Labour vows to defend high street

A Labour government will give councils new powers to stop payday lenders and betting shops swamping high streets, Ed Miliband is due to pledge.

Businesses that do well out of hard times are springing up in place of shops, restaurants and banks but town halls are almost powerless to act, the party leader will warn.%VIRTUAL-SkimlinksPromo%
He will set out Labour proposals to change planning laws so councils could refuse permission for certain businesses, including payday lenders that "engulf" people in debt.

At the start of a three-day, 10-town tour to launch Labour's local election campaign, Mr Miliband will say: "Everyone here today knows how important our high streets are to towns and cities across Britain. They're not just the places we go to shop. They're the heart of our local communities. But today our high streets are changing -and often not for the better.

"Take an example. One of the fastest growing businesses on the high street are the payday lenders, sometimes charging extortionate rates of interest. In hard times, it is no wonder people turn to them. But often they just engulf people in debts that they cannot pay. Interest rates of over 1,000%.

"Too many councils are finding that they don't have the real power to stand up for local people. But that is what politics is supposed to be about: standing up for those without power and giving power to them. Currently if a bank branch closes down, there's nothing a council can do if a payday loan shop wants to move in and open up in the same place. Even if there's another lender next door. That can't be right."

The party plans to create an additional umbrella planning class that would let local authorities put some premises in a separate category. The move would allow councils to then block applications that meant a change of use for a property.

Mr Miliband will say that the new powers will effectively allow local people to decide what shops are allowed to open up and where. "This will be different in local areas, local solutions to local problems," he will add at the election launch in Ipswich. "But it means that when they want, the people in our towns and cities can say: 'No. Enough is enough'.

Citizens Advice chief executive Gillian Guy said: "It's frightening that more and more payday lenders are setting up shop on the high street. But the problem is much bigger online with the internet awash with websites promising to deliver a loan within minutes - prompting some councils and universities to ban access to payday loan websites from their computers.

"It is very easy to take out a payday loan but often extremely difficult to pay it back as debts spiral out of control. Predatory lenders are sending people into debt as they hand out loans to those who can't afford them and drain bank accounts to recoup loans, leaving no money left to buy food or pay to get to work. Payday lenders need to stop breaking the rules and stick to their pledge to treat people fairly."

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High Street casualties
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Labour vows to defend high street

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.

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