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Business News

Retailers unveil strategy to rescue blighted high streets

The British Retail Consortium has urged the Government to help "rescue" the high street from an accelerated demise as the number of boarded-up shops soars during the downturn.

At the launch of the BRC's 21st Century High Streets report yesterday, Alex Gourlay, chief executive of Alliance Boots' health and beauty division, also warned of a "double-dip" recession.

The BRC – which said the report was merely the start of its lobbying campaign – unveiled a series of recommendations, including a freeze on business rates, increased car parking spaces and a crackdown on all retail crime. It added that a more co-ordinated strategy between store groups, local authorities, police bodies and landlords was required to regenerate town centres.

Last week, the fragility of trading on the high streets was laid bare when the property division of the UK's second-biggest carpet retailer, Allied Carpets, was placed into administration, putting about 1,100 jobs at risk and up to 166 of its 217 stores on the market. The BRC said the overall number of vacant town centre shops had tripled to 12 per cent since last autumn, but some towns have vacancy rates of 40 per cent.

Stephen Robertson, the director general of the BRC, said: "High streets are a major part of our national mix but many of them are in trouble, facing difficulties that began well before the current recession." Property is the biggest cost burden faced by retailers, accounting for about one-third of non-inventory costs for retailers, Mr Gourlay said.

The BRC yesterday again called for a freeze on all new property and business rate burdens. On 31 March, the Chancellor, Alistair Darling, spread the introduction of a 5 per cent increase in business rates – based on September's inflation figure – over two years instead of a single rise from 1 April.

Mr Robertson said that retailers contribute 10 per cent to the UK's GDP, but pay 25 per cent of all business rates.

Among its proposals on crime, the BRC said that all retail crime and anti-social behaviour must be deterred, with damaged property being restored as quickly as possible, and called for central government, local authorities and the police to work more closely with retailers. Mr Robertson said: "Crime continues to blight our high street. We really don't think the issue is being taken seriously."

According to the BRC's report, the Government and local authorities should not use car parks "primarily as a means of raising revenue", and that a proportion of funds raised should be ring-fenced to improve car parking options. It cited the example of Barnet Council in north London, which introduced a temporary reduction in the cost of parking from 20 December to 4 January 2009.

On the economy, Mr Gourlay said: "I think there could be a double-dip recession", citing factors including the rise in VAT back to 17.5 per cent from 1 January, growing unemployment and a likely uplift in interest rates and general taxation after the next general election. He added: "The VAT reduction has had a bigger positive impact than people have recognised."