Where do all these American sweets come from? The problem is that we don’t know | adam hug

OWalk down Britain’s most famous shopping street and you’ll see bright, welcoming emporiums of Americana, piled high with rainbow-colored sweets and vape pens. Dotted between them you’ll see identikit gift shops selling keychains and model double-decker buses. Oxford Street has at least 30 of these candy shops at last count, with some even located in prime locations.

Everyone understands that retail has been going through a very tough time during the pandemic, which has seen big names leave the country’s high streets. Even so, shoppers and tourists are puzzled. Why are there so many? Why do they often seem empty? Why are sweets sold at exorbitant prices?

The answer to the first question is the long-term decline of the high street due to online shopping, compounded by the short-term shock of closures during the pandemic. The increase in the number of empty units has created a headache for the free or emphyteutic owners of these buildings, who become liable for professional tariffs on empty stores. To avoid this, a number have leased their sites to an intermediary company (or set of companies) or managing agent, who in turn lease to other companies that operate souvenir or confectionery shops.

Any person moving into an empty store becomes liable for professional rates instead of the freehold owner or the emphyteutic. The problem is to establish who the occupier really is. When council officers visit American confectioneries, they frequently come across employees who pretend not to know who the owner is and point to a shell company license certificate on the wall. The board is tasked with trying to unravel a trail of false profession names or shell companies dissolving before we can take legal action for the professional rates due. When we find the occupier, we encounter fictitious transactions where the assets may have already disappeared.

While some stores are legitimate, others are being investigated by Westminster City Council for tax evasion and selling counterfeit goods. We are currently investigating unpaid commercial rates of £7.9m across 30 stores. It is taxpayers’ money – yours – that is misappropriated. Westminster is the country’s biggest commercial fares collector (£2.4billion a year), with the vast majority of the money redistributed across the country to other local authorities. Therefore, this loss of income affects all UK taxpayers, not just those in Westminster.

The ordinary customer often gets scammed too. Goods without prices are expensive at checkout. Children may find themselves shelling out £13 for a bag of pick’n’mix. Some of these stores are also outlets for suspected counterfeit and dangerous products. Over the past six months, Westminster City Council officers have recovered around £575,000 of these items in the candy and souvenir shops of Oxford Street.

To give you an example: we recently recovered over £100,000 worth of suspected counterfeit or unsafe items after raiding three shops in Oxford Street. In one store alone, we recovered over 2,000 suspected fake Willy Wonka bars. If that doesn’t sound like a big deal, consider the markup. The chocolate inside these bars is sometimes genuine – a supermarket’s own brand – rebadged in fake Willy Wonka wrapper. The initial cost of the chocolate is around 40 pence; the faux bass is priced between £9 and £10. In other cases, as the Food Standards Agency warns, chocolate can be dangerous. The transport is also suspected to include 3,000 vapes carrying excessive levels of nicotine; approximately 1,400 fake designer brand phone cases; 78 fake designer hoodies and a number of fake Apple earbuds; the list continues.

Our Trading Standards Officers are making life difficult for these rogue traders with their enforcement activity, but they cannot solve the problem alone. We are pressing the landowners of the buildings where these stores operate to consider whether a short-term scheme to hijack commercial rates serves the long-term future of Oxford Street. We know that many landowners want to work with us. however, so far there are those who either deny the problem or seem determined to obfuscate in the face of the board’s reasonable demands.

One important step the council is taking to halt the candy store’s relentless rise is to offer discounts to start-ups that will take up empty space. The West End pop-up scheme helps homeowners get a 70% discount in business rates where start-ups are allowed to use an empty store. Since May 2001, we’ve supported 38 emerging brands, ranging from a company that turned old kimonos into lampshades, to a lingerie company, to a company that produced recycled clothing.

We are working with central government and law enforcement partners to take action. But we also need new measures in the forthcoming Economic Crimes Act – such as changes to Companies House legislation – to make it easier to navigate the labyrinthine world of shell company structures. Government agencies need the power and the resources to investigate — and if necessary, take action — when similar businesses are repeatedly created and shut down by the same people. The end result must be to ensure that taxpayers’ money is not wasted, and that means understanding who is responsible in order to hold them to account.

It is hard to avoid the conclusion that many of these stores may simply be vehicles for a tax avoidance racket exploiting UK laws. I know other UK cities are similarly affected, and now seems like the time to take collective action.

At the end of the day, if consumers want to go to American candy stores and buy expensive goods, I can’t stop them. But what I will endeavor to do is to prevent customers and taxpayers from being taken in.

  • Councilor Adam Hug is the leader of Westminster City Council

  • Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 300 words to be considered for publication, email it to us at [email protected]