Housing, Communities and Local Government
Oral evidence: Revitalising High Streets, HC 548
Tuesday 13 October 2026
Ordered by the House of Commons to be published on 13 October 2026.
Members present: Ms Abena Oppong-Asare (Chair); Lewis Cocking; Andrew Cooper; Chris Curtis; Ashley Dalton; Mr Will Forster; Mr Gagan Mohindra; Sarah Smith.
Questions 1-57
Witnesses
I: Lord Bichard, Chair, National Trading Standards, Sue Nelson, Director of Policy and Stakeholders, Institute of Licensing, Josh Nicholson, Head of Programme (Housing and Communities), Centre for Social Justice and Jim Waterson, Editor, London Centric.
II: Nindi Dhanjal, Representative, Gambling Business Group, Andrew Goodacre, CEO, British Independent Retailers Association and Dr Marina Murphy, Director, UK Vaping Industry Association.
Witnesses: Lord Bichard, Sue Nelson, Josh Nicholson and Jim Waterson.
Chair: Good morning, everybody. My name is Abena Oppong-Asare. This is my first time as Chair of the Housing, Communities and Local Government Select Committee. I welcome all the witnesses, including the virtual witness. Today is the first oral evidence session of our inquiry into revitalising high streets. We have two panels of witnesses appearing before us today. Will the first panel briefly introduce themselves, starting with Sue?
Sue Nelson: Good morning, everyone. Thanks for letting me join remotely. I am Sue Nelson, director of policy and stakeholders at the Institute of Licensing.
Josh Nicholson: I am Josh Nicholson, head of housing and communities at the Centre for Social Justice.
Lord Bichard: Good morning. I am Michael Bichard, chair of the National Trading Standards.
Jim Waterson: And I am Jim Waterson, editor of London Centric, an investigative London news outlet.
Mr Mohindra: May I just make my declaration of interest?
Chair: Of course.
Mr Mohindra: I refer members of the Committee to my declarations.
Chair: I should probably do the same. I refer everyone to my declarations. For this panel meeting I want to declare that I have Pride in Place in my constituency.
Ashley Dalton: Similarly, I refer to my declarations of interest. I also have a Pride in Place project in my constituency.
Sarah Smith: I have Pride in Place as well.
Q1 Chair: My first question is to Josh: how far does the public perception of high street decline reflect the reality on the ground?
Josh Nicholson: At the Centre for Social Justice we have just conducted a massive nine-month inquiry into the state of crime and disorder on the high street, looking at illicit trade, dodgy shops, shoplifting and ASB. 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 nine in 10 say they believe that crime and ASB are big issues in their community, so there is a growing perception.
Some will point to declining crime rates over time. This perception is a bit of a mismatch with the reality, but what we have seen in our report is that there has been a significant increase in what is 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 have called them in our report, criminal high street businesses are a real symptom of that. We have seen 1,000 more shops raided for illicit tobacco. That is what our FOIs found last year compared with the year before.
Part of the reason that perception has increased is that there is a felt lack of consequence. What repeatedly came up in our work was that the public feel that the high street has become a consequence-free zone, where crime is able to go unpunished and is increasing. We know that that is true, because nine in 10 criminal high street businesses stay open even after they have been raided for illicit tobacco. So fewer than one in 10 are closed—just 8%. That is from our FOIs to all local authorities with responsibilities for trading standards.
This is therefore a problem that is perceived to be great, in terms of crime, disorder and decline—that link between crime and decline is particularly important—and the reality is that it is true as well. Tackling that sense of consequence-free high streets is crucial to any attempt to drive renewal through the high street strategy. That has been our core ask.
Q2 Chair: I want to go back to your point; you said that there is a perception that crime goes unpunished. The Government are looking at giving councils more powers. What do you think those powers should look like, and do you think that that is actually going to address the issues that you have highlighted?
Josh Nicholson: We very much welcome the Government’s ambition on tackling both the visible decline on the high street and criminal high street businesses. The planning changes are welcome, but we feel that they need to go further.
This debate can often get tied up in aesthetics and what we want our high street to be: “What sort of shops do we want?” Actually, the issue with the shops that are associated with crime, be they vape shops, mini-marts, barbers or nail salons, is not that they are kind of aesthetically non-ideal, or that we want different sorts of shops on our high street; it is that there is criminality associated with them. It is about the crime that is going on.
The Government have made a welcome change to closure orders, with the length of time increasing to 12 months—that is a great first step—and they have hinted that they are looking at new powers. One of the core recommendations in our report was for a much stronger closure order power to tackle crime when it occurs in those shops. As we found, fewer than one in 10 are closed, so there needs to be a stronger tool for the police and trading standards to use to shut down those shops when crime occurs.
We have said that part of that should be an instant closure order, which 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 significant delays. We have said that trading standards and the police should have a tool, similar to the article 31 prohibition orders that the fire service has, to allow for the instant shutting down of those shops, obviously with a route of appeal where that is necessary. We need to make sure that those shops can be closed much more quickly, and reduce the burden of evidence; when the law is broken on more than one occasion, that should warrant the use of those powers for a certain period. That new closure power, which the Government have hinted at looking at, is really needed and is what we are recommending in our conversations with them.
Q3 Sarah Smith: This is such an important issue, certainly in Accrington and across Hyndburn. Josh, I think there is also a recommendation in your report for an independent review of HMRC’s methodology for estimating the illicit tobacco market. HMRC’s duty gap estimate and UCL’s survey of smokers are reporting illicit purchasing differently, so what further evidence would help policymakers to understand the scale of illicit trade and its impact on high streets and legitimate retailers, to build that evidence base for the sorts of steps that you are proposing?
Josh Nicholson: That is a great question. HMRC would say that there is huge uncertainty around its estimates of the scale of the illicit market, which is a massive problem when we are trying to understand how this issue is affecting the sale of illicit tobacco and vapes on the high street. If we cannot even estimate the true scale of the market, that is a real problem. That was behind our recommendation for HMRC to commit to a revision of its methodology.
For example, other estimates have indicated that about one in three cigarettes smoked in the UK are illicit. That is a very different estimate. UCL has done its own analysis on this as well, and it has quite different estimates from HMRC. It is therefore really important that HMRC commits to a revision of, or a consultation on revising, its methodology. There are other ways of trying to estimate the scale of the illicit tobacco market, such as through empty-pack surveys, which is what some in the industry do, to estimate what is going on. That is absolutely an important part of the process of us understanding what is going on on the high street.
Q4 Chair: As you know, the Government have announced they are looking to do a consultation on that. There have been quite a number of reviews over the years. What specifically would you like to see from the Government on that?
Josh Nicholson: Stronger closure order powers are absolutely necessary to tackle that problem. We need to see the consultation on licensing for tobacco and vape shops brought forward. Obviously, the planning changes are welcome in 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 conduit for enforcement. If you are selling illicit tobacco, violating your licence or selling without a licence at all, it gives local authority teams a much easier way of enforcing the law. If you are selling without a licence or in breach of your licence on repeated occasions, that should warrant the closure of your premises. It should lead to prosecution for those offenders who are not engaging with enforcement. That will be a crucial part of the arsenal available to police and trading standards.
That consultation has been announced, and we are expecting it in the new year. We have said that it needs to be brought forward much more urgently, before the year is out, because that will be the crucial way of increasing enforcement capabilities to ensure that shops are abiding by the law and to tackle those rogue retailers.
Q5 Chair: That is really helpful. Just so that I understand that better, do you feel that enforcement would help shift the dial on perception and trust, to help improve the high street?
Josh Nicholson: Absolutely. The core issue that we are seeing on the high street is that the public simply do not trust that there are consequences for crime. That is reflected in the data on this issue of illicit trade. Increasing the powers available to enforcement agencies is vital. That means stronger closure orders and robust licensing for tobacco and vape retailers. We have outlined a range of other measures, for example, stronger penalties to tackle landlords where they are complicit in making money from criminal activity.
Lord Bichard: Perhaps I could just pick up some of the things that Josh has been talking about, because I agree with nearly all of it, and pick up Sarah Smith’s point about data. There is enough data already for people to realise that we have a serious problem here. At the end of the day, you can only go so far with data. At the end of the day, it is down to policy will, and certainly in trading standards we would like to see a bit more of that.
The problem on the ground that we see is that a lot of people think what is happening is quite low-level crime, but it is not. It is increasingly linked to organised crime, child exploitation, money laundering and immigration. I could go on. One of the things that we want to do, and that the Government could do more of to help us, is bring home to people that when they buy illicit tobacco they are actually funding child abuse. Not many people—I am not being flippant; I have a history around child abuse—would want to fund that. The way in which we communicate that should not be about “This tobacco may not be safe” or “You’re funding dodgy providers,” but about where that money is going.
The reality is not understood. That is the first point I would make. In terms of the changes, I completely agree with closure orders. Closure orders need someone to have a good look at them again, because they were brought in under antisocial and disorderly conduct, and what we are worried about is crime. You cannot even get a closure notice if it is just about crime; you have to show that it is disorderly conduct or some antisocial behaviour, and that is ridiculous. The Government need to get on to that sooner rather than later.
The practical side of crime on the high street does not seem to be fully understood. By that, I mean there is no real action we can take against landlords. There are a lot of landlords out there who do not look very closely at who they are letting premises to, and unless there is some accountability for that, they will carry on doing that. People do not seem to understand the issue of multiple premises. With help, we can shut down a shop for a time, but that owner probably has two or three other shops and they will just move the stuff to those two or three other shops. We need closure orders that take account of multiple premises and of the fact that a lot of shopkeepers now stock their goods off premises. If you raid a place, you get a small amount. Most of the stock is in a car somewhere down the road—I kid you not—or in some other premises that is leased by someone who does not appear to have any connection with the people who own the shop.
There does not seem to be a practical understanding of how this criminal behaviour works, and you need that if you are going to make successful legislation. I am afraid it is the same old story with Whitehall, and sometimes with Westminster, that policymakers tend not to have a sufficient connection to the people on the ground. I will leave it at that for the moment.
Q6 Andrew Cooper: Welcome, Jim, and thank you for joining us this morning. You have been running quite a long investigation through London Centric about phoenixing 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. Many people assume that dodgy shops are a front for money laundering. What did your investigation find?
Jim Waterson: London Centric is focused on the capital, but I think it is relevant to people whether they are in Accrington, Hertfordshire or Cheshire, like you. We set out to go, “These dubious gift shops—these Harry Potter shops, these royal souvenir shops—all over central London are in some of the most expensive retail properties in the world. These places have six-figure rents. What is going on?” Like most people, we thought, “This must be money laundering. No one with any taste or decency would be spending money in there.” Then we went in and found something else. We found that a lot of people were spending money in there. So what is actually going on here? What is the trick?
The more time we spent looking at it, we kept finding tax evasion. It came back time and time again to the fact that if you do not pay VAT or corporation tax and 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. If you have a much more profitable business, you can pay a higher rent than someone who is paying their taxes. It comes back to this time and time again. In every single example we looked at, we kept finding this. The reason these shops are springing up everywhere is that bad pushes out good.
I really 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 they have largely realised, particularly post-pandemic, that paying tax as a high-street enterprise is optional. Once you get over that mental hurdle, you have the ability to repeatedly phoenix your company and discard previous limited companies. There is a ready supply of patsy directors willing to sign the paperwork for a few hundred quid. 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 £15,000 a month for this unit”, and someone who wants to pay their taxes says, “If I pay my taxes, there’s no way I could pay more than £10,000 a month in rent”, they are going to go with the person who pays £15,000 a month. It is just the way the world works at the moment and the incentives that they respond to.
Q7 Andrew Cooper: So you would argue that these shops are reducing the number of voids on the high street, which is supporting higher rents and squeezing out legitimate operators.
Jim Waterson: Absolutely. Could I talk the Committee through an example? The landlord of one of the biggest gift shops in the UK, which is right at Piccadilly Circus, 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 shop 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. Then every few months that company is discarded in favour 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 overseeing maybe millions of pounds a year in revenue. They are often students in overcrowded accommodation, or people who have just arrived in the UK and are in a vulnerable position; 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. I get the feeling that these people aren’t the ones who are actually in control of the business.
Q8 Andrew Cooper: Often you hear as a solution to this problem that we need to beef up directors’ duties and there needs to be real jeopardy if you get caught. But that is not going to be a solution if you are just finding an impoverished student and putting them up as a patsy to run the business.
Jim Waterson: The unfortunate truth is that I think if I walked out of here with 200 quid in cash and went up to enough people, I could find someone to set up a new limited company in their name and pass all the ID checks by the end of this.
Q9 Andrew Cooper: I know your investigation was centred on London, but are you aware of how widespread phoenixing is across England? And what is your remedy to stop it?
Jim Waterson: For phoenixing as a whole, because it is hard to break down what is a high-street issue and what is to do with phoenixing in other forms such as construction or whatnot, HMRC’s latest figures show at least around £1 billion in 2022-23 was being lost to phoenixing, and that might have gone up in more recent years.
I just see it time and again. When a unit has had three or four tenants who have all not paid their taxes in the last year or two, you can see that there is a problem here.
Landlords are not responsible. Quite understandably, they do not need to exercise any legal checks on who they are renting these things to at the moment. That is what is creating the problem.
Q10 Andrew Cooper: 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. It highlighted that HMRC and the Insolvency Service should be working together. Should it be one of those bodies or should it be another body entirely? What is your view?
Jim Waterson: When I talk to these dodgy shop owners, the one group that they really fear is HMRC. HMRC has the power and the ability to really dig into it, and that is what they are really scared of. If I talk to the operators, they say trading standards—it’s the cost of doing business; the council can’t really do much because the patsy director takes the blame. HMRC and its 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.
Sue Nelson: I would not want to comment necessarily on the phoenixing side. I would back up what was said in relation to the licensing of tobacco and vapes. We are very keen to see that regime come in and be implemented in a sensible manner. We have fed into that process.
Q11 Chair: I want to go back to what Jim said—that HMRC is underfunded and does not have the staff. Do you know whether work has been done to see how many staff they would require to be able to deliver on this?
Jim Waterson: There is an interesting debate here. In terms of the total tax take, this might not be the biggest thing in HMRC’s remit. Dan Tomlinson, the Treasury Minister who briefly had responsibility for HMRC, did a lot of work on saying, “This matters in terms of the tax morale of the nation, that you are being seen to do this; even if it isn’t in financial terms your biggest priority, it is undermining confidence in the entire system.” I have talked to people and there does seem to be a sea change there.
But, fundamentally, a decade and a bit of austerity has undermined the ability to have people on the ground who just go, day by day. If I was anyone on this Committee, the first call I would make would be phoning up HMRC and saying, “Can you come to my local high street with me and have a go?”
Q12 Chris Curtis: You talk about the scale of HMRC. My understanding is that HMRC, if it goes into these buildings, does not have the same power as the police do to investigate. Is that correct? Is there anything we need to look at changing there?
Josh Nicholson: One stat that has been around for a while is that there are over 100 different bodies responsible for tackling organised crime in the UK, so we have an incredibly fragmented system. I remember going out with trading standards in one area. They had a multi-team day of action, which is great—all the agencies coming together—but I couldn’t help thinking, “This is incredibly inefficient.” It is why national police service reforms are incredibly important. They are crucial and we have recommended in our report that the Home Office follows through with those reforms.
Reforming our police is important. We have also recommended a broader review into the way that trading standards is structured. We feel that a more national enforcement body and approach would have a better joined-up way of tackling this issue. Bringing together those bodies is a broader issue that we need to be looking at as well.
Q13 Mr Mohindra: Just before I ask my question, I should say that Warner Bros is in my constituency, and so Harry Potter world as well. If those shops are properly licensed, we are fully supportive of the global brand that is “Harry Potter”.
Lord Bichard, on trading standards, the Department has said that 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? Could you also tie in with the previous comments about how many different agencies are involved. What would you like to see and who needs to be leading the charge on sorting this out?
Lord Bichard: Trading standards are leading the charge on vapes and illicit tobacco, but we are not leading the charge on nail bars and things that are the responsibility of environmental health. How much more money do we need? I do not like going along to Committees such as this and saying that we need more money—it is not my instinct. However, trading standards have been starved and starved and starved of resources, to the point where one London borough last year had no trading standards officers—none at all. I am not going to tell you to give us a few more million and that it will be all right; we need a serious investment of resources in trading standards.
Coming back to Mr Cooper’s question, there is no one body that is going to resolve this problem, whatever you do. On Pride in Place, I was the instigator of “place” as a concept. I think that we need to have greater focus on places, and we need more working between agencies in a place to solve this problem. I say that having started my career doing prosecutions for trading standards. I am a very old man. One of the things that I learned from doing prosecution for trading standards was how important local intelligence, network, knowledge and contacts are. You know why that shop has suddenly become vacant. You also know where that owner’s other premises are and can work with others to take some action. If you set up a national trading standards organisation, you lose that.
I chair the 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, regional and national level. National trading standards deals with the big prosecutions that local authorities can no longer cope with because they take up to eight years. I am kidding you not—we have recently taken eight years on a prosecution because professional enablers, as they are now called, find ways of making sure that these cases go on and on and on.
I warned Josh I was going to disagree with him when we were sitting outside, but with great respect to him, I do not think national trading standards is the answer. You have got to maintain local knowledge and intelligence and couple it with quite unusual arrangements for Government, because we all like to have something that is centralised and we all like to have structural change. However, structural change very rarely delivers you anything. That is why I would defend what we have at the moment.
Q14 Mr Mohindra: Do you think that the current model is working?
Lord Bichard: It 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 they have a big case, we will fund them to take that case to fruition, but if it takes eight years, they would not be able to do it on their own. I think that it is working and we have had some huge successes recently.
I did not think that I would get towards the end of my career and judge my success on the length of sentences, but I have. We had a case of a rogue builder a couple of weeks ago where eight people got a combined sentence of 67 years. The courts are beginning to take it seriously, but the courts do not have resources either. They have never seen high streets—retail trading standards cases—as the priority. 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. However, please do not blame the people who are struggling on the ground to deliver what I think you want: a more attractive high street where people are not put off because when they go to the high street they meet pretty unattractive characters. I do not know if that answers your question.
Q15 Mr Mohindra: You have spoken about the money side of it. What about the powers?
Lord Bichard: Yes, the powers—absolutely. I agree with Josh. The closure order power is a case study. If you go for a closure notice because you know there is criminal activity on that premise, you are probably not going to get it. If you get it, it works for 72 hours, and then you have to go for a closure order. If you go for a closure order, it is not long enough at the moment, so that needs to be extended.
County councils cannot go for closure orders; it is only district councils and the police. Post local government reorganisation—if we ever are post local government reorganisation—that may not be a big issue, but most of us think that is going to be another three or four years, so in the meantime we would like county councils to have those powers. I know that might be controversial. I used to run a county council. Sorry—before you point it out, I was chief executive of a county council, which is different from running it.
There are things that you can do with closure orders and with landlords. There are all sorts of things that we could do to give more powers to the people who know what is happening on the ground. Sometimes, they get very frustrated that it seems to take so long to get legislation on to the statute book to deal with this problem. I think that is partly because people do not realise the crimes that we are talking about here.
Q16 Chris Curtis: To change tack a bit and think about planning powers, the Government have singled out vape and betting shops in recent policy announcements. I will come to Josh first, because you sort of touched on this in your first answer. Do you think that those are the right outlets to target, and why?
Josh Nicholson: They are, to the extent that criminality is associated with them. We know from polling of trading standards officers that, in some areas, over half of vape shops and minimarts are thought to be linked to organised crime groups, which is an astonishing stat. We are perhaps not making a mistake, but emphasising the wrong issue, when we talk about the aesthetics of a shop, be it a vape shop or a minimart, and think, “I just don’t want another vape shop or minimart.”
For us, the real problem is not the aesthetics. The planning powers are good but limited, in that they focus on allowing certain shops to set up, or they provide greater control over what shops set up, whereas the real issue, as Lord Bichard said, is the crime associated with these premises. We have to focus on tackling the criminality, which goes much deeper than illicit trade.
We have spoken about the resourcing of the criminal justice system and local authorities. Those things will take years to remedy, but there are powers that we can bring in in the immediate term. Planning powers are absolutely part of the equation, but we need really robust closure orders that allow for the instantaneous shutting down of these shops, on the spot. We should make it a police priority too. We should bring the police into this, alongside trading standards, so that we can do this quickly. We should mobilise all that resource, with stronger closure powers, tobacco and vapes licensing, and much more robust penalties for landlords. One of the things that we have considered is making landlords who have been warned about criminality but have taken no action liable for unpaid business rates. You can talk about broader reform of the business rates system, but in the short term that is something that we can consider doing.
Absolutely, vape shops and minimarts are the right retailers to go after, to the extent that criminality is associated with them. More broadly, we need to be focusing the conversation on the crime, rather than on the aesthetics of the high street, even though that is important too.
Q17 Chris Curtis: Let me take that on to the next stage. This is the interesting question. You have a Government talking about freeing up the planning process more broadly, but on high streets they want to be far more interventionist. That is probably where most of Parliament and political will is. Jumping back to first principles for a second, let us say that in a hypothetical world you have solved the criminality problem, and Jim’s tax avoidance problems are also solved with a new beefed-up HMRC. In that universe, do you think we should still be talking about more control over what goes on a local high street, through the planning process or any other process, or would you be fine letting the free market make those decisions?
Josh Nicholson: That is a great question, and that is why we have chosen to emphasise in our research the role of licensing for control rather than the planning process, because it works well when you allow the planning process to be as free as possible so that high streets can change and evolve over time. That is really crucial.
It is also why we have outlined in our report successful examples of where design codes have been used to de-risk development, for retail to residential conversion and for shopfront design codes, and how we could use a much stronger brownfield passport, as the Government have hinted at, to fast-track development. Using local development orders is one mechanism to increase and incentivise development on the high street and remove the hurdles that are often are in place for developers.
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 while making sure that there is robust enforcement where we need it. That is why tobacco and vapes licensing for those retailers is crucial, because it would make sure that every retailer that is selling those products is required to have a licence, and the enforcement would therefore become much easier when you notice someone violating that or trading without one.
Q18 Mr Mohindra: As someone who introduced the Essex design guide, I totally agree with your point about making each high street different. The point I was going to make is about betting shops. Do you think it is unfair for the Government to single them out?
Josh Nicholson: This comes back to my point about emphasising the aesthetic of the high street and tackling the issue of vape shops and mini-marts through that lens—betting shops are included within that—rather than focusing on the underlying criminality. Obviously, betting shops are very different entities from criminal high street businesses, as we have referred to them—often seen in the form of minimarts or vape shops. We might not like betting shops, but they are not necessarily run by organised crime, and the organised criminal element absolutely has to be the priority.
That is why 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 preferrable for there to be a vacancy in the short term than to tolerate organised crime on the high street, because that is what we are tolerating at the moment. We know this crime goes much deeper. We have spoken to charities that are supporting families whose kids are being exploited by the criminals running these shops and being given vapes that are laced with Spice and other forms of drugs. It is not just a few dodgy cigarettes being sold; this is much deeper organised crime, as Lord Bichard has pointed out.
Lord Bichard: A third of people in this country say they are putting off going to high streets because of what is happening on them—criminal behaviour and some of the shops that are there.
Mr Mohindra: As a former retailer, I get it.
Lord Bichard: Absolutely.
Q19 Lewis Cocking: Josh, I did not really understand your point about design codes and all the rest of it, because I do not think they go far enough. I think the Government are right to look at the planning system, because when I think about my high streets in Broxbourne, Cheshunt, Waltham Cross and Hoddesdon, they are all market towns, and people do not necessarily get annoyed with one vape shop, nail bar, Turkish barber or minimart; they get annoyed when it is like the town is taken over overnight. Suddenly you go from having none to having five vape shops all in the same market town, and you walk past them or all the barbers and there is no one in there, so you think, “How can they be making money?” I understand the organised crime part of that, but surely a quick solution to it is giving the council powers. Everyone thinks the council has powers anyway, and people moan to me, “Why has the council let another one of these open? We’ve already got four or five of them.” Let the council have powers under the use classes to basically say, “We’ve had enough of that. We’re not having anymore of that. We need X or Y in the town centre.”
Josh Nicholson: We would welcome what the Government are doing on that, because we feel like that power for local authorities is welcome, but my point is that it is not the only power that is needed. Having the ability not just to stop the shops setting up, but to shut shops down quickly and prosecute when crime is taking place is crucial.
When we think about that and how we reopen the high street, one of the other things we have looked at is how the Government might, for example, strengthen the high street rental auctions. For example, if a shop has been shut down for criminal purposes, if we want to see extended closure orders, why do we not 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 premise. There are creative ways we can use existing policy to tackle some of the secondary effects if we were to see a stronger closure enforcement regime, but those planning changes are absolutely welcome.
Q20 Lewis Cocking: I have a quick follow-up on crime. The Government are obviously taxing high street businesses more; they reduced their business rates relief from 75% to 40%, and they made it more costly to employ someone through the increase to employers’ national insurance. They have made it harder for legitimate businesses that pay their taxes to make money. Has that had a consequence on crime on the high street through all these other places that are doing organised crime?
Jim Waterson: From my experience, it comes back to the fact that the cost of running a high street business is now very high, and therefore the rents that landlords expect cannot be supported via a lot of legal means. The landlord in a fair market would accept a lower rent, but those rents are being kept high because, if you take the option of phoenixing multiple limited companies to opt out of taxes altogether, you can maintain that old rent level. Really, a lot of this is landlords not being willing to accept that the high street rent levels need to fall for legitimate businesses, rather than the criminals walking into the gap and saying, “We’ll still make that monthly payment.”
Q21 Chair: I want to explore that a bit further. Do you have data that demonstrates the impact of the policy changes?
Jim Waterson: Which bit? Do you mean the impact of the increased taxes?
Chair: The changes to the businesses.
Jim Waterson: In the tradition of local journalism, it is largely about going out, knocking on doors and talking to the people running the shops. They say that a landlord might be known to have an offer for a unit, but then mysteriously someone who has a newly formed limited company and a track record of phoenixing could get it instead, and the word on the street is that they would have paid so much more for it. Quite often, it also comes down to the fact that it would not be written down in a contract.
Chair: So a lot of it comes down to people’s perception of the impacts of the changes that mean businesses are being taxed more.
Jim Waterson: A weird side effect of trying to revive the high street by relaxing planning rules is that it has made it easier for almost anything to move in. Maybe six or seven years ago, we would have been hearing this panel complain about empty units, but now we are complaining about 10 vape shops in a row.
Sue Nelson: The Institute of Licensing’s position very much supports planning as a place-maker, and we would tend to agree that restricting the number of types of premises is probably a planning matter. When it comes to place management, though, that is when licensing, trading standards, environmental health and the police should all really be working together.
We have some very clear views on what the licensing regime for vape shops needs to look and feel like, bearing in mind the experience of other licensing regimes, such as the alcohol and entertainment licensing regime. If you look at vape shops, once that licensing regime comes in, you have clear management over those premises. It always exists for alcohol and gambling. There are some other areas at the moment where we are still waiting for legislative reform, such as beauty and aesthetics, which in due course may or may not address things like the barber shops and the nail salons.
The point is that, once that management regime is in place through licensing, as has been mentioned, there are more sanctions and avenues to achieve compliance and well-run premises. That is what we want to see: well-run premises that are compliant and obviously not involved in organised crime or illicit activity. That requires all the agencies working together, as I said, including licensing, trading standards, environmental health and the police, once planning has set the scene.
Q22 Chris Curtis: Josh, you mentioned high street rental auctions, and you talked about some of the relaxing. Are these powers currently being used very often, and if not, why not? What should we be doing to make sure that they are used more?
Josh Nicholson: That is a great question. I do not think they are being used at the moment to the extent that any local authority or Member of Parliament would perhaps want. I hear a lot of frustration that they are difficult to get off the ground, and part of that is local authority resourcing and capacity to better use them, obviously working through the legal system.
For example, in the past we had the high streets taskforce, which worked really well to build capacity within local authorities. That was a team based in MHCLG that would build capacity within local authorities and give them a helping hand to better use new powers and consider new strategies for regeneration. Something like that could definitely be beneficial within the high street strategy, to build that capacity within local authorities so that we can use these powers more. They would definitely have a positive role to play in bringing empty shops back into use and, as we have recommended, tying that to a stronger closure regime so that we can bring back shut-down premises. No one wants to see closed-down premises on the high street, but there absolutely needs to be more resourcing and capacity within local authorities for them to take off.
Q23 Mr Forster: Sue, what measures should the Government consider as part of their upcoming consultation on a new licensing scheme, particularly for tobacco and vape retailers?
Sue Nelson: We certainly recommended a modelling of the tobacco and vapes licensing on alcohol and entertainment, but there are some key lessons that have been learned along the way. One of those that I would bring your attention to is the need for a national database. If you are licensing people and premises, we need a regime where personal licences are trackable, traceable and renewed, or some facility to ensure that that licence is still in use. For example, under the Licensing Act, personal licences that have been issued since 2005 remain live, and we have no idea if those individuals who hold the licences are using them or are even still with us.
There are some key lessons there, but fundamentally, the Licensing Act 2003 works well. It has that system for those premises and personal licences, and it brings in all 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 licence 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 is no requirement for it to be crime and antisocial behaviour, as was mentioned earlier, for example. That licence is then pulled back into the local authority with options on conditioning, suspending, revoking—all those things. That is what we recommend.
Q24 Ashley Dalton: We touched a little earlier on the place concept and Pride in Place. The Prime Minister said that he wants to improve high streets to make them the symbols of British renaissance. Is that vision achievable if, in some situations, economic conditions show or at least suggest that only unwanted businesses are viable?
Jim Waterson: Without sounding like a broke 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; secondly, landlords need to take responsibility and accept that the market rents they want are no longer sustainable. 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, you are going to have problems.
Lord Bichard: I know the Prime Minister is very committed to devolution and to place, and that has to be the only route to the answer. I am sorry, but Westminster and Whitehall are not the solution to the British high street. Sue was saying just a moment ago that a lot of this has to be around people locally sharing intelligence and taking action, particularly through licensing on the basis of that intelligence. I throw in that it is 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. Intelligence is a resource. It is as important a resource as money when you are dealing with this issue, and we have to have a situation where everyone is sharing their intelligence and using that to make decisions.
I suspect this is the last time—you will be pleased—that I have a chance to speak; can I make two points that have not been covered at all, which you might want to come back to? We have talked about phoenixing—yes, but a lot of the problems that we have are not through companies. They are not set up as companies, so nothing you do about directors and the rest of it will have an impact in Gloucester, Cheltenham or where I live, because a lot of the people we are worried about are not companies anyway. You need to get beyond the London phoenix issue—sorry, Jim.
The other point, which we will not have a chance to touch on at all, is ports and borders, where an awful lot of this material is coming into the country. Last year, I spent a morning at Dover, and I was shocked at just how easy it is to get through the controls at Dover. The local authorities and the trading standards people are not involved in the governance of what is going on there and it is hit and miss, so at some time in your inquiry, someone ought to talk to you about ports and borders and whether we need a more co-ordinated approach there.
Josh Nicholson: Quickly on your question about how we drive community renewal in places where there are lots of issues of disadvantage and shops that are associated with crime, which we know congregate in those areas, there are really positive examples of change that is being driven locally. At the CSJ, we work with about 950 grassroots charities across the country, and there are some amazing case studies that I would recommend looking at.
Back on the Map in Sunderland is a small charity that has basically bought up half the high street—they had a high street full of vacant shops, and it took ownership of some of the premises and worked with the landlords to get those deals through. It then worked with the community to reopen four or five different shops on the high street and made them viable. That is a locally driven, grassroots thing that came out of the new deal for communities in the 2000s, and it is a great model for how Pride in Place and, for example, capital investment and capacity building in small grassroots charities can drive renewal on the high street.
Giroscope in Hull is another fantastic example of buying community assets and driving regeneration locally. There are some fantastic examples of areas that have perhaps been challenged historically by issues of disadvantage or low income and have been able to see real change through mobilising the amazing small and medium charities that are working across the country.
Q25 Ashley Dalton: That sounds really exciting. That leads on to something else I was going to ask, which is to what extent Pride in Place can have an impact in this. I think you covered that, but I would be happy if anyone else wanted to come in on it. Do you think that those neighbourhood and Pride in Place boards are involving the right people to make those strategic decisions about regeneration, who can command community support and that real change in our high streets?
Josh Nicholson: It is a really interesting question. I spoke to some of the charities we work with before this about Pride in Place. They see it as an amazing opportunity, but they are also worried that perhaps there could be too much local authority control, or that devolution out of local government to the grassroots, voluntary or third-sector organisations is not being realised as much as it could be. For example, could we see some of the funds from Pride in Place being delivered through the neighbourhood boards as well as some of the small or medium charities that have experience organising capital schemes, or could they act in a consultative role? How do we push out more power and resources from the local authority to the neighbourhood boards and grassroots organisations that know what initiatives work, and what will help their people and drive change in their community? There is lots that we can be ambitious for in that sense.
Lord Bichard: The situation across the country is different in different places. I talked about the problems with Whitehall and Westminster, which I could go on about 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 have not, but if we are serious about devolution and place, then all the statutory agencies need to change the way in which they operate. They need to collaborate better among themselves and be confident enough to devolve more power locally.
Q26 Sarah Smith: This has been such a useful and interesting session. We talked about the need for greater enforcement but also the barriers and challenges with that enforcement being possible. Is there anything more the Government could do to address the economic incentives that sustain illicit trade that has not already been spoken about and that you would add before we close?
Jim Waterson: Lord Bichard said that the issue, whether it is phoenixing through companies or individuals trading, is that you can shed the prosecutions and the attempts to make people pay their taxes and you can walk away from your debts. The fact that British enforcement in this area tends to rely on a person being a good chap who follows the law rather than actually coming down hard on them is a key part of this, and I keep coming back to the idea that the Al Capone approach to prosecuting these people is the simplest and most available one to us.
Chair: Thank you for coming to speak to us. You have given us a lot to think about, particularly in terms of enforcement powers. Sue talked about a national licensing database. I will certainly look at some of the suggestions you have raised, particularly where there is good work being done elsewhere, because we can see how that has worked and how it could be replicated when it varies from area to area. Thank you for your time. We will be in touch with some follow-up questions about the work we are doing on this.
Witnesses: Dr Marina Murphy, Nindi Dhanjal and Andrew Goodacre.
Chair: We are now going to start panel two. You have had an opportunity to hear what we discussed in panel one. Could you introduce yourselves, so we all know who you are?
Andrew Goodacre: I am Andrew Goodacre. I am the chief executive of the British Independent Retailers Association.
Dr Murphy: I am Marina Murphy. I am here in my capacity as director of the UK Vaping Industry Association.
Nindi Dhanjal: I am Nindi Dhanjal. It is my first time before the Committee. I am here representing GBG, and I actually work for Game Nation.
Chair: That’s good—it is my first time as Chair.
Q27 Mr Forster: Good morning. In my constituency of Woking, not far from Parliament, I hear from constituents each time a new vape, barber or betting shop opens. The reaction is, “Oh, not another one.” What would you say to my constituents when they use that wording? What would you say to them when they see good, viable businesses closing in this cost of living crisis, but unwanted shops such as vape, barber and betting shops somehow coping and thriving?
Dr Murphy: Obviously, I would caution against saying that every vape shop is unwanted. Vapes are not a niche product; they are actually a very mainstream product, with 10% of the adult population vaping. Vapes have been shown to be the most effective and widely used smoking quit aid in the UK. They have also been shown scientifically to be at least twice as effective as NRTs in helping people to give up cigarettes. Clearly, vape shops have a viable consumer and public health function to play.
The other thing I would say is that a shop that sells vapes is not necessarily a vape shop. There are a lot of shops that sell vapes that should not be selling vapes, in my view. I live in Streatham. When I walk down the very long High Road, I see shops that sell, for example, reconditioned mobile phones plus vapes, or shampoo and hair extensions plus vapes. I would question whether that is the appropriate place to sell an age-gated product.
On the other hand, it is important to make the distinction between generalists and shops that sell anything to anybody, including vapes, and specialist vape shops that operate on a completely different model. A lot of them actually age gate on the door, so you cannot go into the shop unless you have demonstrated that you are over 18. Oftentimes, the people who work in those shops are trained in exactly the same way as stop-smoking service professionals. They must have recycling take-back facilities. They must be WEEE compliant, or they should be. They should also be very conscious of fire safety, for example, because they are selling products with batteries.
The other important thing is that, if you look at the briefing materials produced by the NCSCT, which is the National College for Smoking Cessation Training, you will see that it very clearly, proactively, recommends to stop-smoking professionals in the UK that they work collaboratively with their local vape shop. It does not mean the convenience corner store that sells vapes in addition to other things. It means very specifically the specialist vape shops that operate in a responsible way and take their obligations seriously. There is confusion about what a shop that sells vapes is versus a vape shop. The licensing scheme, which we have been talking about, will be key in that regard. We could build in those definitions of what a vape shop actually is and, potentially, the potential freedoms for generalists versus specialists.
I would also say that we at the UKVIA think it should be very difficult to get a licence to sell vapes. People should be able to demonstrate that they are doing all those things—that they are age verifying properly, have the processes in place, understand that they are selling something that is a potential fire risk, train their staff, and are able to spend time with consumers and smokers who want to give up smoking and to advise them properly.
Andrew Goodacre: When you see a high street develop and change, it is often driven by demand—well, normally we say by demand. People demand having a fruit and veg store, a butcher’s, a baker’s or whatever the case may be, and the demand supports those businesses. What we are seeing is almost the reverse of that, in a way, in that the vape shops—notwithstanding what Marina has just been saying—the barber’s, the sweet and candy shops and those other shops that suddenly appear are not about demand; they are business-model driven, because their business model means that they can make it work on a high street. With an empty unit, they can take over and do that. The previous panel explained the reasons for that, and often that is due to illegitimate businesses.
I understand your constituents’ concerns. You see this changing, but the property owners do not have much regard for who is renting the property; they just want their rent and they do not really care about the place and what that is doing to the place. They hope that the businesses taking on the property are legitimate, but too often these days they are not fully legitimate, and that is causing a problem. Such businesses tend to masquerade behind what could be a vape shop, a barber’s, a candy store or a Harry Potter store—it could be all sorts of things. Looking ahead, the danger might be that if the Government say, “We are going to target vape shops”, the criminals will just change the nature of the shop. They will dispose of the vapes and say, “Okay, we will sell sweets.”
Nindi Dhanjal: I am glad that the previous group did not put betting shops and adult gaming centres into the same category as criminal or criminally organised organisations. I think that classing us as unwanted business is not fair. We are a lawful, heavily regulated business that requires an operating licence for the business itself, as well as personal licence holders and DBS checks for senior managers. I am DBS-checked and hold a personal management licence. Licences are issued by the local authorities and planning permission is required. People cannot just rock up on to a high street without going through those hurdles—checks and measures are already in place. I understand that some of your constituents may not want a particular mix on a high street, but some of your constituents are also our customers, and those who want betting shops want betting shops—there is a demand for them.
Q28 Sarah Smith: Marina, you said that we can expect age-gating at the door and a trained person inside a vape shop being able to talk to people about smoking cessation, but you were quite vague about the statistics of how frequently that is actually happening. I do not know the full number off the top of my head, but there are plenty of vape shops across Accrington, Rishton and Great Harwood in my constituency. If I were to go around them tomorrow, to knock on all the doors, in how many of them 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? Secondly, based on the fact that most are advertising directly to children—that is what I see in the windows of the vape shops popping up across my constituency—what would you suggest? At this point, we are defending the industry, instead of exploring how vapes are—alongside smoking—only available from a regulated, non-advertised cabinet behind the counter, and not promoted directly to children and adults alike.
Dr Murphy: Again, I think you are confusing shops that sell vapes with vape shops, which is the distinction I was trying to make. If you walk down the high road, I would say that there are actually very few vape shops. What I—what we in the business—consider to be a vape shop is a shop that makes between 90% and 100% of its revenue from selling non-combustible nicotine products.
Q29 Sarah Smith: And you can reassure me that if I walked into those shops, at every door, I would be age-gated and have a trained person to talk me through smoking cessation.
Dr Murphy: I cannot speak to every single vape shop in the country, but that is the model that we understand and promote in the UKVIA. For example, VPZ and Evapo definitely work on those models, and they work very closely with their local authorities, stop smoking services and smokers in their community who want to—
Q30 Sarah Smith: Do you know what percentage of those businesses are actually utilising those recommendations and that approach?
Dr Murphy: I cannot say right now, but I am sure we can get back to you. What I can tell you is that when trading standards did some mystery shopping last year, about 23% of shops on the high road failed when they were challenged with age verification. We absolutely agree that this is a massive problem, and the UKVIA want strong action to be taken against those people. That is why, for many years, our organisation has pushed for the licensing scheme. We think not only retailers but distributors and importers should be licensed, so that it is a completely closed system.
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. We would ask why it should not be £10,000. Our members are compliant; it does not matter to us how high you make the fine because they should not be breaking the rule. Somebody talked about alcohol licensing earlier. As far as I understand it, if you have two alcohol offences in consecutive months, you can be fined £10,000 and you can have your licence suspended. Why not do that with cigarettes and vapes as well?
Like I said, there should be a really high bar to get a licence to sell vapes. We support that. That is what we want, because we think it will help to eliminate a lot of these bad actors. There is 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. We absolutely agree that they are there and they need to be dealt with severely, which is why we think the licensing regime is key, as well as potentially planning.
If you go down the road of wanting a quota for vape shops, do you want to license a vape shop that is a vape shop or do you want to license a convenience store that also sells vapes? 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. If you consider a shop that sells vapes to be a vape shop, that is like considering a petrol forecourt that sells cigarettes to be a tobacconist. They are not the same thing and they are dealt with differently. You can go into a tobacconist as an adult and see the products that you want to buy because you have made the decision to go there. You are going to buy that product, versus somebody who accidentally encounters it in the supermarket. That is why there is a legitimate argument for having display restrictions in those environments.
Andrew Goodacre: To build on that, Marina is right that licensing as we have for alcohol would be appropriate for vapes if we have real concerns about how they are being used and by whom. Yes, they reduce smoking but we are not quite sure about the damage that vapes might be doing, so licensing would be appropriate.
Generally speaking, I am not a fan of licensing. One of the reasons against it is the unintended consequence of trying distribution in a different channel, and in this case, that channel could be online. The very same products that you are doing well to sell responsibly in responsible shops, behind counters and in cabinets, are just displayed online in any way, shape or form they want to. If we are going to take action against this kind of retailing, we have to address the potential online escape route and make sure that online businesses are equally as responsible as anyone else in that respect.
Q31 Chris Curtis: Marina, you gave a compelling case for licensing, which the Government is looking at. What is your position on marketing? Even if you have legitimate vape shops that are doing all the things you talk about, how would you feel about them still whacking massive shiny signs on their front advertising vapes that, as Andrew just said, people are then going to buy online?
Dr Murphy: There are two things there: marketing and online. I will talk about marketing first. There is obviously, again, a legitimate case for controls on display, branding and things like that, but the knee-jerk reaction is, oftentimes, to confuse visibility with access. Think about what the problem is that we are trying to solve here. In addition to all the other things around criminality, with vapes in particular people are quite concerned about youth access. I think that is the big issue, but visibility and access are not the same thing. Again, it comes back to enforcement. I would argue that it does not matter if there is a yellow sign on the window if, when you go into that shop, that person is doing what they are supposed to do and obeying the law.
Q32 Chris Curtis: Sure, but the only argument you gave for the existence of those vape shops in the first place is that they are good at getting people off cigarettes, right? Fine, there is some health evidence behind that, I think—Ashley can talk to that. You also said there is demand for it, and that 10% of people vape. We now have a million people vaping in this country who have never smoked, we think, based on the latest stats. I would argue that we are increasingly getting many people who vape but who have never smoked, and who are not using it as a stop-smoking aid, because companies are getting pretty good at marketing vapes and whacking those shiny signs on the front of shops, so the marketing clearly is a problem in and of itself, right?
Dr Murphy: I can go back to the marketing but in the scientific record there is, so far, evidence that humans have used nicotine for 1,300 years. That evidence is impressive, given that tobacco disintegrates, so humans have used nicotine probably throughout the history of humanity and people will probably always use nicotine—or at least some people will. I am sure everybody would like to think that in an ideal world nobody would use nicotine, but let us look at alcohol. Some 80% of adults in the UK drink alcohol, and 75% to 80% of people drink coffee. Obviously I do not think there is anything wrong with drinking coffee but some people think, “Well, that’s caffeine; that’s also a plant alkaloid.” In the real world we have to accept that some people may always want to use nicotine. 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 it in products that they actually want to use.
Q33 Chris Curtis: But they can still have access to it without blaring, big, shiny signs out the front of shops talking about it, right? That is why I am pushing on the marketing point. All the other points you have made are compelling enough, but surely there is no point you have made that does not also lead to the conclusion that we should probably stop marketing on our high streets for vapes.
Dr Murphy: Like I said, there is obvious need for controls. None of us want garish shops—that is for sure—but they are age-gated products. I know I am like a broken record, going back to access, but I think that access is really—
Q34 Chris Curtis: Hold on access. Everyone gets the access point. Even if we solve all those problems, you are 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 have this marketing problem.
Dr Murphy: If you look at smoking and vaping in this country now vapers outnumber smokers, which I think is a public health win. Like I said, if you accept that people are people—
Chris Curtis: It is a win only up until the point you are not creating new vapers, who we are seeing increasing numbers of.
Dr Murphy: They are probably would-be smokers. If you think about—
Chris Curtis: There are a million people who are vaping who have never smoked—that is a lot.
Dr Murphy: Correct, but there are 3.5 million of the 5.5 million vapers who are ex-smokers. Also, adults will do what adults will do.
Q35 Chair: The concerns I have are about children as well. They are being drawn to vaping. Increasingly I see that within my constituency. From a marketing point of view, what could be done differently to make sure that children are not drawn into vaping, particularly from a very young age, because we see the negative impact that has?
Dr Murphy: Like I say, I think that the knee-jerk reaction is to confuse visibility with access and to always, when regulating, go for the product. What I would say is that in the last couple of years the burden of compliance is getting harder. The compliant industry is absorbing all this burden of compliance. In the meantime, that is not going to make non-compliant people any more compliant. I do not think the answer to rules being broken is to create new rules, and I think the most important rule here is that you should not sell these products to somebody who is under 18. If you cannot enforce that rule, and people are already breaking that rule, making new rules will not work. That is why I think properly resourced enforcement is vital, in addition to the licensing scheme.
If we have a licensing scheme and we have licensing fees, I think we should ringfence those fees to support trading standards. 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 trading standards, and if you look at food, for example, there is a statutory requirement—it is a three-year inspection cycle. There is nothing like that for vapes. If you look at the way things are working at the moment, you will be inspected probably every 11 years.
Q36 Chair: I just want to go back on that point, because from what you are saying it is down to enforcement and stronger licensing to deter this. Has the Vaping Industry Association also done some work to see how they could help, particularly as you are seeing an increase in the vaping industry as Chris has mentioned—we have seen the stats. In terms of how you can change the way that vaping businesses are operating, particularly in terms of what I said earlier on the negative impact on children, what reflection has your organisation done in that space?
Dr Murphy: We do test purchasing of our members, to assess their age verification processes. That is one thing we do. Another thing we do is we have built a reporting mechanism into our websites, so that people can report shops, we say dodgy shops, that are selling to underage people. We have had to date 1,500 complaints made, which I think is quite a big number. We work very closely with trading standards, and we have done for years, and we provide that information to the Chartered Trading Standards Institute which then provides that to their regional teams, so the teams go can out hopefully, if they have the resource to deal with those problems.
Q37 Chair: Just to understand this better: so you have reported the test in age verification to trading standards?
Dr Murphy: We test our members every year and we do a report.
Q38 Chair: How is the testing done?
Dr Murphy: We commission external companies to do it.
Chair: Right. So they go to the premises, and—
Dr Murphy: They go the premises and they also test online.
Q39 Ashley Dalton: I just wanted to come in very briefly. The Tobacco and Vapes Act 2026, which I will declare I took through the House of Commons at Second Reading on behalf of the Government, does include a consultation on marketing and advertising, branding, flavours and marketing particularly at children. Dr Murphy, you touched on marketing a product. We have got people here talking about alcohol, we talk about gambling and tobacco. As products, all three are addictive, but not everybody that gambles is addicted to it, and not everybody who drinks alcohol is addicted, but almost everybody that consumes tobacco is addicted to nicotine. Almost everybody that consumes nicotine, whether that it in a tobacco product or a vape, is addicted.
So would you accept that when we are talking about marketing, we are not talking about marketing a product? You are talking about marketing an addiction, which often leads to people having to work extremely hard to relieve themselves of that, and to get to not needing that product anymore. That is why it makes sense that vapes are marketed and sold specifically as smoking cessation tools, rather than nicotine products for people to enjoy.
Dr Murphy: First off, smoking is addictive, but nicotine is dependence forming and it very much depends on how it is delivered. There are scientific scales of addiction, and there has been a lot of work looking at relative addiction between cigarettes, e-cigarettes, nicotine pouches and NRTs, for example. NRTs are less dependence forming than cigarette smoking is addictive. Having said that, these are age-gated products for adults.
Adults are adults and they can make decisions for themselves, and that is recognised in the alcohol industry. Alcohol is clearly visible to everybody—you go into Tesco and there are rows and rows of shelves of alcohol. It comes in colourful packaging. They even use cartoons on cans. What they seem to do well—and it works well—in the alcohol industry is to age-gate at the point of sale. The success there—
Q40 Chair: I am going to have to stop you there because I think we have covered some of those points already.
Q41 Chris Curtis: I will skip most of my questions because I am conscious of time, and follow up on betting shops, because we have covered vaping quite extensively. Everyone agrees it is a key priority to get rid of all the problems that are preventing the free market from existing on our high streets, as was covered with the previous panel.
The next problem, even if you solve all those problems, is that you still have shops that create negative externalities, such as addiction problems and other things that we have talked about. There is a view broadly accepted by everyone that there are at least some negative externalities caused by betting and gaming shops.
What responsibility do you think councils should have in regulating those kinds of shops on the high street? Would you welcome some clarity from the Government on how planning law will be used?
Nindi Dhanjal: I think that the clarities are already there. Local authorities have extensive powers, especially under planning and licensing. We are sui generis already; I know the Government said they want to clarify that, but we do sit in sui generis, which means “of its own kind.” Everything we do has to be accompanied by an application. We no longer have permitted rights. Back in the day, we could go to banks, estate agents, restaurants, but now we have to make a fresh application. It is scrutinised at the planning stage by the local authority.
Some local authorities already write policies into their local development plan that control where we can open. Tower Hamlets is a good example. Its plan establishes that betting shops and adult gaming centres can open only in specified locations. It also states that they will be resisted where there is an overconcentration—you talked about clustering—or where they are near a school or where the proposal would harm the character of a location.
Local authorities already have those powers. I have picked Tower Hamlets, but there are others, such as Knowsley council, Westminster, Manchester. Councils throughout the land adopt these local policies that mean that we cannot just rock up anywhere and you won’t have clustering because it is not allowed under the planning regime.
As a secondary protection, you have licensing, which upholds the three licensing objectives. The vape industry could learn a lot from the model that we are regulated under because it is really robust. It controls where we can advertise. It insists on age-gating and testing on a regular basis. I apologise if I am teaching you to suck eggs, but we have to protect the vulnerable and ensure that we are not associated with crime and disorder and that our policies are fair and open.
One thing that is often overlooked is that local authorities, members of the public and responsible authorities can ask to review a premises. If a premises is licensed and people have a concern, there is a safety mechanism that allows those premises to be reviewed, and they can be closed if it is found that we are not 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. That will be heard in front of a committee, and they can revoke the licence and close us down.
Q42 Ashley Dalton: On the gambling issue, you have covered clustering and explained that local authorities can make those decisions. To what extent does the gambling industry consider the concentration of existing venues when making planning applications?
Nindi Dhanjal: We take a commercial view. Like any business, we take a commercial view first and then we look at planning policy. If it says we cannot be in this location, it is a waste of time, so we won’t look. Ultimately, we want thriving town centres as well. We will only go in if we think there is a demand for our product.
Q43 Ashley Dalton: That leads quite neatly to my next question. You go into places because there is a demand for your product. Why are betting shops 10 times more likely to be found in deprived areas than in affluent areas?
Nindi Dhanjal: I am not sure that is true because we have shops in Westminster, in Victoria.
Q44 Ashley Dalton: You have them there, but it does not mean that they are not more likely to be in areas of significant economic and social deprivation.
Nindi Dhanjal: I think it comes down to demand. We look at footfall and what is in the available location, and at who operates there already and whether we can offer something new. If we do not offer something new, we do not invest in a location. We spend upwards of £300,000 refurbishing a shop that has potentially been vacant for many years, so we look to invest in those locations. And who are we to say who can enjoy that pastime?
Q45 Ashley Dalton: I think we are leading into health questions there, which I will stay off. On 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, particularly considering that the NPPF includes a presumption in favour of sustainable development?
Nindi Dhanjal: It is hard for me to say because we don’t know what the proposal is to replace it. I will probably sit on the fence a little bit because I do not know what is going to happen. Our members think that the 2003 Licensing Act works quite well, which does not have an “aim to permit”. I will read it if that is okay: “A licensing authority must carry out its functions under this Act… with a view to promoting the licensing objectives.” Then we will have, in our case, the three licensing objectives. That is probably a workable solution. Again, that is my opinion. I do not know what the Government are thinking.
Q46 Chair: I just want 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 are high rates of deprivation. There is data from the University of Bristol that supports this. You said you look at the data in terms of where there is the need. It links into some of the stuff that we discussed earlier about marketing and who is targeted. Do you actually look at the stats in terms of the deprivation levels?
Nindi Dhanjal: We have to risk assess that. Every new licence has to be accompanied by a local area risk assessment, which we call LARAs. We have to assess the local area profile so that we can mitigate that. If there are high levels of crime, we will consult the police and say, “Look, what additional measures can we deploy?” It could be external CCTV, maglocks on the door, or open-shop frontages, depending on our consultation with the police. We do look at areas of deprivation, because we have to; we take that issue into consideration.
Q47 Chair: If that is the case, and if you are doing risk analysis and looking at deprivation outcomes, how is it that there is data that shows that that is where there is a higher proportion of these types of shops?
Nindi Dhanjal: Again, it comes back to demand; that is where people want to gamble.
Chair: Okay.
Nindi Dhanjal: And it is spread. I mean, it is easy to focus on that, but people then do not tend to focus on other areas where we have shops, such as Mayfair and Westminster—
Q48 Chair: It just feels to me as if it is a strategic way of thinking, because it is targeted at certain areas where there are high levels of deprivation and people who are vulnerable. To me, that is very concerning.
Nindi Dhanjal: Does it makes sense to open a business where there is not demand and where there is not money?
Chair: Okay. On to the next question.
Q49 Sarah Smith: Very briefly, because I think there has been a lot of focus on this, do you want to say a little bit about the Bibob Act in the Netherlands? There have been suggestions from Minister McDougall that that is something that the Government here are looking at, particularly its approach to screening potential business owners in this space.
Also, is there anything more that any of the panel want to say about further policy changes that the Government should consider to combat the tax non-compliance on our high streets, which sounds like such an important issue if we are going to get equality of access for legitimate businesses to be able to function and thrive on our high streets?
Andrew Goodacre: I am not aware of that Act, as such; it’s to do with health, I guess. I will pick up on the tax aspect, though, because it is not just that illegal businesses do not pay their due taxes or pay staff the national living wage, and all those other aspects. It is the fact that, alongside those things, the costs of running a legitimate business are now so high and simply continue to rise.
I think that revitalisation of any high street, and what the Prime Minister has mentioned about wanting to make them a sign of our recovery, is very laudable, but we need proper action to bring that about. We need to seriously ask ourselves how we can allow new businesses, new entrepreneurs and young people to come with a great idea into the retail world—into the high street world, not necessarily to be retail. It could be a café, or a great food offering, or something like that. However, until we allow those businesses to establish themselves properly and give themselves a chance to make some money—invariably, these people are not looking to be millionaires; often, they are doing it because it is something that they are really passionate about—we will always have those problems.
The illegitimate traders have seen this opportunity and are saying, “Why don’t we take up the space and provide stock that has either been stolen from those other shops trading properly”—just to add insult to injury—“or bring in cheap products from the far east, which are duty-free, often avoid VAT, and are often unsafe, and sell to the public that way?”
The previous panel covered really well the multi-agency approach or stakeholder approach. I was with the Met police last week, who are doing a big push this week on dodgy shops, but it is multi-agency; it is fire, health and safety, trading standards, and police. That way, you will find some way of closing down these shops, so that really helps. However, if you close a shop down and it becomes empty, you have to encourage people to take it up. You want a good business to take it up, not a dodgy one.
Q50 Sarah Smith: Are there any specific things that you think are needed to create that incentive, as well as tackling the illicit illegal businesses and the fact that rents are being pushed up right now by them? Are there any particular incentives to ensure that legitimate businesses are also coming through?
Andrew Goodacre: Further reform of the business rates aspect, I guess. With business rates, you start paying from day one, and these businesses might be new and might need to establish themselves. Maybe there should be some kind of a holiday period—a longer-term holiday period—for a business to establish itself and to make its mark in its chosen marketplace.
I guess start-up grants are available, but it is often a complicated process to apply for them, and people are often averse to doing that. We could simplify that process and enable people to have access that way. There are grants available at local authorities centrally. There is a more considered way of bringing those businesses into the high street. Given the chance, people will work very hard to succeed; we are just making that chance so much smaller through existing policies.
Q51 Sarah Smith: Thank you. Dr Murphy, do you want to briefly say something?
Dr Murphy: It is worth considering the Bibob Act, especially in the context of licensing. Other things are happening, such as closure orders being extended and more money going into preventing criminal activity on the high street, but that is, necessarily, after the fact. Something has already happened; the horse has bolted, so to say. The Bibob Act is prevention led and, as you said, has integrity screening.
A lot of the powers exist already, but to Andrew’s point, they are spread across agencies. What the Dutch do well is bringing together information from lots of different functions. They also have a wider scope. Whereas we may look at the applicant, they look at the applicant’s entire business environment: shareholders, other business partners, other companies that they may be involved with and so on.
Importantly, they also do not have to prove that there has been criminal activity or that there will be; they are empowered to make a decision just based on the information they have. We would need to legislate for the pre-emptive nature of something like Bibob, but I imagine it would not necessarily involve inventing new Departments. It may require a thin layer of co-ordination whereby we use all the powers that already exist and all the information that is already there.
Andrew Goodacre: It also comes back to that issue of how you bring the landlords into this constructive debate. They own the properties. I understand why they do not want to own an empty property. We are landlords in our own business; we own office property that we rent out. I do not even have to check whether they can legitimately be in the UK. If I employ someone, I have to check that, but I do not have to check anyone in that respect. I just need someone who is going to sign the lease.
I do not do that; I show a degree of due diligence. I want to see the company accounts for that business; I want to know what its background is and what its projections are. Landlords can do far more due diligence and not just take the biggest bidder who comes along, which happens too often. We have to bring the landlord population—corporate and small—into this whole debate about avoiding the criminals getting hold of the property. That may well bring down the rents, which will allow new businesses to come in as well.
Q52 Andrew Cooper: In the somewhat limited time that we have, I would like to turn to business rates—a small topic, I am sure you will agree. It is fair to say that the business rates regime in this country is quite complicated. It has been through several changes in recent years in terms of the number of multipliers and what we offer relief on, and further changes have been proposed by the Government around different types of businesses. In your view, what impact have the recent changes to business rates had on different types of high street businesses? Andrew, I will come to you first.
Andrew Goodacre: Unfortunately, it is largely negative. I welcome that, since coming to power in 2024, the Government have talked about transforming and improving business rates. But effectively, they have tinkered around the edges, and we end up with unintended consequences.
For example, this year in a large retail park near where I live a large supermarket has seen its rateable value increase, but because of the changes to the system it will pay £70,000 less in business rates for each of the next three years. That is fantastic for that supermarket, and it may well keep food prices down—we hope so. But every other shop around it—the independent retail let in Coventry’s high street—will be paying at least 15% more in business rates.
The idea of transforming business rates where larger businesses paid a bit more and smaller businesses paid less just has not happened in real terms. We cannot change that until the Treasury—we have a new Chancellor—decides to revisit business rates and say, “Whatever we did didn’t really work because we haven’t helped small businesses.” Next year, another 25% increase is baked in. After that, there is another bigger increase coming in. Meanwhile, that big store on that retail park will pay £70,000 less each year for the next three years. High street shops have seen their rent increase by 12% on average compared with retail parks at 4%. With a system that delivers that kind of result, you can see why shops on the high street are finding it increasingly difficult to make their business model work and leaving it. Customers will end up on retail parks where the parking is free, where the choice is and where the big brands are, and you are ending up with a more challenging situation on high streets.
Q53 Andrew Cooper: The Government have said that they are reviewing relief for businesses that do not, in their view, make a positive contribution to communities. We can agree or disagree on 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?
Andrew Goodacre: That is an interesting one. You have to be careful in how you define social contribution. When I talk to our members in small places around the UK, lots of them will tell me how they sponsor the local football team or some other local charity. That is social contribution within that area, and presumably they would qualify for that. We may think about vape shops as not offering social contribution, but a vape shop may well sponsor the local football team as well. There is that challenge all the way around.
Q54 Andrew Cooper: Sure, but we do not allow individuals to make philanthropic contributions and then say, “I therefore do not need to pay my income tax.” It is not for a business to make that choice.
Andrew Goodacre: No, I am not saying that, but it is about this definition of social contribution, isn’t it? I do not know what is really meant by it. I understand what people are trying to aim at. Is it right that what is perceived to be a negative business on the high street pays more, or do we offer more relief to the business that is seen as more positive? That is challenging.
You talk about density of business. When I first started eight to 10 years ago with this association, everyone was complaining about the density of charity shops. “Not another charity shop!” was the phrase. That is why it is difficult to differentiate in that way: the unintended consequences may deter. I would rather we saw lower business rates for all businesses, to be honest.
Q55 Andrew Cooper: The Labour party made a manifesto commitment at the general election to replace business rates. What, in your view, should a replacement look like?
Andrew Goodacre: I am not sure you need to do too much. People talk about a property tax. The landlords would pay it, but that will probably increase rents. The last time that I felt that small retailers and small businesses on high streets were comfortable with business rates was back in 2024, with the last of the 75% discounts. That cost the Treasury £2.5 billion; it was deemed to be too much. The current relief is £900 million; I would argue that that is too little. There should be somewhere in between.
I would argue that if we took steps to avoid VAT fraud on online sales, which the Government have consulted on and will hopefully bring in, that could be worth £1 billion if they keep it tight and do not allow too many carve-outs.
We could also address duty-free low-value items. Anything below £135 does not pay duty and often does not pay VAT either. A billion products come in under that scope, and not all of them are properly checked at the ports. If we close that sooner than in October 2028, which is the current schedule, I think it would generate £5 billion or £6 billion in extra income. That could be used to support high streets and get back to that 75% discount quite easily.
There are ways of reducing business rates by using funding, by being smarter and by evening up the competition between cheap imports and what is sold on high streets. Do not forget that for everything that is sold online the money goes out of the economy, not into it.
Q56 Chris Curtis: I have a very specific point on that. Imagine if there were an economist sitting at the other end of the panel. The entire premise of what we have been arguing about is, broadly, that the person who will rent the shop is the person who can pay the most. If you cut the taxes uniformly across the shops, there will still be somebody who can pay a bit more in rent. Most economists would agree that if you cut business rates, most of that is just going to get captured by increased rents. Why do you think that they are wrong and that this would suddenly be a big boon to shops?
Andrew Goodacre: Actually, I do not think that they are wrong. I think that elements of that have occurred, which is why, in the last rateable revaluation, high street rents went up by 10% or 12%, compared with about 4% or 5% for retail parks. And yet all the demand is in retail parks; all the big retailers want to be in retail parks. Why the difference? I think it is because big retail negotiates better, so it can push the landlords down a bit more. On the high street, the smaller guys do not have the weight and strength to do that.
I do think that some of the rates rebate has ended up in rents. We need to find a mechanism for avoiding that happening—absolutely. I am not a fan of rent caps. I think that removing upwards-only rents would help. Tightening up landlord responsibilities, in terms of how they find and recruit tenants, would also help. But I understand the economist argument that if you are not careful, that money can end up in rents—absolutely.
Q57 Chris Curtis: I see why you are saying this, because you represent people and they see a big bill from the Government, which frustrates them, and they do not seem to have the same relationship with landlords. It just feels as though, if we see the policy solution as being business rates, we are not going to end up in a much better place. It is not going to save our high streets. We need to work out how to solve that.
Andrew Goodacre: It is a fair point and I would not disagree, and yet I would argue that when we had the higher discount there were fewer closures. For a start, rents did not go up by 75%; that was not happening. Some of it does leak into that, but not all of it.
Chris Curtis: Not in the long term either, probably.
Andrew Goodacre: I am not sure. I would argue that before we had business rates, rents were not that much higher. Business rates were brought in in 1991; I am not sure what the situation with rents was then.
Just tweaking one business lever will not revitalise high streets. It cannot be about business rates alone. The biggest cost for businesses is the cost of employment, which has rocketed in the last few years; you also have supply chain inflation, which is really difficult to deal with, and energy costs, which for a small café or restaurant on the high street have just escalated beyond reason. It is not just a business rates issue. There has to be a way of challenging all the overheads and asking, “What can we do differently and smarter?”, knowing that customers are at a point where they are not willing to pay that much more.
Chair: Thank you for coming to speak to us. It is good to know a bit more about the work that you are doing and to hear about some of your age verification work and the categorisation of criminal organisations, which you raised.
The business rates thing lives on, because when I speak to various businesses and stakeholders they all have different perceptions. You are saying that lower business rates would help the sector, but there is obviously a challenge in terms of whether the high costs would be impacted. You talked about taxing online companies as well. We are looking at this in detail and will be in touch if we have any further questions. Thank you for your time.