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Liz Twist (Blaydon) (Lab)
I beg to move,
That this House has considered the development of a retail strategy for the future.
It is an honour to serve under your chairmanship in this important debate, Sir David. Nearly a quarter of jobs in my constituency are in retail, so it is important to me that the retail sector is strong and vibrant. The fact that it provides 8,000 jobs, or 23% of the total—the highest in any constituency—is perhaps hardly surprising, given that Blaydon has Metrocentre, which is still the largest indoor shopping centre in the UK. However, there are also many local high streets in villages, towns and communities across my constituency, with small businesses that have to face huge challenges to survive, particularly given the closure of bank branches and the loss of footfall that that brings.
Mr Gregory Campbell (East Londonderry) (DUP)
I thank the hon. Lady for giving way so early in her speech. Does she agree that, with online banking, online retail and edge-of-town and out-of-town shopping, the high street has seen a radical transformation in the past few years, and not for good? We need a comprehensive strategy to save the high street in the next five to 10 years; otherwise, we will all be the worse, including future generations.
Liz Twist
I most certainly agree that we are seeing a radical transformation and that we need a vision for the future. Our strategy must do more than just deal with short-term problems; it must look at the longer term. That will the burden of my speech.
Since I became the Member of Parliament for Blaydon just over two years ago, it has been my sad lot to visit stores and talk to too many staff who face store closures, including at Toys R Us, Homebase and House of Fraser. Thankfully, some of those stores, such as the House of Fraser store in Metrocentre, have had a respite, but their future remains uncertain.
Faisal Rashid (Warrington South) (Lab)
I am happy my hon. Friend has secured this important debate, and I congratulate her on doing so; she is making an excellent case. Some 74,000 retail jobs were lost in 2018, and the town centre vacancy rate in April 2019 was 10.2%—the highest ever. Does she agree that the UK retail industry is in crisis and needs immediate, comprehensive and radical action?
Liz Twist
I most certainly agree that radical action is needed so that we can stop the situation teetering into crisis and think of a plan that will allow the sector to remain vibrant and become stronger. As my hon. Friend points out, there are some really challenging facts.
I have visited larger stores and talked to staff, but I know—because people tell me when I go on social media —that many other stores, which may be smaller or less high-profile, have had to give up the struggle, although I did not know about them until later, which is very sad. I am keen to do all I can to support the retail sector in my constituency.
Mike Amesbury (Weaver Vale) (Lab)
Part of the solution has to be business rates; that is what is fed back to me in my community. We have had grand talk and some baby steps forward from the Government, but is it not now time for radical reform to bring in investment and protect enterprise?
Liz Twist
Business rates certainly feature strongly in the study by the Housing, Communities and Local Government Committee, of which I was a member until recently, and in submissions to me by organisations such as the British Retail Consortium and by individual stores. We certainly need to look at that issue, which I will return to.
As I said, I have visited different places, and there are more closures that I do not know about. It is not just about jobs, although they are hugely important, and nor is it just about empty shops; it is about the impact on our local communities, especially those such as Blaydon that are made up of several smaller towns. Shops are such a central part of our high streets; from Crawcrook to Chopwell, from Birtley to Blaydon, and everywhere else in my constituency, they are a really important part of making our high streets vibrant.
A few weeks ago, I had the pleasure of visiting a shop in Birtley called High Street Quilting—a real Aladdin’s cave that stocks every imaginable thread, fabric, tool and design for quilters and embroiderers. People in one of the back rooms were getting guidance on developing their dressmaking and upholstery skills, and the shop was due the very next day to have an embroidery class, which was hugely well subscribed. Such shops create real variety and focus for our high street, but the owner told me about the difficulties she faces as a small business owner in making ends meet, even with the small business rates relief, and in ensuring that she can continue to employ people and move forward. We must not forget the small businesses when we talk about the bigger picture.
We face a changing external environment as a result of online shopping and of failures in strategy that have led to venture capital taking over stores, with scant regard for retail. The British Home Stores closures happened before my time as a Member of Parliament, but I know from talking on the doorstep to people who worked for BHS what a traumatic experience that was.
Nationally, retail employs 3 million people, with an additional 1.5 million jobs dependent on the success of the retail industry. Retail produces 11% of the UK’s economic output and approximately £7 billion in business rates, which is far higher than any other industry. It is the largest private sector employer in the UK and the second largest contributor of tax. The British Retail Consortium estimates that 74,000 retail jobs were lost in 2018, as my hon. Friend the Member for Warrington South (Faisal Rashid) noted. Sadly, that trend is expected to increase in future years. We should remember that the workforce are predominantly women, and many of their jobs are part-time, so the situation has a disproportionate effect on some of our constituents.
I am disappointed that the Government’s industrial strategy has so little to say about the retail sector. Given that 9% of jobs across the country are in retail, it is really disappointing to see the sector being given such scant focus.
Sir Mark Hendrick (Preston) (Lab/Co-op)
Like many hon. Members present, I have seen my main retail high street, Fishergate in Preston city centre, lose many top brands. They are being replaced by charity shops, betting shops, tattoo parlours and vaping shops. I recently met the leader of Preston City Council and impressed on him the need for a retail strategy in Preston. That needs to happen in councils up and down the country; as my hon. Friend points out, the Government are not going to do it for them. I really fear for the future of our towns and centres and for their ability to retain retail.
Liz Twist
Indeed. One of the Housing, Communities and Local Government Committee’s findings was that local authorities have an important part to play in ensuring the future of our high streets. I very much welcome my hon. Friend’s engagement with his local authority to ensure that it takes measures to improve what will be a changing high street, but a lively one.
Returning to the industrial strategy, I do not believe that retail has been given enough focus. I am aware that the Retail Sector Council has been set up, with representatives from the industry liaising with the Government, and that a number of workstreams have been drawn up and are already producing work. However, I fear that what we are doing in those workstreams is looking at the detail of current problems, rather than doing what we need to do, which is to produce a longer term strategy and vision to build and strengthen the retail sector, addressing the challenges we know about and those that may yet come, which we need to scan the horizon for.
There have been some examinations recently of the situation faced by high streets in particular—of course, high streets are one part of the retail sector, but not the whole part. I have already referred to the report by the Housing, Communities and Local Government Committee, which is called “High streets and town centres in 2030”. As we have heard today, many such reports have identified the current business rates system as a real problem and noted the huge disparity in costs between online businesses and shops, including the rents that shops pay. Clearly, that is not the only issue, but when many of us heard about the online tax in the Chancellor’s last Budget statement, we thought it would be a means of addressing this problem of the disparity between online businesses and physically present businesses and shops.
Faisal Rashid
Will my hon. Friend join me in urging the Government to heed the call by the Union of Shop, Distributive and Allied Workers to take urgent action to save our shops by implementing a comprehensive and co-ordinated industrial strategy for the sector?
Liz Twist
Yes, indeed. I was going on to say that I was really pleased that USDAW, the shop workers’ union, launched its industrial strategy for retail last month to a packed room. I was really impressed by the work that had gone into developing that strategy and by the outcomes it wants to achieve, which are presented under three helpful headings: “Economy and Community”, “People and Productivity” and “Changing Perceptions—Retail Jobs are Real Jobs”. Even in the opening speech of a debate, where I am not so restricted for time as other speakers might be, I do not have enough time to cover all the detail in those three areas of the report. However, I certainly commend it to the Minister, if she has not seen it already; she should look at it, because it has a wealth of positive points and positive ways forward.
What is USDAW calling for? Under the “Economy and Community” heading, it is calling, as others have, for a fundamental reform of business rates; a review of town/city centre parking charges and other transport issues; reform of the tax laws to ensure that companies pay their fair share of tax—for example, by preventing the avoidance of corporation tax—and to create more of a level playing field between online and bricks-and-mortar retailers, which I have already touched on; closing the pay gap between chief executive officers and the lowest paid workers; stronger corporate governance rules to curb asset stripping, which has been one of the issues the retail sector has faced; ensuring that business failure cannot be rewarded with excessive bonuses and pay-outs, as was the case with British Home Stores; and a review of the role and functions of the Competition and Markets Authority, in light of the increase in proposed mergers within the sector—USDAW is really encouraging us to consider the CMA’s role to see whether it reflects the changing retail environment.
Under the heading “People and Productivity”, USDAW is calling for a minimum pay rate of £10 per hour for all workers, irrespective of age; the introduction of legislation to tackle underemployment and insecure work by providing a minimum contract of 16 hours a week for those who want to work that long; contracts that reflect the actual hours that people work and not the hours on their paper contract, which are often exceeded; and legislation to ensure that workers have guaranteed seats on the boards of large companies, with the same duties and responsibilities as other directors, and with measures put in place to ensure that those in such seats reflect the gender breakdown of staff across the company.
The third area is “Changing Perceptions—Retail Jobs are Real Jobs”. That is something that is really close to my heart, having met so many shop workers over the years; in fact, my mum was a shop worker for many years, so it really is dear to my heart. USDAW is calling for an increased focus on retail across Government policy and decision-making mechanisms, to reflect the importance of the sector; promotion and recognition of the benefits of working in retail, to help to develop talent and increase retention levels, because retail offers employees greater flexibility than most sectors, and often allows them to work around their family/caring commitments or studies; and a challenge to the overt perception that women simply work in retail for “pin money”, or that retail is just a stopgap.
A key part of challenging those perceptions is the skills agenda, which means recognising that retail jobs are not just jobs that anyone can do. Dealing with customers day in, day out is a hugely important skill. First, it is a contribution to the social environment that all of us live in; indeed, for many people, it may be the only contact they have with another person. Also, it is a huge skill to deal politely and kindly with other people, and that needs to be recognised. However, further skills will also need to be developed in the future. As we have heard, retail is changing, and different skills are needed, for example in IT and other areas. Therefore, there needs to be some kind of clear path for career progression, to increase both productivity and job satisfaction. I was going off the USDAW script a bit there, but I feel very strongly about that.
I will return to the Government’s industrial strategy. I have already said it is lacking in detail, given the size and importance of the retail sector. The Retail Sector Council brings together Government and industry to
“seek to encourage growth and positive change in the sector as it adapts to rapidly changing consumer habits”.
The workstreams for the Retail Sector Council include business costs; skills and lifelong learning, which I have just touched on; the industrial strategy; employment; the circular economy, which I am told is the environment, wrapping and things such as that; and consumer protection. From the council’s website, I understand that its work will feed into the work of Government Departments, where appropriate, to contribute to and inspire initiatives that support the council’s objectives. It will work, for example, with the Ministry of Housing, Communities and Local Government around high streets and communities.
One thing I would stress, as members of the British Retail Consortium have already stressed, is the need for much greater co-ordination between Government Departments, to ensure that when a decision is made by one Department, the knock-on effects are not felt by another. The kind of petty example I refer to quite often is the need, when we talk about, and perhaps reform, business rates, to consider the impact on local government. We must seek to ensure that that longer-term issue is not just passed to someone else.
However, there are other issues to consider as well. Clearly, there are issues about benefits, and particularly in-work benefits, which will also affect the economy, as well as decisions by the Department for Environment, Food and Rural Affairs. We all know that it is complex to achieve such co-ordination, but it needs to happen. We also need a retail sector deal, to put retail on a par with other sectors that have already launched such initiatives. As I say, with 11% of the workforce in retail, we really need that deal.
I have a couple of specific things to ask of the Minister. The first is to urge her to look at USDAW’s industrial strategy for retail. It contains a huge amount of detail—I have just touched on some of it—and looks at the growth and development of the retail sector in the future. I very much hope that she and her officials will meet USDAW to go through its report, which is an important document, and will look at its proposals. Secondly, the Minister should look to establish a real vision for retail, not just by tackling known problems, but by developing a vision for the future and setting up a retail sector deal to give retail its due importance alongside other sectors.
Several hon. Members rose—
Sir David Crausby (in the Chair)
Order. There are six Members standing to speak. I want to call the Front-Bench spokespeople at 3.30 pm. If Members could keep contributions to around six minutes, everybody should be able to get in. I call John Howell.
John Howell (Henley) (Con)
It is a pleasure to serve under your chairmanship, Sir David. It is also a pleasure to follow the hon. Member for Blaydon (Liz Twist). She has highlighted the structural changes that are occurring in our high streets. She is right to point out that the retail sector employs a lot of people and is therefore extremely important. It is also fair to point out that rent and rates play their part.
I want to stress the structural changes, which the hon. Lady hinted at, and the move away from face-to-face to online shopping, which we are all doing. In those circumstances, a retail strategy is very difficult to bottom out. It is very difficult to come to a view on how an overall strategy should be managed, because the decline that is occurring takes place in different ways in different businesses. I will illustrate that in a moment.
I want to make some general points about things that might help. To start with, I welcome the future high streets fund. It is a much better way of facing the future, rather than harking back to the past and “how things always were”. If we look around the country, there are a number of different councils that are doing things in different ways. Great Yarmouth, for example, is developing cultural quarters as a way of encouraging businesses and people into the centre of town. It is all about the creation of place. Others, including Henley, see themselves more as events destinations; the Henley regatta has just finished. It is interesting to note that shopkeepers in Henley always have a difficult view on the regatta; they claim that when it is on, they lose business because young people are all tied up in the regatta and cannot go shopping.
Sir Mark Hendrick
I agree with the hon. Gentleman that city centres have to look at other offers as well as retail to help enliven them. Preston has tried to do that through leisure. Unfortunately, the major business interest that was driving the leisure offer has just gone bankrupt. On the future high streets fund, Preston, a city that is much in need, has just had its bid rejected. That is not good enough. These little pots of money are put there to act as sticking plaster for town centres.
John Howell
The future high streets fund is looking at how high streets can be transformed for the future, not harking back to how things were done in the past. It is looking at imaginative schemes to take things forward. Two things that the future high streets fund grants funding for are improving transport access to town centres, which is absolutely crucial—if people cannot get in and out, the town centre is likely to die—and increasing vehicle and pedestrian flows, which follows on from that. That is a major improvement for the functioning of our town centres.
I have two examples of different types of business that are handled in different ways. The first is pubs. The reduction in the number of pubs has been going on for a number of years, for many reasons—we all seem to want to reduce our alcohol consumption for health reasons; there are the changes in the law on smoking, although they have largely worked their way out; there is a case for saying that many pubs have not got over the recession and are still struggling; and there is also the pricing of alcohol, which means it is often much cheaper to drink at home than in the pub. Alongside that, however, employment in pubs and bars has remained quite steady, and has even increased slightly, which needs to be considered in parallel.
My second example is banks. The decline in banks has been going on for 30 years. It is even more significant now with the rise in online banking. I have probably not visited a bank in two or three years—I do all my banking online because it is much more convenient to do that.
My final point is about the integration of housing in the mix. It is important to try to get people to live in the centre of our towns again, so that there is a mix of retail and living accommodation. In my role as Government champion for neighbourhood planning, I will give an example. The town of Thame had about 700 houses earmarked in its neighbourhood plan. It deliberately chose to spread them around the outskirts of the city rather than to have a big development at one end of the town, which would have meant creating a new area and a new shopping area. The reason it spread that housing all round the town was to increase the flow into the centre of town. That is a very good example, which I would endorse, to everyone who is looking to sort out how their towns are organised for the future.
David Hanson (Delyn) (Lab)
I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on opening the debate this afternoon. I declare an interest as chair of the USDAW group of Members of Parliament and as a member of USDAW, the Union of Shop, Distributive and Allied Workers. I am particularly pleased to take part in this debate. It is very important to send a message to the Minister that we think that the retail sector is an important contributor to the UK economy. It employs millions of people and is key to the regeneration of our local towns and communities, and also key to the employment across the country of many people. Three million people are directly employed in retail; 1.5 million work in related activity that depends on the success of our high streets. Our high streets are the fabric of our communities and we need to look at what we can do to protect them.
My hon. Friend the Member for Blaydon and the hon. Member for Henley (John Howell) have raised some of the challenges on our high streets at the moment. Disposable income is falling for many people. There are real challenges in the economy as a whole, which means less money is spent locally. The issue of online sales is a particularly big challenge. I have bought things online, as everybody else in this House will have done. It is important to look at the context behind that and consider what that challenge poses.
Mr Jim Cunningham (Coventry South) (Lab)
It is not only the impact on the shopping centres; there are also the centres in the outlying districts where there is a major impact. Coming back to the point that the hon. Member for Henley made, a lot of banks and even cashpoints are closing down; banks are shedding a lot of labour these days and that has an impact on people in cities.
David Hanson
I agree wholeheartedly with my hon. Friend.
Disposable income is one of the big issues. Online sales are also a big issue. The cost of shops and rent and business rates is certainly another, as is the impact of out-of-town shopping, which employs many people in my constituency. Many of my constituents work at Cheshire Oaks in the constituency of my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), but that does not hide the fact that big, out-of-town shopping centres are dragging people away from smaller towns. In many towns, the loss of Government offices such as the local DWP office or the local post office and doctors’ and dentists’ surgeries stop the footfall going through towns, which presents a challenge.
This year, we have seen a 2.4% fall in the number of staff employed in the retail sector. That does not sound like a great deal, but 74,000 people who were employed at the beginning of the year are now not employed in the retail sector. Vacancy levels in town centres are now at 10%, the highest for four years. As my hon. Friend the Member for Blaydon mentioned, some big key employers in many of our areas are folding. I want the Government to recognise that shops are a generator of economic value, so we need to look at what we can do to support them. My hon. Friend mentioned the USDAW’s “Industrial Strategy for Retail”, a blueprint of ideas that are worth discussion. I hope the Minister will focus on some of those ideas, and see whether they are applicable to Government and the devolved Administrations.
I have a couple of points that I want to throw into the mix. First, we need to look at how we can support the maintenance of key drivers of footfall in town centres. That means the Government need to look at supporting post offices, Government businesses and doctors’ and dentists’ surgeries in town centres. They need to ensure that we have an offer in town centres that brings people in because, as has been said, town centres have to be places of destination as well as places of shopping. We can do that by anchoring key Government facilities in town centres and by adding value to town centres through local council and local government support. For example, we can improve the built environment and plant trees and bushes. If shops are empty, finding ways in which the local council and others can use exhibition and display space to bring people in to make them places of venture is particularly important.
Like the hon. Member for Henley, I want to see integrated issues on planning and look at whether we can find ways to bring houses as well as shops into town centres. When I was honoured to be a Minister in Northern Ireland, I oversaw a scheme whereby we used space above shops for single people and newly married couples to live, ensuring they could use the town centre while also filling empty premises.
The USDAW strategy suggests looking at the online shopping tax. Tesco’s chief executive has indicated he wants to look at the potential for a shop tax. An online tax might be a 1% or 2% levy on online transactions, which could help to balance the initiative towards people buying in retail. I do not want to put the cost up for consumers, but it is worthy of consideration.
My hon. Friend the Member for Blaydon mentioned car parking and transport links, which are extremely important, as is the issue of business rates. In my part of the world in Wales, we have a small business rate relief scheme that provides rate relief for businesses up to £6,000 of rateable value with 100% relief, and we have a high street relief scheme that supplies £23.6 million of rate relief for shops in town centres. That helps anchor and keep businesses in those town centres.
Finally, I will give some examples. In Holywell in my constituency, we recently lost all of the banks bar one, but, with the help of a company called Square, we had some potential in the town centre, where we enabled people to use machines for online transactions. That was provided free by Square to help support retailers in the town. We have had support through a range of activities, festivals, theatre and art groups trying to bring footfall into the towns. All of that is part of a retail strategy. It requires not just the shops but local councils, Government and private sector organisations trying to support a focus on retail, and not a drawing away from retail. I commend USDAW’s industrial strategy and recommend that the Minister look at some of the ideas. I look forward to her comments on things that have been raised today.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
It is a pleasure to serve under your chairmanship this afternoon, Sir David. I thank the hon. Member for Blaydon (Liz Twist) for securing this very important debate.
Any retail strategy for the future must focus on re-energising our town centres. I accept that the retail footprint will inevitably reduce with changing shopping trends and a changing retail landscape, but the challenge is to manage that change. Empty premises sadly prevail in towns throughout the UK. Online competition—in 2018, almost a fifth of all retail sales were online—crushing business rates and taxes, traffic management systems and parking charges, or a combination of the above, have influenced or played a part in the decline of high street retail.
Many accept, as I do, that there is a place for online shopping, and that is evidenced by the steady increase in internet transactions year on year. Online shopping can assist those with disabilities or who are housebound; others may simply be seeking to exercise their freedom of choice. In the not-too-distant future, our communities might be buzzing not with retail activity, but with drone deliveries of internet shopping. However, online shopping must co-exist with high street retail, and not be a replacement for it. The demise of high street shops could lead to further isolation for the elderly, not all of whom—I might include myself in this—are internet-comfortable when it comes to financial transactions, although I suspect going forward the situation will resolve itself.
On a positive note, eateries in Ayr, Carrick and Cumnock are a great success. It is an element of retail that is really successful. In our area and many areas throughout the UK, that sector uses locally produced goods. It is interesting to note that the towns and villages where shops appear to thrive are those where a variety of small, quality, niche retail businesses are intertwined, as has been mentioned, with the residences and professional offices that are integral to the retail provision, and where traffic management systems are minimal and parking charges are zero or at least reasonable. Sometimes there might be a smaller version of one of the larger well-known food retailers, acting as an anchor store and preventing the drift of custom. However, as residents and as a society, we need to stop and ask ourselves whether we could support high street retail, because we the citizens have a part to play.
Shopping should and can be a pleasurable and social experience; as my wife will remind me, we need a bit of retail therapy from time to time. That applies equally to those providing the service and those receiving it.
Mike Amesbury
I agree on the point about quality. There should be a race to the top. Sometimes quality costs, so quality might mean better pay. Paddy Lillis, the general secretary of the Union of Shop, Distributive and Allied Workers, is my constituent; I recently had a conversation with him, and there is a campaign to raise the living wage to £10 an hour. Does the hon. Gentleman agree with that?
Bill Grant
As someone whose mother worked in the pit canteen and made beds at Butlin’s on a Saturday, I fully agree that those who provide such services deserve better pay. We need to recognise those in hospitality and eateries, and the value of those who prepare and serve the food. As a nation, for decades and generations we have undervalued those people, so I totally agree with the hon. Gentleman, and the price has to be passed on to the consumer.
Employees—dare I say the next line? The hon. Gentleman must have been looking over my shoulder—should receive fair pay for work undertaken, and should have security of tenure in their job. Customers should feel involved in the purchase, and should engage with the sales assistant. It should not be a beat-the-clock exercise, in which people have to hurry to return to their vehicle before they receive a fine for overstaying their welcome. Nor should there be an additional cost burden on retailers if their staff wish to park in the vicinity of their place of work; in certain cities, retailers are being asked for £500 or thereabouts per annum per member of staff who wishes to do that.
Recently it has been announced that in Glasgow city centre, parking restrictions and charges will now apply on the Sabbath—on Sundays. Business representatives have already taken to the media to express their concern that the move will lead to shoppers deserting the city centre on a Sunday in favour of large out-of-town shopping centres, which, as we are all aware, generally have free parking. As a business person once said, “When you can’t change the direction of the wind, adjust your sail”. We should manage the change. We need to encourage a steady footfall for the future, and stop what appears to be a stampeding exodus of high street shoppers to out-of-town retail centres or online facilities. In Scotland, that may mean the Scottish Government and councils working together, and reconsidering their planning and roads legislation, and policies that affect town centres.
Certainly, in my constituency the main towns are, for want of a better word, hurting. They have not hurt as much in their whole existence, and in many cases they have lost their dignity, which they richly deserve to have returned to them. However, the centre of Cumnock is an exception, as a small town that has recently been sympathetically revitalised by the introduction of a small new build retail facility that blends into the streetscape. The principal occupier, a prominent food retailer, appears to complement the existing, varied retailers—so well done to East Ayrshire Council. Local chambers of commerce and industry, such as the Ayrshire chamber of commerce, are to be commended for their encouragement of local enterprise and excellence.
Inevitably some businesses in the UK will, regrettably, fail, for one or more of the reasons I have indicated. The Government need to consider taking appropriate measures to ensure that the auditing of retail businesses is robust; that any asset stripping, particularly by big businesses, will be better regulated in the future, for the protection of employees and shareholders; and that a review—and, if it is deemed appropriate, reform—is carried out with respect to company voluntary arrangements. There is also a need to look at business rates and taxes.
Our future is created by what we do while we are living for today, so I hope that as a result of the contributions to the debate, the Minister will be encouraged to reflect on the Government’s planning for tomorrow. We need more practical measures like the future high streets fund, which was introduced in the 2018 Budget. It is an excellent boost to high streets, despite the failures mentioned earlier. Hopefully those who reapply will be successful next time. I ask the Minister to bring forward further measures to secure our local retail trade and help to re-energise high streets throughout the UK, while remembering that high streets are no longer a cash cow to be financially milked by an outdated business rating system that needs grassroots reform.
Jim Shannon (Strangford) (DUP)
I extend my thanks to the hon. Member for Blaydon (Liz Twist) for obtaining the debate and introducing it so well, and to the other hon. Members who have taken part. I shall probably echo their comments, although obviously I will give mine a flavour of Northern Ireland, because I always do—or, specifically, of my constituency’s main town of Newtownards.
At a time when it is easier and quicker to buy online, I am thankful that the high street in Newtownards is bucking the trend and thriving. That is due in large part to a council that wants to be involved and helpful. It co-operates with the local chamber of trade, which is forward thinking and absolutely invested in the future of the high street. Rather than staying the same and trying to hold on to what is there, it is focused on moving with the times. The benefits are clear. I had the opportunity of a meeting with the chamber of trade about six weeks ago. The members have an interesting vision for the high street; it is about the shopping experience. It is more than just shopping online as some people do, but it is also more than just going to the high street.
In my constituency, those over 55 have a certain level of disposable income, so the high street and traditional shops are well utilised; but the chamber of trade vision is that there should, at the same time, be a shopping experience for families. The right hon. Member for Delyn (David Hanson) mentioned that idea. The vision is about having somewhere for the children to go, green and attractive areas in the town, and a bit of coffee culture. All those things make the experience of going shopping more than it would have been in the past, in my younger days. What is exciting is that the chamber of trade and Ards and North Down Borough Council have the same vision. It is important to encourage that when we can.
There are shops that have a face on the high street and an online service as well. We must look at different ways of doing things. An advantage for some of the shops on my high street is that they do probably 60% of their trade on the high street and 40% online. They do business online across the whole world—in the United States, the far east, Canada and Africa. Their products are attractive in those places, and they find avenues to sell and be promoted there.
People have busy lives. My parliamentary aide works until 5, collects her children and brings them home to begin to make their dinner at 5.30. They eat their dinner, have story time and their bath, and then they are in bed for 7.30. She then is faced with the dilemma of whether to go to the shopping centre and run into Asda, or to sit in the comfort of her home and order things online. Late-night opening in shopping centres used to be busy, but now people have an option. Local businesses miss out when busy people go for the easy option of shopping online and ordering from Tesco or Asda. All those shops now do home deliveries.
The easy option may not be safest option. As the debate on electrical safety yesterday highlighted, online retailers do not have the same safety scrutiny as physical shops. That should be a consideration in any retail strategy, as was emphasised in the half-hour debate yesterday led by the hon. Member for Swansea East (Carolyn Harris). We need to remind people that going down to the high street on Saturday can be much more fulfilling than scrolling down an online list. As trade changes, with more online sales, it is great to see the plans for our local high street to adapt. I have invited the Minister—I think we are waiting for a date to be confirmed—to come and see all the good things I have been telling her about Newtownards. We look forward to meeting the hon. Lady on that day.
What does the shop in the high street need? It is important to have a better and quicker planning system for improvements, and to support fresh looks and entice more people. We are fortunate as we have had a Saturday market for 20 or 30 years, which attracts many people to Newtownards and its traditional shops. Newtownards is one of the better towns in Northern Ireland when it comes to choice, variety and cost—and all the things that are important in shopping. A mix of shopping and accommodation would be helpful for the evening and coffee culture. Indeed, in the past we had a scheme, the living over the shop scheme, that supported the provision of accommodation on the high street. The right hon. Member for Delyn mentioned it; I did not know he had been the Minister responsible, but I am pleased that it was his initiative, and I am deeply grateful to him. I promoted it over and over in my time on the council and on the Assembly—and only today do I know that he was the man who brought it forward. I thank him on behalf of my constituency. It is so important that empty space is used in a good way, and that was a way to utilise it very well.
The business rates have to be revised. Many stores in the town need assistance, as their rates are truly a significant part of their bills. The ministerial visit will enable the shopkeepers in the town of Ards to highlight the wonderful things that are being done, and to make some input into how Government can restore the high street and encourage online businesses to have a face on the high street. We are indeed fortunate in Ards that the centre of town has wide variety, with many different types of businesses from clothes and shoes to opticians and solicitors. There are areas of redevelopment such as the South Street Precinct, which is providing approximately 100 jobs. That is among the things I would like the Minister to see.
Many stores in our town centre are doing a great trade online. Ards is holding its own, but now is the time to take steps forward and to secure the future of the town by adapting and moving with the times. Retail strategy needs to include all of the things I have outlined. I believe that we are on the precipice of greatness, with many high street businesses wanting to keep their footprint, but moving online. Now is the time to make some input into the situation, with a fit-for-purpose UK-wide retail strategy.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
It is an absolute pleasure to serve under your chairmanship, Sir David. I thank my hon. Friend the Member for Blaydon (Liz Twist) for securing this important debate. We have already heard powerful contributions on both sides of the Chamber about how the Government’s lack of a clear, coherent and holistic retail strategy is damaging our high streets and shopping centres, not to mention the livelihoods of those trying to make a living in the sector.
I will begin by recounting a couple of conversations I had with business owners in Batley and Spen. A couple of months ago in Batley, I called into a restaurant called Mi Nonnas. It is a really nice coffee shop and lunch destination. The owner showed me painful statistics demonstrating the fall in his revenue due to the controversial changes to our bus routes, which have completely decimated his restaurant’s footfall. He told me that he has not taken a wage, and that the situation is really stressful for him and his family. His is not the only local business affected by those changes. Sadly, since 2010, we have lost 3,000 bus routes nationally, and central Government cuts have seemingly little regard for the wider consequences for retailers.
The second conversation I had was at a lovely needlework and wool shop in Heckmondwike. The owner told me that footfall had really reduced because the last bank had left the community. The people who use her shop are often older people who knit and sew. They are less likely to take a longer journey to go to a bank, so they take their business elsewhere; considering that the UK has lost almost two thirds of its banks and building societies over the past 30 years, that will not change any time soon. A fifth of the population are 2 miles adrift from their nearest branch, likely with a substandard bus route to boot.
The massive hike in business rates announced last year is another issue that constituents mention to me regularly. In an age when people shop online, our local independent retailers need a leg up. They need vision and creative thinking. They are hamstrung by antiquated rates systems, which price too many independent retailers out of the market. Although I welcome the short-term rate relief for some businesses announced in last year’s Budget, it is nothing more than a sticking plaster. While our high streets are increasingly dotted with vacant shops, the big supermarkets get a cut in rates and online giants such as Amazon pay a fraction of their multibillion-pound turnover. That does not make sense to me. With the collapse of big brands such as Toys R Us, which had a store at Centre 27 retail park in my constituency, it is clear that these issues go way beyond our high streets.
The retail sector accounts for more than 3 million jobs in the UK, yet it is often overlooked. The British Retail Consortium warns that 74,000 jobs were lost last year, and that up to 900,000 will be lost by 2025. That would be a staggering blow to the sector. We need a clear retail strategy. The fact that the Government’s industrial strategy, which was unveiled almost two years ago, has yet to create a sector deal for retail speaks volumes. The Government’s Retail Sector Council, which was designed to address key challenges facing the sector, meets a paltry three times a year. That is not good enough. As we heard from my hon. Friend the Member for Warrington South (Faisal Rashid), who is no longer in his place, local authorities have to bid against one another for money from the future high streets fund. There is no guarantee of success, and the fund goes nowhere near far enough to address the myriad issues that have been raised in the debate.
How do we move forward? Let us start with the basics. We need to ensure that people can access our businesses. Public transport is crucial. We need to invest in buses and trains to end this downward spiral. We must not have communities where there are no banks left. I applaud NatWest, which has a pilot scheme to bring a number of banks under one roof and offer a limited service to businesses. We need to escalate such opportunities, and perhaps Government should drive them.
I am delighted that the Labour party recently committed to introducing a network of post banks based in post offices in the hearts of our communities. It is really important for older people in particular to be able to access their money, and that business owners do not to have to travel too far with cash in their pockets, or put their workforce at risk by asking them to carry large amounts of money around on buses and elsewhere. Our business rates system also needs fixing. Nothing but a comprehensive review and overhaul of the system will suffice, so I am pleased that the Labour party is committed to doing exactly that, along with taxing online retailers, implementing free wi-fi and banning ATM charges. Like colleagues, I commend USDAW’s brilliant Save Our Shops campaign, which focuses on levelling the playing field between traditional and online retailers, improving pay and conditions, and changing perceptions of retail jobs.
We are just not having the conversations that matter with policy makers. It is down to us as Members of Parliament, and to trade unions, to try to get those conversations going. I do not think policy makers understand the myriad challenges for villages such as Birstall, or bigger communities such as Cleckheaton and Heckmondwike. Having short-term fixes and Departments working in silos certainly is not cutting it.
A clear retail strategy that looks at the whole picture is overdue. We need great ideas for making our high streets more community focused, tackling loneliness and introducing flexible workplaces and leisure opportunities, and for bringing culture—buskers, art and so on—to our high streets and greening them. We need to ensure that our retail survives and can transform our towns and villages, bringing us a sense of place and home, and making our communities great places to live and work.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Sir David. I, too, congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing this debate about a topic that is vital to the survival of our high streets, as evidenced again by the number of Members present. I say “again” because this is not the first time we have gathered to discuss the causes of town centre decline and what we should do about it. Indeed, I took part in a debate on urban regeneration shortly after being elected to this place four years ago.
Very little has changed since then. In fact, things have probably got worse. In 2018, nearly 85,000 retail jobs were lost in the UK as businesses continued to go bust. In the past 18 months alone, the following big chains have gone into administration: Greenwoods, HMV, Berketex, Crawshaw, Evans Cycles, American Golf, Orla Kiely, Poundworld, House of Fraser, Gaucho, Warren Evans, East, Carpetright, Toys R Us, Maplin, Mothercare, Homebase, and L. K. Bennett. Many household names; many long-standing companies. It is a crisis.
The British Retail Consortium’s monthly footfall tracker showed that store visits hit a six-year low in May this year, with declines experienced in every region and across high streets, retail parks and shopping centres. According to a new report, online shopping will account for more than 50% of retail sales within the next 10 years. The report states that that growth will be powered by three primary factors: the changing demographics of the UK adult population; the development of faster, cheaper home deliveries; and fewer physical stores.
Our high streets and small business owners will continue to be hit by those changes in shopping habits. The Centre For Towns showed that the decline of our high streets has picked up pace in the past 10 years as consumers shop online rather than visiting the high street. The Office for National Statistics reported that the number of retail businesses and the number of high street retail jobs fell in every region of England except London between 2012 and 2017.
Those trends are reflected in the two main towns in my constituency: Ellesmere Port and Neston. Both have a retail offer significantly smaller than it was five years ago, due to the dramatic changes we have heard about. The town centre in Neston has lost all its banks, which has had a negative impact on both customers and retail businesses. A lot of retail units are in private ownership, many of them too large for what retailers are looking for nowadays, and shops in Ellesmere Port are closing regularly, and are not being replaced. When banks close branches, they undergo what I consider to be a cursory consultation that changes nothing and does not require them to think about their wider responsibilities for the vitality of our town centres.
Mike Amesbury
Does my hon. Friend agree that it is rather confusing to look at the ownership of some of those banks? Of course, we stepped in some time ago—they were bailed out to the tune of billions of pounds—so there is ownership there, but where is the control? It is as though the referee has just walked off the pitch. Do we require Government intervention?
Justin Madders
My hon. Friend and neighbour makes an excellent point. Indeed, the power that central Government have through procurement and their control over many of those private enterprises should be used for the wider benefit of communities. As my right hon. Friend the Member for Delyn (David Hanson) mentioned, post offices are a great example of where we have lost control of an organisation. A number of the post offices on high streets in my constituency are closing, without any regard for the wider community impact. We really must begin to take back control, to coin a phrase.
Most of all, it is our town centres that are in need of a retail strategy. They are the heart of our communities, and their importance must not be underplayed. A new approach that regenerates our town centres is vital if we are to preserve their character, restore civic pride and give people a positive reason to visit their high streets. Local authorities have the knowledge and tools to tackle this, but they cannot do so without significant financial support. However, local authority funding has been cut like never before and the money needed for a true transformative approach to regenerate our town centres simply is not there.
As my hon. Friend Member for Batley and Spen (Tracy Brabin) said, we need to be much more joined up in how we approach these things. The move to electric vehicles is one such example. It is not entirely clear who is in charge of the charging infrastructure, but it would be great if there were joined-up thinking, with charging points located in town centres used to encourage people to use the town centre facilities while they charge up.
As we have heard, unfortunately the Government’s plan to address the crisis is to pit towns against one another in a competitive bidding process known as the future high streets fund. Only a lucky few get a slice of the pie. I learned this week that despite putting in an excellent bid for Ellesmere Port, my local authority was not successful in the process. What does that say to the people of Ellesmere Port about the importance of their town, compared with others? What will the Government do to support Ellesmere Port town centre? Will there be a second round of funding? Will there be other initiatives, or will we have a rerun of the 1980s policy of managed decline for parts of the north?
My local council is doing what it can, but the multifaceted challenges we have heard about in the era of austerity cannot fall entirely on its shoulders. The trends are there for all of us to see. The evidence is clear that the capacity to meet such challenges has been hollowed out after a decade of cuts. It will take sustained, focused and locally driven but nationally supported investment. It will take imagination, requiring a change from the old way of doing things. It will take central Government to realise that one of the reasons why so many people feel disengaged and disenfranchised is that when they go to their town centre and see empty shops—
Justin Madders
I will, Sir David. When people see the household names going, the banks closing and the public sector shrinking, they have a stark reminder of how the growth of the economy has not been evenly distributed. Civic pride, community identity, jobs and opportunities all suffer when the high streets are in decline. We owe it to the people in our communities to do much better and reverse the decline.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Blaydon (Liz Twist) on securing this important debate on a matter that is not raised often enough in this place. As a former retailer, I have seen many of these issues over the years, and I am delighted that she has been able to bring the debate to Westminster Hall. As we will get into online retail, I bring the attention of hon. Members to my entry in the Register of Members’ Financial Interests.
The hon. Lady talked about the effects on people, communities and indeed companies. She brought up the spectre of the BHS closures, which was deeply hurtful to many people involved. She also talked about the work of local authorities and the possibility of them getting involved, and correctly called for a longer-term strategy and vision from the UK Government.
The hon. Lady talked about the business rate system in England, which is a key issue. I will come on to the Scottish context. She also mentioned the requirement for proper pay for people working in retail. She will be glad to know that in Scotland the real living wage—not the pretendy one—is being promoted by the Scottish Government, which indeed is a real living wage employer. Almost just at this moment, the 1,500th private real living wage employer in Scotland has been unveiled: Johnstons of Elgin, the menswear retailer. It was congratulated by the fair work Minister, Jamie Hepburn MSP. Congratulations to Johnstons; it is a really good example.
The hon. Member for Henley (John Howell) talked about changes to banking and rural communities. I disagree about everyone being able to go on to online banking. Many people with disabilities and people in rural areas need banking facilities in the heart of their communities. In particular, those who are vulnerable need access to cash in a way that cannot be done online. The hon. Gentleman did, however, make an interesting point about town planning, which people should consider carefully.
The right hon. Member for Delyn (David Hanson) discussed retail’s important contribution to the UK economy and employment. Indeed, in Scotland, retail is the largest private sector employer, accounting for 250,300 jobs. Retailers are kind-hearted, having donated £10 million to good causes in Scotland, and retail accounted for 13% of all new businesses formed in Scotland in 2016. It also accounts for a fifth of all business rates in Scotland.
The right hon. Gentleman talked about out-of-town versus city centre. There is much debate about how we marry the two so that everyone can benefit, because they are realities. That is one for greater consideration. He also mentioned the loss of UK Government offices, which I have seen in the highlands, with the tax offices, Department for Work and Pensions offices, local passport offices and Driver and Vehicle Licensing Agency offices all coming out of communities and affecting people and local businesses, particularly retail.
The right hon. Gentleman brought up another subject close to my heart: support for post offices. These people desperately need a better deal so they can secure a living wage. As the Minister will acknowledge, there are people in post offices struggling to make a living. The right hon. Gentleman also made many suggestions to the Minister in a very good speech.
The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) talked about regenerating town centres, accepting the online issue. I still get a bit of a shiver when thinking about this future of deliveries by drones, with all these drones whizzing about. The temptation to bat them out of the way might be too strong, but we should be aware that that may come in the future. He talked, quite rightly, about the danger of isolation for the elderly and those who are not internet-savvy—I think he included himself—with different ways to shop. He said that people deserved better, and he talked about the real living wage, so I am sure he will join me in congratulating Johnstons of Elgin.
The hon. Gentleman quite rightly said that local authorities and the Scottish Government should work together. He will be glad to welcome the work that the Scottish Government are doing with the Convention of Scottish Local Authorities on town centres. As well as providing the best business rates in the UK, the SNP Scottish Government have put together a business rates relief package worth more than £75 million. Ninety per cent. of businesses in Scotland will pay a lower poundage than they would anywhere else in the UK. The Scottish Government have launched a £50 million town centres fund in partnership with COSLA, with local authorities allocating the funds. That goes a long way in promoting the work between Government and the local authorities.
Bill Grant
To put that in context, when I look at my inbox I see a number of businesses have experienced a significant rates hike. Rural businesses in particular are hurting terribly, so a system had to be introduced to compensate for that. There are anomalies.
Drew Hendry
Unfortunately, the hon. Gentleman is trying to punt a line that is not the fact. Through the small business bonus, 100,000 businesses in Scotland pay no rates at all, and those are mainly businesses in rural areas that do not come up to the level for being taxed.
The hon. Member for Batley and Spen (Tracy Brabin) correctly talked about public transport and its impact on retail. She gave the example of the fall in revenue for one of her constituents due to a change in bus routes. That brings us back to town planning. People must plan for the unintended outcomes as well as those they want in the future. She also mentioned banks and building societies, the importance of business rates and the need to tax big online retailers.
The hon. Member for Strangford (Jim Shannon), as ever, did a great job of promoting his own constituency. He talked about the chamber of trade and, importantly, the need for a shopping experience. Green areas, coffee culture and all those things need to be thought out in planning for the future. He talked about the mix of online and physical, which is what we used to call—
Sir David Crausby (in the Chair)
Order. Will the hon. Gentleman bring his remarks to a close? I added a few minutes for earlier speakers, so I will have to take a minute off each of the Front Benchers.
Drew Hendry
I will try, but there is a lot to say.
Unfortunately I cannot discuss the speech of the hon. Member for Ellesmere Port and Neston (Justin Madders), who made a number of important points. I will finish with something that is important to me and my constituents: the unfair situation on delivery charges. As we move to a culture of more online deliveries, consumers in Scotland are having to pay a disproportionate amount more because of a postcode system used by retailers to charge them extra for deliveries. That is unfair, and the Scottish Government have done a lot of work on that issue. My colleague, Richard Lochhead MSP, and I have worked very hard over the years to make changes, and have made significant breakthroughs with individual retailers. However, it is time for this UK Government to step up to the mark and do something to ensure fair delivery charges for people across Scotland, particularly in rural areas of the highlands and elsewhere.
Bill Esterson (Sefton Central) (Lab)
It is always a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing this debate and on an excellent speech. I also congratulate my right hon. Friend the Member for Delyn (David Hanson) and my hon. Friends the Members for Batley and Spen (Tracy Brabin) and for Ellesmere and Neston (Justin Madders), who all advocated for their constituencies and spoke strongly on this issue. They touched on the importance of a retail sector agreement and referred to the USDAW proposals for an industrial strategy for retail; as a member of USDAW, I declare an interest in that matter.
My wife and I decided to buy a dishwasher, and searched online for a local retailer. We found that Smiths TV, in Formby in my constituency, sold dishwashers. Its website was well designed, and when we went to the store, the layout was attractive and the staff were friendly and helpful, so we bought from them. It is a local independent retailer that is clearly doing well, with four stores in Sefton and west Lancashire. Meanwhile, Aintree retail park and Aintree Racecourse retail park, which are next to each other, are both thriving, packed shopping centres where footfall is strong.
In my constituency and across the country, there are success stories in retail, including independent retailers that combine a strong online presence with excellent in-store customer service, and shopping centres where the management and stores combine to present an attractive offer that ensures that customers come and visit. To return to a point made by my right hon. Friend the Member for Delyn, what can high streets learn from successful out-of-town shopping centres? I have mentioned the success stories in my constituency, and it is important that we all do so, because there are plenty more.
However, as is the case with everyone else who has spoken in the debate, the trend across my constituency is far from positive. There have been high-profile closures such as Maplin, Comet and the other names that have been mentioned. In the high streets of my constituency—in Formby, Maghull and Crosby—we have the tattoo parlours, betting shops and tanning salons that others have mentioned, where once we had household names or good local retailers. Many retailers in my constituency, like everywhere else, find trading tough. That is why it is disappointing that the Business, Energy and Industrial Strategy Committee had to report that
“the Industrial Strategy promised to work with low productivity sectors, such as retail and hospitality, with the potential for even small productivity gains across people-heavy sectors having a significant beneficial impact on the UK’s overall productivity. Yet we found that so far neither the retail nor hospitality sector has been able to make significant progress on securing a sector deal of their own”.
The retail industry is a key part of our economy; it employs 3 million people and, according to USDAW, contributes 11% of UK economic output. Many people have their first experience of work in retail. In smaller towns and villages, shops are often the heart of the community, and retail is a fundamental part of how we all go about our day-to-day life. However, 74,000 jobs were lost in 2018 alone, with many more job losses predicted. There is a long-term decline in retail, which is a cause of great concern in many high streets and has a profound impact on communities, workers and the whole country.
However, as I have shown through the local examples I have given, there is much in the industry and high streets and town centres that tells us that this crisis can be addressed. Businesses can still thrive, and good, higher skilled, better paid jobs can be available if we improve skills and use technology to drive productivity, with a strong strategy and the proper partnership between national and local government, businesses and the wider community.
A successful retail strategy should put in place support for businesses to harness the power of the internet and to benefit from a combination of online and offline shopping. Smiths TV in Formby shows how that can work, but such good practice needs far greater promotion and support. Labour’s plans for business support will maximise the benefits of technology to help business, deliver the well-paid jobs of the future and help communities as well. As was said earlier, high pay means there is more for businesses too, as well-paid workers are able to buy more goods and services from them. The good use of technology, allied to equipping staff with the technical and interpersonal skills that I experienced at Smiths, offers a vision of a successful retail future.
The challenges in retail, especially in our high streets, have been analysed by a number of organisations. The Government must listen to the British Retail Consortium, to Bill Grimsey and Mary Portas, to USDAW, and to others who have written excellent reports. All have produced reviews with evidence-informed recommendations to address the high costs of business rates; the lack of footfall and public transport; bank and post office closures; the need in town centres for work space and housing, as well as for good-quality leisure facilities such as bars, cafes and restaurants; and the opportunity to re-establish public services with lots of staff near where shopkeepers can benefit from their spending power—services such as doctors and dentists, whose patients are also potential retail customers.
Retail is an industry of national importance. We are a nation of shopkeepers, but we are in danger of becoming a nation of shuttered shops. That is why Labour’s plan—a bold and comprehensive offer that would bring customers and workers to town centres, reform the crippling system of business rates and preserve the essential heart of communities—is so necessary. In it, we have addressed the need to have decent bus services—services that are free for under-25s and that have free wi-fi; to keep banks open; to address the digital exclusion of the too many who cannot go online to bank, those who need to use cash to buy and those businesses that rely on cash; to retain cash machines for the same reason, for consumers and businesses alike; to have a register of landlords to address the challenge of empty shops; and to overhaul business rates and consider the alternatives, such as an online sales tax. All those ideas are designed to help address requests made by businesses and shoppers. How about electric vehicle charging points to attract shoppers, while at the same time nudging behaviour on climate action?
A retail council that meets three times a year and whose recommendations go nowhere is a talking shop, and is no substitute for a retail industry strategy; £150,000 for a study of a limited number of high streets is no strategy either. When the majority of high streets have been excluded from the high street fund, it starts to look like window dressing, rather than the basis of a strategy that could transform the prospects of retail and communities. A lack of a detailed plan simply will not save retail jobs, or reinvigorate high streets or communities. There are deep-seated problems in areas of deprivation, which will take much greater intervention than in more prosperous areas.
We must recognise the realities of shopping habits, including online shopping, and not give up on our shops and their staff. Working in a warehouse fulfilling orders cannot be the limit of our aspiration for millions of workers, an nor will online shopping be the answer in all cases. Creating an attractive experience that balances online and physical shopping will provide an opportunity for businesses, consumers and workers, as long as we have the right strategy. Human interaction is important in life; that is as true in retail as anywhere else, and online cannot replicate that experience.
Smiths TV in Formby shows what is possible. If it can succeed as an independent retailer, so can many more. However, retailers cannot do it alone, which is why it is now time for the Government to take action. We must have a proper retail strategy, working with the industry to preserve jobs and reinvigorate communities.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
It is a pleasure to serve under your chairmanship, Sir David, and I congratulate the hon. Member for Blaydon (Liz Twist) on securing today’s important debate. Like her, I have a family history in retail and shopkeeping: my great-grandmother ran a corner grocery store, my great-grandfather was a bootmaker and my father used to run a DIY shop.It is interesting that we are having this debate, because he closed that DIY shop after the retail sector changed. The likes of B&Q finished off some of our small, independent DIY shops. I hope I have been able to bring some direct understanding to my role as a Minister in this area.
As the hon. Lady and other Members have pointed out, the retail sector employs more than 3 million people and contributed £94 billion of gross value added to the UK economy in 2018. The retail sector is at the heart of our communities and our country. I reassure Members that I am extremely passionate and determined about the retail sector and that I care vehemently about it, much as everyone who sits in the House of Commons—not just those in the Government—cares very much about it and values it, the jobs it creates and the value it delivers to our communities.
Retail has always evolved to meet changing consumer demands, and it will continue to do so. Indeed, it is already thriving in many areas. For example, we have the most developed e-commerce market in Europe, with 48% of the estimated total of €198 billion in 2018. We recognise the high-profile pressures in the sector, but there are also businesses that are expanding and developing, as outlined by the hon. Member for Sefton Central (Bill Esterson) with his great plug for his local retailer Smiths TV. Amazon, Lidl, Aldi, Ocado and JD Sports are all companies investing in UK retail, which is a good sign for the future. Primark, which recently opened the world’s largest fashion retail store in Birmingham, is proving that a high street business can still be successful without a significant online presence. We have seen sales increase by 4% and increased profits. Organisations such as Pets at Home are taking on the challenge of changing consumer demand. In its stores, it is bringing in veterinary services and grooming services and investing in the workforce and apprenticeships. Many retailers are grasping the challenge of a changing retail sector and ensuring they are able to deliver services on the ground that consumers want.
We have heard examples from Members about local growth. It has been great to hear examples of local authorities working proactively with their high street forums and the opportunities available to them to try to grow and really focus on meeting the needs of the local community through the local retail offer. However, to continue to evolve, we need to innovate. I was therefore excited to see the UK Digital Retail Innovation Centre open in Gloucester in May this year, following a funding award of £400,000 from Gloucestershire’s local enterprise partnership. It will be a national centre for testing and developing disruptive digital innovations and will help shape and inform the future of cities with a special focus on retail.
Alongside those successes, we have seen some high-profile names struggle, including Woolworths, Toys R Us and, more recently, Debenhams and House of Fraser. We have been used to seeing those iconic names on our high streets, but in some cases they are no longer there. I do not underestimate the impact of those changes, which can be hugely difficult for the individuals and families involved and for communities. Indeed, I know the hon. Member for Blaydon met Toys R Us staff from the metro retail park when the store closed down. Some of them had been working there for 20 years, and I commend her for the support she showed to her constituents.
There is no doubt the sector is facing significant pressures, whether from uncertainty in the business environment or from changes in consumer expectations and preferences towards online shopping. Those challenges are reflected in retail across the world, not just in the UK. Our retail sector is still one of the best in the world, and we are well placed to deal with the challenges. Retail has a long history of responding successfully to change, of turning challenges into opportunities and of turning pressure into innovation. The Government are, and I personally am, absolutely committed to supporting the sector as it responds to change and strives to continue to serve the public so well, as it has in the past, and as it will in the future.
I am pleased, as part of my portfolio, to serve as the co-chair of the industry-led Retail Sector Council, alongside Richard Pennycook, the chairman of the British Retail Consortium. There has been confusion over the idea that the council does not meet very often and is just focused on the troubles of the past, rather than looking to the future, but I assure Members that we not only have Retail Sector Council meetings, but a number of sub-groups heading up the workstreams and meeting regularly. A lot of work goes on outside those meetings to reach targets. The workstreams are focused on future challenges and how we can drive the retail sector forward. It is not just a talking shop; if it were, I can assure Members I would want no part in it. I spent many a year before becoming an MP in talking shops, and I do not particularly want to do that as an elected Member of Parliament and especially not as a Minister.
Bill Esterson
I am glad the Minister has mentioned the Retail Sector Council. I am curious as to what it has achieved. Perhaps she can tell us, because if it is not a talking shop, it will have made a difference, and there will be some outcomes, deliverables and differences made.
Kelly Tolhurst
The hon. Gentleman is quite right. As he will know, when the Retail Sector Council was set up last year, we set its priorities. The six workstreams and the priority workstreams have been agreed. We are working for outcomes. The beauty of the Retail Sector Council is that it is the retail sector coming together with Government to find solutions to the future challenges. It includes not only the bricks-and-mortar retailers, but the online retailers and the small independent retailers. In the council, the sector is working with Government to move forward and bring forward plans and proposals that will benefit and aid the sector.
Kelly Tolhurst
Absolutely, but the hon. Lady will know that all the sector deals are being driven by the sectors themselves with the support of Government and with strong leadership and great ideas. My wider hope for the retail sector is that we will see that deal delivered by the Retail Sector Council as soon as possible.
Costs to business is another workstream, and a number of Members raised them. As part of that workstream, the co-chair and I are meeting the Financial Secretary to the Treasury next week to discuss some of the preliminary findings on costs to business in the retail sector. A large survey of the entire sector was carried out. That area is of big interest to me in terms of how we levy taxation in the future. The skills and lifelong learning workstream is running in parallel with the costs to business workstream. Some of the early work on that is being led by Amazon and a small working group, and that is proving useful.
Alongside the work of the retail sector, the Department regularly considers a wide range of policies. My officials are working across Whitehall on policies that affect the retail sector. A number of Members have mentioned support for our high streets. Members may know that the high streets Minister, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), has recently taken on a joint portfolio with my Department. As I am the retail sector Minister, we work closely on joined-up thinking on retail and high streets. We have the £1.6 billion action plan for high streets, which includes the £675 million future high streets fund. We are seeing 50 organisations move to the next stage in the development of the plans, which will enable local authorities and local populations to drive the development of their towns. We have the taskforce, which will work with local authorities across the country to deliver help for those that need to increase their retail space.
I will sit down now, because I recognise that the hon. Member for Blaydon may want to come in. I am happy to have another meeting with her on the other questions she asked.