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News - 16 April 2005
David Lepper, MP

MP calls for better support for small traders

David Lepper has put pressure on the council to influence the cost of rents and rates for small shop owners in the centre of Brighton. The independent retail sector is a main visitor attraction and it is struggling to survive against the conflicting odds of increasing rates and rents on the one hand and decreasing footfall on the other.

David Lepper, Labour and Co-operative party general election candidate for Brighton Pavilion, highlighted the plight of small traders in the city in a speech to Brighton and Hove Chamber of Commerce at the Thistle Hotel, Brighton, on 13 April.

David had been talking earlier in the week with traders in the Lanes about the problems of rising rents and business rates for smaller traders. He said, “These are exactly the people whose businesses give Brighton its individuality.

“It seems to me that as one of the leading property owners in the city centre the council could be looking at imaginative ways in which it might be able to use that role to influence rents to help ensure that we keep in Brighton and Hove those smaller businesses, particularly shops, which attract visitors and make the place such a lively city,” said David.

Vital citywide issues, David told his business audience, included keeping that essential mix of representation of national and international companies and the local, the individual, the quirky even which makes Brighton unique. He said, “Everywhere has its Debenhams and its Tesco, not everywhere has a major Amex headquarters, a shop specialising in vegetarian shoes, Epic, Future Media and the chance to sample every national cuisine on earth.

“That includes finding ways to ensure that many of those new successful businesses that start up here have the room to grow and stay.”

BUSINESS FORUM COMMENT

While every one would agree that the independent retail sector is an essential part of the city’s offer finding a way to protect it is not straightforward.

The North Laine Traders Association (NLTA) had its first discussions with the local authority about the system by which rents are determined nearly fifteen years ago. Little has changed since that time despite government attempts to persuade the property industry to abolish the much hated ‘upward only’ rent clauses that form a part of most commercial leases for small shops in Brighton & Hove. Last month's decision not to legislate against upward only clauses was a blow to small shop-keepers but widely welcomed by the property industry.

The clause means that, no matter how dire the economy, rents can at best only remain the same but never go down. This means that during a recession or an economic downturn independent retailers struggle to meet their overheads as turnover declines.

Up until the late 1990s it was customary for landlords to demand long-term leases of up to 20 years. Now, the increasing acceptance of shorter leases helps to alleviate the problem of rents spiralling out of control because at lease renewal the rent for a property is based on the open market rate and consequently can go down as well as up. Five year leases within the Landlord and Tenant Act which give security of tenure and without any reviews allow the tenant considerable flexibility but are not popular with landlords.

Local authrorities are limited in their scope to reduce rents for independent traders because they have a statutory duty to maximise their revenues from commercial property (which in turn helps to keep council tax down). Brighton & Hove City Council has however, shown willing to consider the term (length) of their leases and offer comprehensive information to small traders about rent reviews and renewals.

The best prospect for keeping rents (and consequently rates as well) at reasonable levels rests with the tenants themselves. Trader’s organisations need to give serious consideration to establishing a rent register in their areas that allow for the free transfer of information about rental levels and new precedents as they are set at review or renewal. It is only by knowing the ‘going rate’ for rent in a street that tenants can decide whether their landlord is asking for too much. Every shop-keeper should get professional representation at rent review from a qualified property consultant. Trader’s associations should also offer advice and guidance to newcomers to the area that might take a vacant unit paying far more than it is worth because they do not know the local area or its trading conditions.


Read related items on:
Retail, pubs, clubs and restaurants
Brighton & Hove City Council
North Laine Traders Association
Lepper, David


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