under, because it's really robust. It controls where we can advertise. It insists on age gating and testing on a regular basis. And the licensing. So we have three objectives. I apologize, I apologize if I'm teaching you to suck eggs, but we have to protect the vulnerable.
We have to ensure that we aren't associated with crime or disorder , and that our policies are fair and open. But one of the things that's often overlooked is that that local authorities, members of the public, responsible authorities can actually ask to review a premises. So if a premises is licensed and people do have concern, there's a, there's a, there's a , there's a safety mechanism that allows those premises to be reviewed and they can be closed if it's found that we aren't upholding those licensing objectives.
So if someone is worried about crime and disorder and that association, they can take us to task and take us to review. And that will be heard in front of committee, and they can revoke the license and close us down.
We could go to banks, estate agents, any class restaurant use. But now we have to make a fresh application. So it's. It's scrutinised at the planning stage by the local authority. Some local authorities already do write policies into their local development plan that controls where we can open. So Tower Hamlets is a good example. Their plan establish establishes the betting shops. Adult gaming centres can only open in specified locations, and they also state that they will be resisted where there is an overconcentration.
So we you talk about clustering. Whether it's near a school or where the proposal would harm the character of a location. So a local authority is already have those powers. And and I've just picked our hamlets there, but there'll be others I think Knowsley Council, Westminster, Westminster, Manchester. So council throughout the land adopt these local policies that mean that we can't just rock up anywhere and you won't have clustering because it's not allowed under the planning regime.
As a secondary protection, you have licensing which upholds the licensing objectives. And I think I think the vape industry could learn a lot from the model that we are regulated under, because it's really robust. It controls where we can advertise. It insists on age gating and testing on a regular basis. And the licensing. So we have three objectives. I apologize, I apologize if I'm teaching you to suck eggs, but we have to protect the vulnerable.
We have to ensure that we aren't associated with crime or disorder , and that our policies are fair and open. But one of the things that's often overlooked is that that local authorities, members of the public, responsible authorities can actually ask to review a premises. So if a premises is licensed and people do have concern, there's a, there's a, there's a , there's a safety mechanism that allows those premises to be reviewed and they can be closed if it's found that we aren't upholding those licensing objectives.
So if someone is worried about crime and disorder and that association, they can take us to task and take us to review. And that will be heard in front of committee, and they can revoke the license and close us down.
11:25
11:25
Speaker 15
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Speaker 15
Sort of sticking on the the gambling issue as well. So the. I think you've covered sort of the issue of clustering and that local authorities can make those decisions. Does the gambling industry consider to any extent, or what to what extent do they consider the concentration of existing venues when making planning applications?
11:26
Speaker 8
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Speaker 8
Well, we take a commercial view. If I'm straightforward, you know, like any business, we take a commercial view first and then we look at planning policy. And if it if it says, look, you can't be in this location, it's a waste of time. So we won't look. I think, you know, ultimately we want thriving town centres as well. So, you know, and, and we will only go if we think there's a demand for our product.
Okay.
Okay.
11:26
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11:26
Speaker 8
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Speaker 8
And I think that comes down to demand. You know, we look at footfall, we look at what's what's in the available location, you know, who operates there already and whether we can offer something new. Because if we don't offer something new, if we don't invest in a location and we'll spend, you know, upwards of £300,000 refurbishing a shop that's potentially been vacant for for many years. So we are looking to invest in those locations and, and, and who to say that? Who are we to say who can enjoy that pastime?
11:27
Speaker 15
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Speaker 15
Okay, so I think leading into health questions there, which I will stay off in terms of the aim to permit rule, do you think that that would have a significant impact on the number of outlets that get permission to open, and particularly considering that the Nppf includes a presumption in favour of sustainable development?
11:27
Speaker 8
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Speaker 8
It's hard. It's hard for me to say because we don't know what the proposal is to replace it. So. I'm probably going to sit on the fence a little bit because I just don't know what what's going to happen. I think our members are probably quite they think that the 2003 act works quite well, which doesn't have a name to permit. I think I'll read if that's okay, I think.
Yeah, sure. License Licensing Authority must carry out its functions under this act with a view to promoting the licensing objectives. And then we'll have the in our case, the three licensing objectives. So that's probably a workable solution. But again, that's that's that's my opinion. I don't know what the government are thinking.
Yeah, sure. License Licensing Authority must carry out its functions under this act with a view to promoting the licensing objectives. And then we'll have the in our case, the three licensing objectives. So that's probably a workable solution. But again, that's that's that's my opinion. I don't know what the government are thinking.
11:28
11:28
Speaker 1
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Speaker 1
I just wanted to go back to the question that Ashley raised about gambling and betting shops being located near the areas that are most vulnerable, where there's high rates of high deprivation. There is data from the University of Bristol that does support this. And I know you're you said you look at the data in terms of where there is the need. So I just wondered if it links into some of the stuff that we discussed earlier in terms of the marketing and who is targeted.
So do you actually look at the the stats in terms of deprivation levels, in terms of.
So do you actually look at the the stats in terms of deprivation levels, in terms of.
11:29
Speaker 8
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Speaker 8
We, we have. to we have to risk assess that. So every new licence is, has to be accompanied by a local area risk assessment, which we call Laras. And in that we have to assess the, the local area profile so that we can mitigate against that. So if if there are high levels of crime, the you know, we will consult with the police and say, look, what additional measures can we deploy? It could be external CCTV, it could be bag knocks on the door.
It could be open shop frontages, depending on what we consult with with the police. So we do look at areas of deprivation because we have to. So we do take that into consideration.
It could be open shop frontages, depending on what we consult with with the police. So we do look at areas of deprivation because we have to. So we do take that into consideration.
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11:31
Speaker 13
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Speaker 13
Yeah. Thank you. I am very briefly, because I think there has been a lot of focus around this, but I just wanted to see if you wanted to say a little bit about the bebop act. I say it correctly from Netherlands, because I know there's been suggestions from Minister McDougall that that's something that the government here are looking at, particularly around the approach it takes to screening of potential business owners in this space, and also whether there's anything more any of the panel want to talk about in terms of further policy changes the government should consider to combat the tax noncompliance on our high streets, which sounds like such an important issue.
If we're going to get equality of access for legitimate businesses to be able to to function and thrive on our high streets.
If we're going to get equality of access for legitimate businesses to be able to to function and thrive on our high streets.
11:31
Speaker 6
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Speaker 6
I'm not aware of the act as such. It's to do with health. I guess I'll pick up the tax aspect though, because it's not just it's not just a illegal businesses don't pay their due taxes or pay staff, the National Living Wage and all those other aspects. It's the fact that alongside that is the cost of running a legitimate business are now so high and simply just continue to rise. And I think that revitalisation of any high street and what the Prime Minister's mentioned about wanting to make them a sign of our of our recovery is well, is very laudable, but we need proper action to bring that up.
And until we start to seriously ask ourselves, how do we allow new businesses, new entrepreneurs, young people to come into with a great idea into the retail world, into the high street world? Not to be retail. It could be a cafe, it could be a, it could be a great food offering. It could be something like that. Until we allow those businesses to establish themselves properly and have themselves a chance to make some money, they're not they're not looking to be millionaires.
These people, you know, they're often doing it because it's, it's something they're really passionate about. Then then we will always have those problems. And what's happening is that the, the, the illegitimate traders have seen this opportunity and saying, well, you know, why don't we take up the space and, you know, provide stock that's either been stolen from those shops trading probably just to add insult to injury or bring in cheap products from, from, from the Far East duty free, often avoiding VAT as well often unsafe and and selling to the public that way.
So I, I think, I think the previous panel covered really well multi-agency approach, stakeholder approach. I was with the Met Police last week who were doing a big push this week on dodgy shops, but it's multi-agency. It is fire. It is health and safety. It is trading standards, it is police. And that way you will find some way of closing that shop down. So that that really helps. But if you close it down and it becomes empty, you have to encourage people to take it up.
You want a good business to take it up. Not not a dodgy one.
And until we start to seriously ask ourselves, how do we allow new businesses, new entrepreneurs, young people to come into with a great idea into the retail world, into the high street world? Not to be retail. It could be a cafe, it could be a, it could be a great food offering. It could be something like that. Until we allow those businesses to establish themselves properly and have themselves a chance to make some money, they're not they're not looking to be millionaires.
These people, you know, they're often doing it because it's, it's something they're really passionate about. Then then we will always have those problems. And what's happening is that the, the, the illegitimate traders have seen this opportunity and saying, well, you know, why don't we take up the space and, you know, provide stock that's either been stolen from those shops trading probably just to add insult to injury or bring in cheap products from, from, from the Far East duty free, often avoiding VAT as well often unsafe and and selling to the public that way.
So I, I think, I think the previous panel covered really well multi-agency approach, stakeholder approach. I was with the Met Police last week who were doing a big push this week on dodgy shops, but it's multi-agency. It is fire. It is health and safety. It is trading standards, it is police. And that way you will find some way of closing that shop down. So that that really helps. But if you close it down and it becomes empty, you have to encourage people to take it up.
You want a good business to take it up. Not not a dodgy one.
11:33
Speaker 13
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Speaker 13
And so are there any specifics you think are needed to create that incentive, as well as tackling the illicit illegal businesses so that there is, you know, tackling the fact that rents are being pushed up right now by those legal businesses. But are there any, you know, incentives, I guess, to also make sure that those businesses are coming through.
11:34
Speaker 6
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Speaker 6
I guess, further reform of the business rates aspect. So business rates, you start paying from day one, and these businesses may be new and need to establish themselves. And, and maybe there should be some kind of a holiday period, a longer term holiday period for, for that business to establish itself and make make its mark in its, in its chosen marketplace. I, I, you know, I guess start up grants are available, but it's often a very complicated process to apply for them.
And people are often averse to doing that. But if we can simplify that process and, and enabling people to access people that way. And, you know, there's grants available, local authorities centrally. And I think there's a more considered way of, of bringing those businesses into the high street. So yeah, I, I think given the chance, people will, will work very hard to succeed. I think we are just making that chance so much smaller to through existing policies.
And people are often averse to doing that. But if we can simplify that process and, and enabling people to access people that way. And, you know, there's grants available, local authorities centrally. And I think there's a more considered way of, of bringing those businesses into the high street. So yeah, I, I think given the chance, people will, will work very hard to succeed. I think we are just making that chance so much smaller to through existing policies.
11:35
11:35
Speaker 7
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Speaker 7
Yeah, I think it's worth considering the bebop act, especially in the context of licensing. And I know there are other things happening, like closure orders being extended and more money going into, you know, preventing criminal activity on the high street. But of course, that's necessarily kind of after the fact. So something has already happened. The horse has bolted, so to say. And with the bebop act, it's prevention led. And as you said, integrity screening.
And I think that a lot of the powers exist already, but to your point, spread across across agencies. And I think what the Dutch do well is they bring together information from lots of different functions, and they also have a kind of wider scope. Whereas we may look at the applicant, they look at the applicant's entire business environment. So, you know, shareholders, other business partners, other companies that they may be involved with, etcetera. And also, importantly, they don't have to prove that there has been criminal activity or that there will be.
But just based on the information that they have, they are are empowered to make a decision. So I guess we need to legislate for the preemptive nature of something like bebop, but I would imagine it's something that wouldn't necessarily involve, you know, inventing new departments or anything, but maybe kind of a thin layer of coordination whereby you use all the all the powers that already exist and all the information that's already there. I
And I think that a lot of the powers exist already, but to your point, spread across across agencies. And I think what the Dutch do well is they bring together information from lots of different functions, and they also have a kind of wider scope. Whereas we may look at the applicant, they look at the applicant's entire business environment. So, you know, shareholders, other business partners, other companies that they may be involved with, etcetera. And also, importantly, they don't have to prove that there has been criminal activity or that there will be.
But just based on the information that they have, they are are empowered to make a decision. So I guess we need to legislate for the preemptive nature of something like bebop, but I would imagine it's something that wouldn't necessarily involve, you know, inventing new departments or anything, but maybe kind of a thin layer of coordination whereby you use all the all the powers that already exist and all the information that's already there. I
11:36
Speaker 6
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Speaker 6
think, I think also it comes back to that issue of how do you bring the landlords into this constructive debate? Because there's no doubt they own the properties. I understand why they don't want to leave an empty property. I understand that, but we are landlords as well. In our own business. We own office property that we rent out. I don't have to even check whether they legitimately can be in the UK. If I employ someone, I have to check that, but I don't have to check anyone in that respect.
I just need someone who's going to sign the lease. Now, I don't do that. I show a degree of due diligence. I want to see the company accounts on that business. I want to know what their what their background is. And I want to know what their projections are. So landlords can be far more due diligence and not just take the biggest bidder that comes along, which is happens too often. I think we have to bring the landlord population, corporate and small into this whole debate about, you know, avoiding the criminals, getting hold of the property, because that may well bring down the rents that allow those new businesses to come in as well.
I just need someone who's going to sign the lease. Now, I don't do that. I show a degree of due diligence. I want to see the company accounts on that business. I want to know what their what their background is. And I want to know what their projections are. So landlords can be far more due diligence and not just take the biggest bidder that comes along, which is happens too often. I think we have to bring the landlord population, corporate and small into this whole debate about, you know, avoiding the criminals, getting hold of the property, because that may well bring down the rents that allow those new businesses to come in as well.
11:37
11:37
11:37
Speaker 14
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Speaker 14
I agree. Okay. Look, I think it's it's fair to say that the business rates regime in this country is quite complicated. It's been through a number of changes in, in recent years in terms of the number of multipliers, in terms of what we offer relief on. And further changes have been proposed by by this government around different types of businesses. What impact have the recent changes to business rates had on different types of high street businesses, in your view? Andrew, coming to you first?
11:38
Speaker 6
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Speaker 6
Unfortunately, it's largely negative. I, I welcome the fact that the government, since coming to power in 24, has talked about transforming business rates and talked about improving it, but effectively, it's tinkered around the edges. And what you end up then is, is, is, you know, unintended consequences. Maybe. And I'll give you an example. So this year on a large retail park near where I live, a large supermarket, which has seen its rateable value increase, but because of the changes made to the system, will pay £70,000 less in business rates for each of the next three years.
Fantastic for that supermarket, it may well keep food prices down. We hope so, but every other shop around it. Independent retailer in Coventry's high streets, where it is, will be paying at least 15% more in business rates. So the idea of of transforming business rates, where larger businesses paid a bit more and smaller businesses paid less, just hasn't happened in real terms. And I think we can't change that until until Treasury Chancellor decides to really actually has to revisit business rates again and say whatever we did didn't really work because we haven't helped small businesses, because next year baked in is another 25% increase.
And after that, there's another bigger increase coming in. And meanwhile, that big store on that retail park will pay less each year for the next three years. So a system that that delivers that kind of result, you can understand why shops on high streets, I mean, it's in their rent increase by 12% on average compared to retail park at 4%. You can see what they're finding it increasingly difficult to make their business model work and leaving it, whereas customers will end up on retail parks where the parking is free, where the choice is, where the big brands are.
And, and you're ending up with a, with a more challenging situation on high streets.
Fantastic for that supermarket, it may well keep food prices down. We hope so, but every other shop around it. Independent retailer in Coventry's high streets, where it is, will be paying at least 15% more in business rates. So the idea of of transforming business rates, where larger businesses paid a bit more and smaller businesses paid less, just hasn't happened in real terms. And I think we can't change that until until Treasury Chancellor decides to really actually has to revisit business rates again and say whatever we did didn't really work because we haven't helped small businesses, because next year baked in is another 25% increase.
And after that, there's another bigger increase coming in. And meanwhile, that big store on that retail park will pay less each year for the next three years. So a system that that delivers that kind of result, you can understand why shops on high streets, I mean, it's in their rent increase by 12% on average compared to retail park at 4%. You can see what they're finding it increasingly difficult to make their business model work and leaving it, whereas customers will end up on retail parks where the parking is free, where the choice is, where the big brands are.
And, and you're ending up with a, with a more challenging situation on high streets.
11:40
Speaker 14
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Speaker 14
Okay, so the government has said that it's reviewing relief for businesses that in, in its view, doesn't make a positive contribution to communities. And we can agree or disagree what that means. But is it fair for businesses that make less of a social contribution to pay more to support the regeneration of high streets? It's an
11:40
Speaker 6
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Speaker 6
interesting one that I. I think you'd be careful how you didn't, how you define social contribution. I know lots of our members, when I talk to them in small places around the UK, will will tell me how they sponsor the local football team and a sponsor some other local charity. Now, is that that social contribution within that area and presumably they would qualify for that. But that's not to say that that if we think about vape shops not offering social contribution, the vape shop may well sponsor the local football team as well.
And so there's that challenge all the way around there, I don't think. But
And so there's that challenge all the way around there, I don't think. But
11:41
11:41
Speaker 6
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Speaker 6
No, no, I'm not. I'm not saying that. But but but there's a there's this definition of social contribution, isn't it? And I don't know what is really meant by it. I understand what people are trying to aim at in that we want, you know, what is perceived to be a negative business on the high street. Is it right that they pay more, or do we offer more relief to the business that that is is seen as more positive? I think that's challenging.
You know, you talk about density of business. When I first started 8 to 10 years ago with this association, everyone was complaining about the density of charity shops. It was, you know, not another charity shop was the phrase. And and that's why I think it's difficult to to differentiate in that way. I think the unintended consequences may, may, may, may deter. I would rather we see lower business rates for all businesses, to be honest.
You know, you talk about density of business. When I first started 8 to 10 years ago with this association, everyone was complaining about the density of charity shops. It was, you know, not another charity shop was the phrase. And and that's why I think it's difficult to to differentiate in that way. I think the unintended consequences may, may, may, may deter. I would rather we see lower business rates for all businesses, to be honest.
11:42
11:42
Speaker 6
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Speaker 6
Yeah, I I'm not sure you needed to do too much. I people talk about property tax and so you the landlords pay it. But that will probably increase rents. Apart from that perspective, I actually think that the last time I felt that businesses, small retailers, high streets, small businesses and high streets were were comfortable with business rates was back in 2024, the last of the 75% discounts that that cost Treasury £2.5 billion.
It was deemed to be too much. The current relief is 900 million. I would argue that's too little. So there should be somewhere in between. I would argue that if we took steps to avoid VAT fraud on online sales, which the government's consulted on, and hopefully will bring that in, that could be worth £1 billion if they keep it tight and don't allow too many carve outs. If we address the the duty free low value items, anything below £135 doesn't pay duty often doesn't pay VAT either.
And it's a billion products coming in under that scope and not all of it properly checked at the ports. But if you if we close that sooner and not in not in October 28th, which is the current schedule, I think that would generate 5 or £6 billion extra income, which I would argue could be used to support high streets and get back to that 75% discount quite easily. So I think there is ways of doing it by using funding and smarter and actually by evening up the competition between cheap imports and what's sold in high streets.
Because don't forget, everything is sold online. The money goes out the economy not into it.
It was deemed to be too much. The current relief is 900 million. I would argue that's too little. So there should be somewhere in between. I would argue that if we took steps to avoid VAT fraud on online sales, which the government's consulted on, and hopefully will bring that in, that could be worth £1 billion if they keep it tight and don't allow too many carve outs. If we address the the duty free low value items, anything below £135 doesn't pay duty often doesn't pay VAT either.
And it's a billion products coming in under that scope and not all of it properly checked at the ports. But if you if we close that sooner and not in not in October 28th, which is the current schedule, I think that would generate 5 or £6 billion extra income, which I would argue could be used to support high streets and get back to that 75% discount quite easily. So I think there is ways of doing it by using funding and smarter and actually by evening up the competition between cheap imports and what's sold in high streets.
Because don't forget, everything is sold online. The money goes out the economy not into it.
11:44
11:44
11:44
11:44
11:44
Speaker 3
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Speaker 3
premise of what we've been arguing about today is broadly, the person who will rent the shop is the person who can pay the most to rent the shop, right? So if you cut the taxes uniformly across the shops, then they'll just still be somebody who can pay a bit more than just people who can pay rent. So most of the economists would agree that a cut in business rates, most of that is just going to get captured by increased rents.
So why do you think they're wrong, that this is suddenly going to give a big boon to shops? I
So why do you think they're wrong, that this is suddenly going to give a big boon to shops? I
11:44
Speaker 6
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Speaker 6
actually don't think they are wrong. I think there's elements of that has occurred, which is why I think in the last revaluation, high street rents went up 10 or 12% compared to the retail parks, about 4 or 5%. And yet all the demand is in retail parks. All the big retailers want to be in retail parks. What a difference. I think it's because big retail negotiate better. So push landlords down a bit more.
And on the high street, the smaller guys don't have that weight and that that strength to do so. And I think some of that rate rebate has, has actually ended up in rent. And we need to find a mechanic of avoiding that happening. Absolutely. I'm not a fan of rent caps. I think bringing in the upward moving upward only rents helps do that. I think tightening up in terms of what landlord responsibilities are and how they find tenants and how they how they recruit them will all help with that.
But I understand the economist argument that if you're not careful, it can end up in rents. Absolutely.
And on the high street, the smaller guys don't have that weight and that that strength to do so. And I think some of that rate rebate has, has actually ended up in rent. And we need to find a mechanic of avoiding that happening. Absolutely. I'm not a fan of rent caps. I think bringing in the upward moving upward only rents helps do that. I think tightening up in terms of what landlord responsibilities are and how they find tenants and how they how they recruit them will all help with that.
But I understand the economist argument that if you're not careful, it can end up in rents. Absolutely.
11:45
Speaker 3
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Speaker 3
The industry, I see why. Right. Because you represent people and they see a big bill from the government and that frustrates them. Right. And they don't seem to have that same relationship with landlords. It just feels if we see the policy solution as business rates rather than, you know, which is then we're not going to end up in a much better place. It's not going to save our high streets. We need to work out how to solve that.
11:45
Speaker 6
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Speaker 6
Yeah. I mean, it's a it's a fair point. And I wouldn't disagree. And yet I would argue that when we had the higher discount, there were less closures. There were businesses that were going. It didn't all yeah, rents didn't go up 75% for a start, you know, that wasn't happening. So some of it does leak into that, but not all of it. Not
11:46
11:46
11:46
Speaker 6
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Speaker 6
I'm not sure I wouldn't. I would argue that that that, you know, before we had business rates, rents went that much higher. Business rates were brought in in 1991. I'm not sure what the what the, what the situation was with rents then. I in many ways, if you just just tweaking one lever business lever will not be Vitalized High Street. It can't be business rates alone. The biggest cost they have is cost of employment.
And that rocketed in the last two years. You've got you've got supply chain inflation, which is really difficult to deal with. Energy costs, you know, on the high street, a cafe, a small cafe, a small restaurant, energy costs are just escalated beyond reason. So it's not just a business rate issue. There has to be a way of, of, of, of challenging all those overheads and saying, what can we do differently? Smarter, knowing that customers are at a point where they're not willing to pay that much more.
And that rocketed in the last two years. You've got you've got supply chain inflation, which is really difficult to deal with. Energy costs, you know, on the high street, a cafe, a small cafe, a small restaurant, energy costs are just escalated beyond reason. So it's not just a business rate issue. There has to be a way of, of, of, of challenging all those overheads and saying, what can we do differently? Smarter, knowing that customers are at a point where they're not willing to pay that much more.
11:47
Speaker 1
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Speaker 1
I just want to say thank you for coming to speak to us. It was good to know a bit more about the work you're doing, and to hear about some of the age verification work that you're doing, and the categorisation of criminal organizations, which you raised in the business rates one kind of lives on. Yes, because when I'm speaking to various businesses and stakeholders, they all have a different perception. You're saying lower business rates would help the sector, but there is obviously a challenge in terms of where the high costs would, would, will be impacted.
But, you know, you've talked about online tax and online companies as well. So we are looking at this in detail. And so we'll be in touch with you if we've got any further questions. So thank you for your time. Thank you. Thank you. And order. Order.
But, you know, you've talked about online tax and online companies as well. So we are looking at this in detail. And so we'll be in touch with you if we've got any further questions. So thank you for your time. Thank you. Thank you. And order. Order.