The Minister of State for Business and Enterprise, Rt Hon Mark Prisk, came recently to Leicester and in his address to the Leicester Asian Business Association he talked at some length about his government’s concern and support for small businesses in Britain. In outlining the government’s policy, he assured his audience that the government was fully committed to promoting small businesses, especially in terms of getting banks to lend money to them.
After this, I had an opportunity of talking to him and I raised the issue of the problems facing small businesses especially in places like Leicester. I drew his attention to the fact that many small businesses were closing down, not simply because they could not raise enough finance in loans but because they were not able to face competition from the ever expanding encroachment by superstores. Not content with continuing to expand the range of their services across the business sector, they had begun to open shops in the towns and cities, thereby competing directly with the established small businesses who were unable to survive their onslaught. The result in Leicester is that many prime shopping areas like Belgrave Road, Melton Road, Narborough Road, Granby Street, Belvoir Street etc, where renting business premises was at a premium for many years, are now lying vacant. Mark Prisk agreed with me and promised that his department will look into this issue seriously.
It is also true to a large extent that the banks are not willing to provide adequate loan facilities for small businesses, despite all government assurances and pronouncements. The banks have taken a practical business view on these small businesses, as they have seen a continued slide in their profits and feasibility. Indeed, why should banks want to lend money to a sector of business which is seen to be weakening every day and risk losing their money?
Apart from the financial crisis which we have been undergoing for over two years now, one of the biggest factors in driving business away from the inner city in Leicester has been the totally misguided and bad policy of the local authority. The local authority has embarked on a restrictive programme of parking in the business areas of the city by introducing parking meters, parking fines, speed cameras and all kinds of other restrictions which are not conducive at all to shoppers visiting these areas. In their unbridled greed to raise revenue, the local authorities have been using spurious arguments in trying to convince the motorists that this is all designed to promote road safety and tackle environmental issues. In this they seem to have been supported by the local Chamber of Commerce, who believe that the money raised through parking meters and fines are being deployed for road safety improvements. It is no wonder that many businesses in the high street areas have disappeared altogether. Even a place like Leicester market, which for years was the hub of thriving business activity, is now suffering hugely because of parking restrictions and costs around that area.
However, in order to stem this haemorrhage of small businesses, the most effective way would be to stop giving planning permission to the opening of more and more shopping operations to big stores in the high street and residential areas. This would give some chance to small businesses to stand on their feet and perhaps if they become strong enough they could attract the money from the banks to expand their businesses. This should be followed by a systematic drive to remove parking meters and oppressive parking restrictions, which would encourage the establishment of more small businesses in the areas and would bring customers to the inner city. Unless these measures are taken soon enough, it would be too late to reverse the downwards spiral.