Bloodbath on the High Street: The oh-so English town where traditional shopkeepers now face closure because of a mad 177% business rates increase
Southwold is one of the most attractive towns on the East Anglian coast, with a Victorian lighthouse, a pier and a row of pretty beach huts.
This bit of the coast attracts an estimated three million day-trippers a year, who are particularly drawn by the Suffolk town’s thriving High Street with its many independent retailers.
It’s home to a selection of fashion stores, cafes, art galleries, a newsagent, a couple of hairdressers, an ironmonger and an old-fashioned sweet-shop. Nearby is a greengrocer and butcher’s that has been here since the 17th century.
Traders are highlighting the rate of the rise by applying the same percentage to their own products, so a loaf of sourdough would be £9 Sausage rolls at the bakery in the town would shoot up to a whopping £8.17
But like many towns, Southwold is facing a serious crisis. In April, a revaluation of business rates is taking place, as is done every five years to reflect property market changes.
Although the Government says rates will fall for businesses in many towns – and those in the East of England as a whole will enjoy a total cut of £180million – there’s concern rates will be too high for some independent outlets, forcing them to close. And Southwold will be hit particularly hard.
Traders say their business rates will rise by an average of 177 per cent, though that figure significantly underestimates quite how severe the increase is, because it fails to include the rebate many small shops currently enjoy which will be stripped away after the revaluation. To highlight their fears, several are warning customers what would happen if they passed all the extra cost on by raising prices.
For example, a baker says a large £3.25 sourdough loaf would be £9.
Traders are putting on a united front against the huge rise and are urging customers to write to the MP
In a nutshell, business rates are based on a premises’ ‘rateable value’, which is the figure the property could in theory be let for annually on the open market, then roughly halved. From April, shops with a rateable value below £12,000 won’t have to pay any rates, instead of the current figure of £6,000. As a result, ministers claim rates (which pay for street cleaning, roadworks and other local services) will fall for 920,000 businesses, remain the same for another 420,000, and increase for 510,000.
But the British Retail Consortium has urged Chancellor Philip Hammond to scrap the rise after it emerged that UK shops pay more in business rates than any other major Western country. Companies such as Pizza Express, Wagamama, Greene King and All Bar One have warned that hundreds of pubs and restaurants could close. And because the rateable values of properties in chi-chi towns such as Southwold have risen more over recent years, small business here will be disproportionately hit by the new rates.
Just one of the businesses has a rateable value of less than £12,000 and will be free of any charge. As of April, only eight of the 44 businesses that currently enjoy some sort of discount will continue to get some relief. The remaining 36 will lose it.
The average business rate increase will mean some retailers must pay an extra £10,000 to £15,000 a year. Many fear they’ll have to pull down their shutters for good. One or two have already done so.
The fact is that Southwold is a victim of its own success. One in three houses in the town are now owned by second home-owners – leading to an inevitable rise in property prices. In the past three years, a number of national chains, including Fat Face, Joules, Seasalt, Costa Coffee and WH Smith, have opened, pushing up rents.
So, how will the small, independent businesses cope?
Worried: Julie Carpenter, who runs Craftco, art and craft shop, 40A High Street, fears her shop will be ‘snuffed out’
Shoppers love the Victorian-style mechanical model of a circus just inside the door. Generations of children have inserted a coin and watched it come to life.
Julie Carpenter, 50, the shop manager of this co-operative, says: ‘It’s been going for 30 years. It’s part of supporting local makers and artists. But we could be snuffed out by these rate increases.’
She is not being dramatic. In the past, the shop paid a mere £152 a year thanks to ‘small business’ rate reliefs. She will lose most of this rebate because of the re-valuation and have to pay an estimated £6,000 once the new rates kick in over the next five years.
Current annual rates: £152
New rates: £6,000
Ground down: Sam Wakman outside his coffee shop, Fifty One, at 51 High Street
‘You can’t cut costs in a business like this,’ says Alison Boucher, 41, who owns the cafe with husband Sam. ‘We work a 60-hour week. If the Government takes away close to £10,000 in business rates, I’m not sure where we’ll find it from. We can’t just put up the price of a cappuccino.’ They employ 13 people and are open 8am to 11pm in the summer. ‘For us to slog our guts out and have that taken away just doesn’t seem fair. I can’t see how it is justified.’
The Government says in the first year, any increase will be capped at 5 per cent. But by the end of the five-year period, the majority of businesses will pay the new rates in full.
Current annual rates: £3,000
New rates: £9,436
Disgusted: David and Ann Knights employ 14 people at the Salon, a hairdressers at 61 High Street
‘You can’t cut your hair on the internet,’ says Ann Knights, 61, who is hopeful her skills are not threatened by the growing lure of internet shopping. The Salon is responsible for 14 jobs in Southwold – hairdressers downstairs, and beauticians operating upstairs. Mrs Knights, who has operated there for 25 years, says the business rates changes are ‘disgusting’. She owns the property so it’s rent-free. ‘Thank God, otherwise we wouldn’t be able to afford to stay here.’
Current annual rates: £2,592
New rate: £10,951
Unexpected blow: Spencer Veevers-Chorlton of Stag Interiors, homewares and interior design, at 64 High Street
Open since last summer, when the previous occupant Susie Mason, owner of seaside gift and clothing shop Gone Crabbing, threw in the towel after seeing what the new rates were going to be.
‘That was the final nail in the coffin,’ she says. She is now focusing on her remaining store in Burnham Market, Norfolk.
Spencer Veevers-Chorlton, 32, then opened Stag Interiors with his brother. He admits he had no idea when he took on the site that rates were due to go up. ‘For a small business, especially starting out, it’s a bit of a shock.’
Current annual rates: £3,961
New Rates: £10,369
Hard times: The rates at Mumfords Ironmongers will go up £15,000, at 66 High Street
A delightful ironmonger that sells a bit of everything for the home and garden, from dog collars and toothpaste tube squeezers, to piping bags and Kilner jars.
It also has a large tool section and seeds for your veg patch. In summer, it sells windbreaks and crabbing lines.
It has been in the family of Amelia Chadd’s husband since the Seventies and since they own the building they don’t pay rent. ‘So we’re not in as desperate straits as some people,’ she says.
‘I’m a believer in market forces,’ adds Mrs Chadd, 56. ‘But if Southwold ends up with no greengrocer and no butcher, we’ll be like everybody else. People will stop coming here, and we’ll end up with a bunch of charity shops.’
Current annual rates: £8,971
Bitter: Alex Loader’s sweet shop will struggle to pay. Above, Squire’s shop and cafe at 71 High Street
A jewel of a shop, on the ground floor of a timber-framed building dating back to 1659. Sells old-fashioned sweets such as violet creams, sticks of liquorice root (30p each), sugar mice for 85p, and jar upon jar of bon bons sold by the weight.
‘It’s going to be a real struggle,’ says owner Robert Loader, 51, who co-owns the shop with his wife Alex. ‘If I was to increase the prices of the sweets the same amount as the rates, nobody would buy them. You aren’t going to pay £4 for a quarter of sweets are you? We just won’t be able to continue.
‘I can’t cut costs. I employ just one person at a time, and you can’t have less than one.’
He pays £22,300 a year to rent the premises. He has a day-job as a maintenance engineer, but if he were to take over running the shop, they’d lose that income.
Current Annual rates: £5,592
Angry: Clare Hart’s card shop, Chapman’s, at 79 High Street is no longer deemed a small business
Clare Hart is a former manager at the national chain WH Smiths. She took over the 120-year-old newsagents a decade ago, along with husband Peter.
The 48-year-old warns: ‘These business rates changes will hit us really hard – unlike competition from the internet, which you can cope with by giving better service, offering a better selection of goods.’
Mrs Hart is angry that her little shop is no longer deemed a small business by Whitehall officialdom, which means that she will lose any small-business discount available and have to pay the full amount of £11,417 by the end of the five- year period.
She adds: ‘We’ll see boarded-up windows. It’s a joke.
‘It’s me and my husband and two part-time staff, who cover for us. We will muddle through, I hope. But we will have to make cost-savings.
‘The easiest way will be to cut back on temporary staff and do more of the work ourselves.
‘But we haven’t got the customers here to sustain it. My average shopper spends just £3.’
Current annual rates: £2,280
Can’t afford to expand: Baker Rebecca Bishop who runs the Two Magpies, bakery and cafe at 88 High Street
One of Southwold’s most successful businesses, selling high-end bread, pastries and coffee.
With space for only 16 covers, Rebecca Bishop, the owner, and a former art teacher, wanted to buy the vacant site next door to expand. ‘But there’s no way I can do that now,’ she says.
The rent of the neighbouring former shoe shop is £60,000 a year and her rates on her existing bakery are due to rise. ‘I’ve had to shelve any expansion plans.’
Rebecca has been leading the campaign among Southwold shopkeepers against the rates increases, arguing that if any more independents move out of town it will lose its character.
‘This is killing the goose that lays the golden egg. Southwold was named by the Rough Guide just last week as the second-best coastal town in Britain, but for how much longer? The independent, diverse High Street is part of that. The independents are the people facing the brunt of this rate re-evaluation, it’s going to squeeze all the independents out. It’ll change the town for ever.’
Current annual rates: £2,000
Howell’s and Jolley Pharmacy: £10,000 rates rise at 100 High Street
Co-owner Mark Howells, 57, says the shop has already been hit by a cut to the fees that the NHS pays pharmacies. ‘It seems the Government wants us to go out of business. We closed the pharmacy bit of our store in October.’
NHS prescriptions used to make up 60 per cent of turnover. The chemist now relies on selling health and beauty products, he says. ‘I don’t think I’ll be able to retire until I am 70… at the earliest.’
Current annual rates: £3,681
New Rates: £13,398
In the family for 165 years: Lyn Knight’s clothes shop, Denny of Southwold, at 11 Market Place
The shop has been trading for 165 years and has clothed locals such as the composer Benjamin Britten and novelist George Orwell – and even made a pair of natty grey flannel shorts for George VI. Owner Lyn Knights, 63, is the great-great-granddaughter of the founder.
It may no longer employ 26 tailors, as it once did, but it sells a selection of upmarket garments from Barbour jackets to silk Japanese kimonos.
Mrs Knights says: ‘We only have 900 residents here and there’s no real catchment area so we rely on holidaymakers. The rates rise will kill everybody.’
She’s cynical about what shopkeepers are paying for through their rates.
‘We pay for our own bins to be emptied, we buy our own hanging baskets. I don’t think we get anything in return.’
She points out that other nearby towns have been hit far less. ‘In Woodbridge [less than 30miles down the coast], it’s just a 5 per cent rise. It is just not fair.’
Current annual rates: £8,039
Big beef: George Mills, of Mills and Sons butchers at 23 Market Place, says rates rises ‘don’t make sense
A sign on the wall boasts: ‘The oldest shop in town. Over three hundred years and still going.’ The Mills family have been in charge for just four years, but this handsome butcher’s shop, selling traditional Southwold sausages for £3.85 a pound, has been here since 1684.
Run by brothers George and Henry, it’s busy when I visit but George, 26, fears trade will drop if they have to put up prices in line with rates. ‘It just doesn’t seem to make sense. If I was to pass on the 175 per cent rise – that’s around an extra £1,000 a month – a pound of sausages would become £12.
‘Our customers just wouldn’t shop here.’
Benedict Doyle, 20, the apprentice there, says: ‘For someone like me, a local, at my age, the only real jobs in Southwold are bar work, being a waiter or building work.’
Current annual rates: £6,524
Time to quit? Crab Apple greengrocer, at 21 Market Place, could close for good
Tracy Brown, 41, a mother of three, says: ‘The margins in fruit and veg are so small as they are. I don’t take any wages from this shop. It just about washes its face.’
She says she is seriously considering whether it is worthwhile continuing running the greengrocers – paying £19,000 a year to rent the premises – as well as a deli she owns in the town.
‘Like most small business owners, I don’t have someone paying me a pension, or holiday pay or maternity,’ she says, while bouncing 13-month-old Bertie on her knee.
‘You cope because you hope to have saved enough when you retire. But that won’t happen if business rates go up as planned.’
Current annual rates: £4,000