The Future of the High Street
(3 years, 11 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Kelly Tolhurst)
I beg to move,
That this House has considered the future of the high street.
There is no shying away from the fact that this pandemic has clearly had a devastating impact on the great British high street and on the businesses that occupy it. I have great sympathy with anyone whose business or job has been endangered by this pandemic, and I want to reassure the House that this Government are unwavering in our commitment to support our high streets and town centres in the weeks and months ahead. I am personally very passionate about our high streets and town centres. They are so much more than places to shop. They are where we meet our families, friends and neighbours, and where communities come together to work and to socialise. They are a focal point within our local areas. They are, of course, also home to thousands of people who are just as keen as the local businesses that occupy them to see their high streets bustling and thriving.
Prior to the pandemic, our high streets were already going through a significant evolution, with changing consumer habits and changes to what people are wanting to see on their high streets. People are shopping online more frequently, and our high streets are having to adapt to the 21st century to become more than just retail hubs. Since March, we have seen an acceleration in the trends that our high streets were facing. Online shopping has risen from pre-pandemic levels of about 20% to a high of 33% of total retail sales in May. Footfall has also decreased as a necessary consequence of the effort to protect public health, which is why businesses have been unable to trade as they normally would. We are proud to see so many businesses and communities coming together to support their local high streets. In my own constituency, independent retailers, businesses and local groups have come together in co-ordination with the business-led Rochester city centre forum to provide a covid-safe experience in the run-up to Christmas. Although closed, some outlets have created fantastic window displays and decorations and are offering click-and-collect services and working together to support the high street.
Kelly Tolhurst
I know that a lot of people are keen to speak, so I should perhaps continue a bit further.
We value the support of trade bodies and representative organisations that are working with their members and the Government to plan for recovery. It is clear that covid-19 has dealt a major blow to the high street, as evidenced all too clearly by the well-known retail chains—including Debenhams and Arcadia Group Ltd—that have gone into administration.
The Government have put in place a range of support measures to assist businesses on the high street. We have provided a comprehensive package of support worth £200 billion, including the eat out to help out initiative to help to protect 2 million jobs in hospitality. We have also provided cash grants of up to £25,000 for retail, hospitality and leisure businesses with a rateable value of between £15,000 and £51,000; more than £50 billion in business loans; the coronavirus job retention scheme; and the deferral of income tax payments.
Sir William Cash
My constituency is extremely grateful for the moneys that have been provided for the high street, but does my hon. Friend agree that when consultations are taking place and project developments are being created, people in the high street in places like Cheadle in my constituency require proper consultation and should get proper consultation before matters are taken any further?
Kelly Tolhurst
I agree with my hon. Friend that local high streets are a valuable asset in our local communities and it is absolutely right that local businesses and stakeholders should be consulted and that we should get their buy-in. Any high street development should always be supported by local businesses and stakeholders.
We have acted quickly and our package of economic support is one of the most generous and comprehensive in the world. The Government announced in the spring that the business rates retail discount would be increased to 100% and expanded to all eligible properties across the retail, hospitality and leisure sectors for 12 months. We have sought to bring a much needed breathing space to business tenants by bringing forward a moratorium on commercial evictions and restrictions on statutory demands, and by winding up petitions.
The use of commercial rent arrears recovery has provided landlords and tenants with time and space to agree reasonable adjustments to rents and lease terms, including terms for the payment of accumulated rent arrears. I am pleased that so many stakeholder bodies have signed up to the voluntary code of practice to encourage constructive dialogue between tenants and landlords. We will continue to work urgently to identify further measures of support that can be put in place to assist them during this time.
We recognise that our high streets and the businesses located on them need to adapt to the changing way in which consumers are using high streets, so we are supporting areas by funding investment in infrastructure and place. Our £3.6 billion towns fund and the future high streets fund competition will create jobs and build more resilient local economies and communities as we begin to recover from the impact of coronavirus. We are now in the final stages of assessing the proposals from the shortlisted future high streets fund applicants and expect to announce the outcome of the competition soon. We have brought forward £81.5 million from the towns fund for investment in capital projects that will have an immediate impact. Each of the 101 towns selected to work towards a town deal has received accelerated funding dependent on their population.
The new £4 billion levelling-up fund for England that was announced in the spending review will be open to all local areas and allocated competitively. To support levelling-up opportunity across the country, we will prioritise bids to drive growth and regeneration in places in need—those facing particular local challenges and areas that have received less Government investment in the past.
A call for evidence was published on 21 July for the fundamental review of business rates, inviting stakeholders to contribute their views on ideas for reform in all elements of the business rates system, including future reliefs. Government are now considering the responses to the call for evidence, and the review will conclude in the spring.
We are also ensuring that our planning system is ready to support our high streets and communities in recovering from this pandemic and changing consumer habits. We have introduced reforms that create a new “commercial, business and service” use class, which encompasses a wide range of purposes, allowing businesses to attract people to high streets and town centres. That includes offices, shops, cafés, gyms and other uses that are suitable in town centres. The new class also allows for mixed use, to reflect changing retail and business models. The reforms also create new “learning and non-residential institutions” and “local community” use classes, ensuring that valued local assets such as community shops and libraries are protected. Businesses will have greater flexibility to adapt and diversify more quickly to meet changing needs and circumstances.
However, the success of a high street is about more than just funding. It requires local people to be empowered with the tools and resources they need to help their town centres and high streets adapt for the future. It is about having an ambitious vision for the future that the whole community can buy into. That is why Government are supporting local leadership through the high streets taskforce, which is doing this in four ways: building local authority capacity by providing on-the-ground experts; improving place-making skills through access to training; improving co-ordination nationally and locally, to ensure that high street plans reflect the needs of their communities; and improving the use of data and best practice.
The taskforce is being run by a consortium led by the Institute of Place Management. Over the next four years, it will provide expert guidance to those working in local authorities and business improvement districts, while supporting town centre managers and community groups to help their high streets adapt. In response to the pandemic, the taskforce published a covid recovery framework to inform local places in planning their response to the pandemic. I know that a number of high streets have found this useful and that St Helens, Norwich and Solihull have been among the early users of the framework. The taskforce will be providing in-person expert support to those high streets that need it most, offering expertise on subjects such as planning, design and place making. We continue to explore what more can be done to help our high streets and town centres quickly recover and adapt.
While covid-19 has posed huge challenges for our high streets, we have also seen some inspiring examples of businesses adapting and communities rallying round to support their local independent shops through the pandemic. For some communities, this lockdown has led to a reconnection with the local. We know that footfall has returned to our district centres at a quicker rate than it has in our larger town and city centres, with people wanting to shop and socialise closer to home. Research from PwC and the Local Data Company also suggests that independent shops have fared better than chain stores over the course of the pandemic. That may give a glimpse into the future of our high streets as places of commerce but also unique spaces that reflect the needs of the local community.
That has been underscored by my Department’s experience of running the Great British High Street awards. What linked all our winners was a unique offering and sense of belonging, and it is this sense of local community—this intrinsic link between our high streets, our town centres and our society—that we will re-establish and strengthen as we emerge from this pandemic. I believe that we can renew our mission to help our high streets adapt, not only to support their recovery from the effects of covid-19 but to help them continue to evolve and flourish for generations to come.
Mr Deputy Speaker (Mr Nigel Evans)
A considerable number of Members have put in to speak, so I am afraid that we will start with a time limit of three minutes for all Back Benchers. If any Back Benchers who are on the call list wish to withdraw, they should get a message to the Speaker’s Office or come to the Chair and inform me. Please do not assume that the list is exactly as it was, as a number of Members have withdrawn already, and if you miss your place, you will be put to the very bottom. I call Steve Reed.
Steve Reed (Croydon North) (Lab/Co-op)
As today is the first day of Hanukkah, I would like to wish everyone in the Jewish community chag sameach.
I am afraid that the Government are standing by as Britain’s high streets decline. Footfall on our high streets was down by 10% under the Conservatives even before the coronavirus hit, and about one in 10 high street shops were already standing empty. Since 2010, the Conservative Government have presided over the closure of 773 libraries, 750 youth centres, 1,300 children’s centres, and 835 public toilets. This Government are devastating the vibrant high streets that are the heart of our communities and of our British way of life.
Mary Portas, who led a Government review of the future of British high streets, now has this to say about the Government:
“They need to wake up. It’s shameful that they have still not readjusted their thinking on how Amazon and the delivery giants should be paying equivalent rates of tax online. It’s shameful they’re not doing anything about it. Their slowness in understanding, their tardiness, is ridiculous.”
She is angry because the Government have done nothing to address the massive disadvantage that high street businesses face compared with online retailers. Labour has repeatedly called for a root-and-branch review of business rates to make the system fairer and help high street shops to compete with online tech giants. Debenhams has recently gone into liquidation, with a potential loss of 13,000 jobs. Arcadia has gone the same way, putting 12,000 jobs at risk, with the loss of leading brands like Topshop, Burton and Dorothy Perkins from our high streets. Retail is clearly changing as shopping moves online—a process speeded up by the pandemic—so it is all the more astonishing that the Government have done so little to level the playing field between bricks-and-mortar shops and online retailers.
We all owe a debt of thanks to retail workers for all they have done to keep the country going through the pandemic. They have put themselves at risk to keep our shops open and the shelves well stocked, so what a disgrace it is that the Government are rewarding so many of them with job insecurity and job losses. The covid-19 pandemic has deepened the emergency on our high streets. Since the economic crisis began in March, up to 20,000 shops have closed and 200,000 people have lost their jobs in retail and hospitality, but instead of offering the help that is needed, the Government are refusing to properly support businesses under the highest tiers of covid restrictions.
Hospitality businesses and their supply chains are in particular trouble. Some 5,500 pubs and bars have already closed in the 10 years since the Conservatives came to power—that is one pub gone every 14 hours that they have been in government, for a full decade. This sector now urgently needs support to survive; otherwise our high streets will be further blighted with the closure of more pubs, bars and restaurants. After struggling to survive the pandemic for nine months, businesses are now in a far weaker financial position. For many that rely on the Christmas period, trade is dramatically down this year.
It is astonishing that in these circumstances the Government have chosen to cut business support compared with what was available earlier this year. Analysis by the House of Commons Library shows that 99% of hair and beauty salons are receiving less support than in March, along with 95% of cafés, 92% of gyms, and 77% of pubs and restaurants. Do we really want to emerge from this crisis with so many of these vital small businesses closed down or boarded up?
The Government’s planning reforms further threaten the viability of our high streets. Earlier this year, they forced through changes that give developers sweeping powers to permanently remove shops from our high streets, creating dead zones by converting retail units into low-quality flats that can then never reopen again as shops or community spaces. Back in March, the Government promised to fully compensate councils for getting communities through the pandemic, but they broke that promise. That breach of trust leaves councils less able to support the economic recovery in our high streets. According to the independent Institute for Fiscal Studies, councils face a £1.1 billion covid funding gap, leading to in-year cuts and job losses at right now, and there is worse to come next April, with a £4 billion funding gap that means more cuts, more job losses, and less support for economic recovery for struggling businesses and struggling high streets.
If that was not bad enough, the Government appear to be on the brink of the greatest act of vandalism ever inflicted on the British economy in peacetime, with the chaos and catastrophe of a no-deal Brexit pushing up costs, cutting off supplies, and closing down exports. The abiding image of this Government will be a boarded-up shop on a rundown high street. The Prime Minister was not joking when he said “eff business”, because that sums up this Government’s entire approach. The Conservative-led Local Government Association estimates that the Government have cut £15 billion from council budgets over the past decade. The towns fund puts back less than a quarter of that devastating loss. It is better than nothing, and we welcome the funding for towns that have received it, but what is less welcome is why so many deserving towns have not benefited at all. Those high streets, and there are hundreds of them, have been left to slide further into decline because Conservative Ministers deliberately carved them out of receiving any funding. Towns such as Heywood, Halifax and Sunderland surely deserve better than this.
There is a better future for our high streets if only the Government would seize it. The British people want their high streets to be vibrant, lively and thriving places that they can feel proud of. There is a better future where high streets can take advantage of the change in shopping habits to break free of the straitjacket of uniformity. We could encourage more small local businesses by levelling the playing field on business rates. We could create more community spaces, instead of forcing the closure of libraries and community centres by continually slashing council funding. We could work with developers to create more shared work spaces and touchdown desk spaces that reduce the need for commuting, instead of creating dead zones where the shops used to be.
In all the darkness of the pandemic, one of the bright spots for many people has been the rediscovery of a strong sense of community. What an opportunity we have to build back better, to reinvent our high streets for the future as the beating heart of those communities, but instead we are stuck in a cycle of levelling down under an incompetent Government without a vision that matches the ambition of the people of this great country.
Damien Moore (Southport) (Con)
It is a pleasure to speak in this debate. Such is the depth of feeling on this issue of many right hon. and hon. Members that it has been well over-subscribed. Many may get up to talk about their high streets, but no high street has the international repute of my main high street, Lord Street in Southport, which was the basis on which the Champs Élysées was built—the most glamorous street in the world.
Before I go into further detail on that, may I just add that we have great shopping high streets: Ainsdale, Churchdown and Birkdale. You know that, Mr Deputy Speaker, because you have shopped there yourself and took away some great gifts for the people whom you know.
I would just like to thank the Minister and the Government for all the support that has been given throughout the covid crisis. It has been invaluable to many businesses in enabling them to stay open, and we need to move forward into the future with more sustained support. One thing that we all know—this is absolutely clear—is that the internet is the biggest challenge to our high street. It has already been said that a fifth of sales and a third of retail sales during the pandemic have been online. If we were to reverse that trend, there are things that we need to do. We need to have a look at business rates. Business rates need recalibration because it is absolutely clear that, under the current model, businesses will not be sustainable. If we get to grips with business rates, it gives those businesses on our high streets a thriving chance.
When we look at the future of our high streets, we have not only to look at business rates, but to increase footfall. Getting people into our towns, villages and cities is absolutely vital to their survival. The mess that we see in London, where roads are closed and people are prohibited from going down streets, is happening elsewhere. It is happening in my local area as well. I point out to the hon. Member for Croydon North (Steve Reed) that my local Labour council is stopping people from going down streets, from getting to the high street and from getting into the places that they want to get to. People want ease of access. Having worked in retail for 20 years, I know that ease of access is the best way to get people into our towns and cities.
I say to the Minister that we do need to intervene when it comes to parking charges. The biggest issue for every retailer in my town is parking charges. The Road Traffic Regulation Act 1984 says that parking charges should be proportionate, and not undermine the vitality of our towns. In my town, those charges do just that, and I want this Government to intervene on that.
We have a town deal, which is great. Not just Conservative towns, but Labour towns, too, will benefit from this significant funding stream. In our town, this will be matched by the private sector, which has committed more than £300 million if we get the £50 million that we put in for.
Last week, we all went out, I hope, to celebrate Small Business Saturday. That should not be an annual celebration; it should be a way of life, and we should all support our local businesses weekly.
Richard Thomson (Gordon) (SNP)
I do not think there can be any doubt that high street businesses and workers have suffered immensely throughout this pandemic. Despite support, many businesses have sadly gone under. We have already heard about the calamity that has befallen the Arcadia Group and Debenhams, and I might as well mention the Edinburgh Woollen Mill, where 21,000 jobs are at risk. Those collapses have knock-on effects—the supply companies will lose an estimated £250 million in business from the collapse of Arcadia alone—so the vitality of our high streets is crucial to all of us.
It is a truism to say that many aspects of our lives have gone online during the pandemic—working from home and shopping from home, most obviously. That has given those who have been fortunate enough to do that a better work-life balance, and perhaps it has simply accelerated trends that were already in evidence in how we use our high streets and town and city centres. The pace has been quickened.
The change presents a number of challenges for our infrastructure—most notably, how the transport network is configured—and for the footfall in our town and urban centres. We can expect a great deal of upheaval as the way we use those centres to work, rest and play changes in the time ahead of us. It is therefore imperative that we allow the inevitable transitions that are about to take place to happen in a way that does not leave the centres of our towns, cities and smaller communities entirely at the mercy of market forces, with property assets stranded in the hands of those who are unable to develop them or adapt what they own, or who find themselves hide-bound by planning and development objectives that prevent them from responding appropriately to the new reality.
Direct investment from the Government is one way that we can try to facilitate some of those changes. The Scottish Government have invested £4 million for towns, smaller settlements and business improvement districts, and a further £18 million from its economic stimulus package to add to existing funds in the town centre capital fund. Business improvement districts, which bring together local small businesses to work together in the common interest and improve the overall urban environment, have had a tremendous impact. To bring footfall back, we need to bring people back, create a vibrant streetscape and ensure our towns, villages and city centres are as accessible as they possibly can be for absolutely everyone. We must ensure that the services that we desire to access physically are within easy reach of all, whether they own a car or however they transport themselves about. Everything must be within easy reach and as accessible as it possibly can be.
If we want vibrant urban centres, we need a vibrant economy. The UK economy grew by just 0.4% in October. The SNP has today called for a £98 billion fiscal stimulus to match the scale of those that other equivalent European countries have already put in place. The best way to ensure that businesses recover is to allow them to do what they would ordinarily seek to do, so we need to do all we can to help them survive, thrive, adapt and emerge on the other side.
I will talk about some of the measures that we need. We need to stop money leaving businesses. Business rates have been mentioned already. That is what has allowed many retail, leisure and hospitality businesses to cling on in this time. It is absolutely imperative, notwithstanding the review that the Minister spoke about, that that sort of relief for business costs is allowed to continue.
The Scottish Government are absolutely committed to carrying on with that, but because of the fiscal framework, an equivalent commitment needs to happen in England before that money feeds its way through the Barnett formula to Scotland to allow that to happen. The Cabinet Secretary for Finance in Scotland has written to the Chancellor about that to seek clarity about the approach to non-domestic rates in England and future reliefs. I do not believe that a response has arrived yet, but I hope that a favourable response is forthcoming very soon.
We also need to ensure that money goes to people to maintain demand. It was only after immense pressure and the need for a lockdown right across England that the furlough scheme was extended. Although we obviously all have great hopes for the vaccine, the Government must be absolutely clear that if, heaven forbid, further lockdowns are needed, that support will remain for individuals. The £20 uplift to universal credit must be made permanent. We should also look at increasing statutory sick pay to enable people to buy the things they need and keep that demand in the economy.
I have mentioned the vaccine, which will obviously be key to giving people the confidence to come back into our urban centres. I know that the Government have shown a marked aversion to level playing fields over the last few days, weeks and even hours, but we certainly need one in our retail environment. Online retail has certainly brought many benefits to people, particularly through the pandemic, through home shopping, and it has allowed lifestyle businesses to thrive in better times. However, if we get this wrong and do not rebalance taxation between physical and online retail, it will hollow out our town centres. My party has consistently campaigned to close tax loopholes and end corporate tax avoidance. If we can close those loopholes and get a better balance, we could pay for the consequences of the pandemic without burdening and punishing workers, while also maintaining the health of our high streets.
Theresa Villiers (Chipping Barnet) (Con)
Given the hon. Gentleman’s concerns about online retail giants not paying their fair share of tax, does he welcome the extensive action that this Conservative Government have taken, introducing a world-leading digital services tax and leading the international work in the OECD that we need to ensure a long-term resolution to make sure the internet giants pay their fair share of taxes?
Richard Thomson
I absolutely welcome anything that ensures a better balance of taxation, and that example shows the importance of co-operating internationally. Much time has been taken up in this House pursuing a theoretical sovereignty, but we may be about to find some of the limits of the practical sovereignty we can get. However, certainly I am all in favour of making people pay what they can in taxation and doing so on a collaborative international basis.
That brings me neatly on to my next point, which is about tax-free shopping. The Government have announced their intention to withdraw tax-free shopping. That will have a deleterious impact on our airports, particularly our regional airports, and also have a massive impact on tourism. Much of the tourism traffic that comes into all parts of the UK is led, at least in part, by the opportunities for tax-free shopping.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
The hon. Gentleman is making a very important point, which I intend to follow up in my speech. Does he agree that the withdrawal of the VAT rebate will affect all parts of the United Kingdom, particularly in Scotland, including firms such as Johnstons of Elgin, where manufacturing and retailing will be affected?
Richard Thomson
I absolutely agree with the hon. Gentleman, and I look forward to hearing that aspect of his speech. I believe the change could affect anything up to about 33% of sales for the company he mentions, but overall, as well as imperilling the opportunity to develop routes from regional airports, a total of about 40,000 jobs and over £1 billion of investment could be at risk. It is little wonder that the French financial newspaper Les Echos has argued that the UK is in danger of shooting itself in the foot here.
Earlier I talked about business rates, and wholesalers have also been missed out. They are absolutely critical to the supply chain for many of our smaller communities. They have been given some direct support from the Scottish Government, but have missed out on support from the UK Government. I encourage the UK Government to look at including wholesalers in the support available to that part of the sector.
In conclusion, high streets in communities of all sizes face challenges on a number of fronts. We have heard some from the speakers so far; no doubt we will hear new aspects as the debate continues. But with the right Government support, at local government and national Government levels, our town centres have the opportunity to thrive as places where we work, rest and play, and effect the necessary transitions in how land and buildings are used. In Scotland, we would obviously rather the Scottish Government were able to do all that is necessary in that regard, rather than just some. Following some of our earlier debates, it would be far better if, instead of grabbing powers from Holyrood through the United Kingdom Internal Market Bill, the UK Government were instead transferring powers to the Scottish Government, particularly financial powers and borrowing powers, so that they can get on with doing all that is necessary, instead of having to wait for it to happen elsewhere.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. There will now be a three-minute limit on all remaining Back-Bench contributions.
Mary Robinson (Cheadle) (Con)
Lockdown has given us all a preview of life without our high street shops, and has brought that shuttered vision closer to becoming our permanent reality. The pandemic has accelerated pressures that were already threatening the future of high street retail, in particular small independent shops. It has also demonstrated that we cannot simply replace high street shops with online commerce; it is self-evident that we cannot get a haircut online.
Online shopping does not have the capacity in storage or delivery to carry the entire retail sector on its back, but we must address its competitive advantage. The digital services tax introduced earlier this year has helped level the playing field, but it does not rebalance the burden of business rates, and although relief has been helpful, businesses in Cheadle would welcome it if the Minister considered a more permanent solution.
To truly thrive, high streets need local communities and local involvement to build the right infrastructure and plan for the future. The future high streets fund and the towns fund, through which Cheadle has already been allocated £500,000 in the accelerated scheme, will help. High streets should be accessible, with parking and electric charging points for the cars of the future and good public transport links. That is why Cheadle’s towns fund bid includes a new station connecting it with nearby communities.
Covid forced businesses and employees to do things differently; by moving out of the office and into home working, communities have rediscovered their local high streets. For many, the shift to home working will be permanent. That presents an opportunity for future high streets and businesses in the Zoom towns of the future to do things differently too.
I do not believe that we should rush to restore the pre-pandemic status quo, as it was not working before for many of our high streets, but we need to build back better and reimagine for the future. Retail expert Bill Grimsey has used his 45 years of retail experience to offer thought-provoking ideas for making our high streets succeed amid the tech revolution. His reviews have informed the reports of the Housing, Communities and Local Government Committee, of which I am a member. They highlight the importance of local authorities, viewing high streets as community hubs bringing together not just retail but entertainment, the arts, leisure, health and education. That will require support for our arts and culture sectors, and the funding we have already given must be followed up as we emerge from the pandemic.
It is important that we get behind our local high streets, our local high street shops and our businesses. Without them, the vision of closed-down communities and closed-down high streets will be a permanent feature of our local economies, and we must avoid that.
Jane Stevenson (Wolverhampton North East) (Con)
It is a pleasure to follow my hon. Friend the Member for Cheadle (Mary Robinson).
Over the past 10—even 20—years, we have seen the rise of out-of-town retail parks, supermarket superstores and, of course, internet shopping. As we have heard from several other Members, now is the time to look at business rates, at potentially introducing an internet sales tax and at addressing parking charges around high streets.
One solution for creating demand on our high streets is to have more people living around them. In the Black Country, there is a real need to protect our green spaces as we build the extra homes that we require. We can achieve that with a brownfield-first policy, but also by getting more developments and converting the upper floors of retail spaces around our high streets. It is very sad that in Wolverhampton our beautiful department store Beatties will soon close its doors, but it will survive as mixed retail and residential accommodation.
To future-proof our high streets, they need to offer things we cannot access from other retail options. Service industries continue to prosper—beauty salons, hairdressers, pubs and cafés—and I would like to see the service offer expanded. Modern consumers are more likely to spend their money on experiences and socialising, perhaps learning a skill or attending an event. I would like to see bakeries offering cake decorating classes and people heading to the high street for music lessons or choir practices. They can evolve as community hubs, as well as retail spaces.
This Small Business Saturday, I met Andy Street at Three Tuns in Oxley to talk about regeneration and the need for high streets to be attractive places to spend time in. I warmly welcome the Government’s towns fund, which will help to regenerate our cities; Wednesfield in my constituency should benefit. I would like to especially thank Jay, Nicola and Max at Elegant Frames, Lavandula Blu and Juicy Fruits—local businesses in Wednesfield—for giving up their time to contribute to the high street fund debate. They are typical of our fantastic small businesses.
Surrounding such existing businesses with an increased leisure, retail and social opportunity will protect them for the future. They offer us a level of customer service we do not find in large retailers. I thank many of my small businesses, which were absolute heroes during the pandemic. They innovated with telephone orders and home delivery to vulnerable people who needed to stay at home. If this year has taught us anything, it is the need for human contact and interaction. I am hopeful that, as we recover, we will value our high streets as community spaces and that they will prosper in future.
Ian Paisley (North Antrim) (DUP)
Ballymena in my constituency has for years traded under the strapline of the best shopping town in the country. I have the pleasure of sitting on the town centre committee with many retailers from the town centre, and I cannot help but be enthused by their undiminishable spirit and desire to make sure that, no matter what crisis is thrown at them, they will rise above it. They have demonstrated that throughout the crisis period faced by the retailers on our high streets. We have to salute them for that spirit of optimism and for keeping going on, no matter what.
Those retailers tell me very clearly, however, that there is a huge crisis; we have already heard from other Members about footfall being down considerably. I am told by 80% of the businesses in the town centre in my constituency that takings are down by over 70% during this period. Put simply, traders cannot afford to continue if that trend is allowed to continue. Our town centre has turned very quickly into a place where we have empty shop units, which look like missing teeth from a sad face. Whenever we see that, it shows there is a huge crisis in the town centre.
We also see the Government spending money on gimmicks. I drove up a street in Belfast the other day. Huge roadworks were going on, with a road sign saying, “New road layout in operation for social distancing traffic”. I kid you not. I have retailers in my constituency saying, “Spend the money, but spend it sensibly. Don’t put it into rubbish like that.” Let us see this money being invested properly in our high street.
There is absolutely no doubt that covid has had many unintended consequences. Unfortunately, it has, in many ways, turbo-charged the potential demise of the high street. People have moved on to the virtual high street and are spending their money there. We want to make sure that our high streets get back their café culture: that culture of being able to shop there, of allowing charities to collect money, and of being a real part of the community and having that social interaction.
I therefore ask the Minister to put in place a strategy, a plan that puts: banks behind the eight ball and makes them wish to help retailers; addresses the issue of rate relief long term; encourages and champions the development of our high street; promotes people living in our town centres, as has already been said; and sees their growth once again. We stood and said, “Let’s save the NHS.” Retailers want to hear the Government now saying, “Let’s save our high streets.”
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I wish to devote the bulk of my speech to dealing with the decision by the Treasury to withdraw duty-free shopping in this country and VAT rebates, the so-called VAT RES, or, as some in the popular press have dubbed it, the “tourist tax”. I fully support the Chairman of the Treasury Committee’s call for a comprehensive reassessment of the matter. Indeed, in its hearing on 1 December, the OBR said it had given the policy its highest possible uncertainty rating.
The OBR also said it had no confidence in the Treasury numbers, that HMRC had no data of its own on the cost of VAT RES, that HMRC was wrong to assume that introducing a 20% tax would have no impact on visitor behaviour and that the OBR had assumed a price inelasticity of 1.9. Finally, the OBR said that there had been no consideration of the knock-on impact on associated sectors such as hotels, and no taking into account of any falls in VAT from fewer and shorter trips from wealthy visitors to this country. We must be crazy to want to deter wealthy overseas visitors from coming here to stay in our hostelries and from spending a lot in our shops.
There is a common perception that this measure only affects Oxford Street and Bond Street; in fact, as I said to the hon. Member for Gordon (Richard Thomson), it affects the entire United Kingdom. It will affect companies such as Mulberry, Burberry, Church’s, Johnstons of Elgin in his constituency and, in fact, the whisky industry in Scotland. That is losing jobs. It is estimated, as he said, that up to 40,000 jobs across the UK could be lost by this decision, which will affect regional airports, manufacturing in Blyth, Yorkshire and Somerset and high-value shopping areas such as Edinburgh, Dundee, London, Manchester and Leeds.
I call on the Treasury to think very hard about this decision. Even if the hon. Member for Gordon and I are wrong, and the decision does not cost 40,000 jobs, it may still cost half that—20,000 jobs. The Red Book states that the decision may cost half a billion pounds—the industry does not think it will—but that is chickenfeed compared with the loss of those jobs.
In the second part of my speech, I will speak to my constituency. In Cirencester, the biggest town in my constituency, 41 shops have closed or are about to close. In all my small town centres, half a dozen shops are going to close because of covid—that is about 60 shops, at least. As I did in a question in the House last week, I call upon the Minister and all tiers of central and local government to come together to have a massive exodus on to our streets when it is covid safe to do so. That can be done through a range of measures. The Minister was right. We are pleased that the Government have put so much money into our high streets through the towns fund, but we also want other measures such as car parking, broadband and rates reform.
Bambos Charalambous (Enfield, Southgate) (Lab)
This has been a terrible year for our high streets, with covid-19 restrictions affecting over 95% of the UK, and many people working from home and choosing to shop online. A perfect storm has formed, which has forced many high street shops, pubs, restaurants and cafés to close and has left others to struggle. We should remember that our high streets were struggling even before anyone had ever heard of covid-19. In the seven years up to the end of 2019, footfall in our high streets had fallen by 10%. Over the past decade, there has been a 21% rise in online retail sales, which have soared to 33% of all sales during the pandemic.
Last Friday, I visited a florist, a fishmonger and a delicatessen—all small independent businesses in my constituency of Enfield, Southgate—and they told me they were struggling. Some of their concerns, aside from accessing the covid-19 business grants, included business rates, high rents, unfair competition from online competitors and the physical state of high streets.
We should remember that going to the local high street to shop or eat was never just a transactional activity; it also had a social side to it. It was a focal point for the local community, and it needs to become that once again. The whole high street experience needs to be radically different from online shopping. I am a big fan of pop-up shops, but they often have to overcome bureaucratic obstacles to set up. The state of the high street also needs to be improved. Local councils are best placed to deliver both those asks.
I heard the Minister talk about the local high streets taskforce. The £3.6 billion towns fund is welcome, although it will not help all towns, but when compared to the £15 billion that the Local Government Association estimates has been cut from local authority budgets in the past decade, it is a case of putting a sticking plaster over a gaping wound.
As consumer habits evolve and change, the high street also needs the flexibility to change, too. That is why I urge the Government to rethink any relaxation of planning laws and permitted development rights to make it easier to convert retail and office space into accommodation. To make our high streets sustainable, there needs to be a critical mass in footfall. By reducing the number of retail units, that critical mass hits a tipping point beyond which there is no return. The Government have said much about levelling up, but unless they level up taxation for online transactions, the high street will forever be at a disadvantage, unable to compete with the online tech giants.
In conclusion, our high streets are struggling and we need urgent action to support them, not only through the covid pandemic, but beyond. To do that, we need to support not only our small retailers and the hospitality sector, but local councils and communities. We need to have a long-term vision for our high streets, and make sure that the one in 10 empty shopfronts is open and ready for business, allowing our high streets to thrive once again.
Sir William Cash (Stone) (Con)
Cheadle, in my constituency, also falls within Staffordshire Moorlands District Council. I asked for Cheadle to be included in the Government high street project, and I am glad that was agreed. However, SMDC has decided to package an additional set of contentious objectives into the mix outlined in its Cheadle town centre projects report to its cabinet on 6 October. This includes many of our main community assets, with the prospective closure of the South Moorlands leisure centre and of the community Cheadle Hospital, and prospective housing on our town centre car parks. I asked before the cabinet meeting for proper consultation, but my request to have a statement read out was refused. I proposed a local referendum on all this. The district council commissioned two sets of consultants in 2016, without discussion or engagement with the affected community. The lack of transparency on the brief and objectives used to commission these reports and on the full reports themselves is of great concern.
What is clear is that a plan from 2016, predating the reports, does not align with Cheadle’s community aspirations. The reports have cost £60,000, without proper consultation, and it is taxpayers’ and my voters’ money that has paid for them. The cabinet at SMDC has produced a stakeholder panel and delivery board within the prescribed set of limited options. The reports prescribe a stakeholder panel that omits key users of the facilities and is subservient to the delivery board; it contains only one member of the stakeholder panel, so the outnumbering is at least three to one. The delivery board has priority over the stakeholders. There is a set of prescribed options extracted from the yet-to-be-seen full reports. There is no assessment of the costs or environmental impact of demolition. There is already a petition of 4,400 signatures for the retention of the leisure centre. I ask the Minister to take appropriate steps to ensure and guarantee proper consultation for my constituents, and to hold SMDC to account. It is part of my constituency. I have two other councils in my area, Stafford Borough and Newcastle-under-Lyme Borough Council, and I have not had difficulty with them in this respect. I ask the Minister to take note and ensure that value for taxpayers’ money is properly achieved and that we have proper consultation. That is what we are asking for, because if we can have proper consultation, these projects—this levelling up—will all work, because people will know that they are getting the results that they have expected. It is terribly simple; it is just called proper consultation. Can we make sure we get it?
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Let me take a moment to praise those of my constituents and elsewhere who are in the frontline of retail and our high streets; it is a rewarding job but it can be tough. I spent many years as a retail employee on the shop floor, but I cannot imagine the difficulties they have had to face this year.
Without doubt it has been an incredibly difficult time for those working on the high street, and for businesses there. In the highlands, some 90% of registered businesses are small businesses. They are not just places we go to shop, be entertained and enjoy ourselves; they are absolutely part of the fabric of what we have in our high streets, towns and villages, and in the city they are much loved institutions. We are talking about innovative people who develop businesses that always give us a warm welcome. Obviously, they are joined by national retailers on the high streets, but with the recent demise of some of the big players they lose the opportunity for additional footfall. So we need in future to concentrate heavily on what we do to provide support. This has now become an urgent issue for us all to pay attention to.
We have heard time and again in the Chamber that the demise of the high street is not new and that it is something that we have seen coming, but it has been accelerated to the nth degree. I echo the comments of my hon. Friend the Member for Gordon (Richard Thomson), who spoke about the Scottish Government having done everything they can to provide necessary support. There is a madness in cancelling the duty free allowances from the UK Government, and they must take more measures so that we can take more action ourselves, especially over simple changes to the borrowing rules to help those who need it.
The high street is not dead. It simply needs to evolve. In my constituency, independent retailers are some of the best examples of innovation, and they are reaching out to their customers—many through their own websites now. I urge us all to do what we can. I hope that the light at the end of the tunnel will be us becoming more conscious consumers. We want to support the right businesses doing the right thing. Ethical and local purchasing, and an increased awareness of our own carbon footprint, should naturally drive us to our own independent retailers. There is lots that the UK Government can do. The Scottish Government must do more. Local authorities must work together with business communities, developers and residents to redesign our high streets, and businesses themselves should be recommending each other to other businesses.
There is much more I could say, but three minutes is not enough to cover this subject in detail. We must all do more to support the high street and retailers in our local communities.
Theresa Villiers (Chipping Barnet) (Con)
As everyone has acknowledged, high streets have had a tough time for several years because of the shift to online shopping, and that trend has been intensified by the covid outbreak. Throughout my time in Parliament, I have tried to campaign in support of local town centres such as High Barnet, New Barnet, East Barnet, Hampden Square, Whetstone, Friern Barnet and all the other small shopping parades in my constituency. I pressed for reductions in business rates, and was pleased to be able to help persuade the previous Chancellor, Philip Hammond, to do that in two successive Budgets. But I do think that the Government need to go further to reform the system in order to reduce business rates for small independent retailers, and to ensure that the big online retailers pay their fair share of tax.
I welcome the introduction of the digital services tax and the international work being led by the UK Government on this important issue, but if our high streets are to survive and thrive, we need urgently to get to the end of this covid crisis. The Government’s programme of covid support has been bigger than anything ever attempted in our nation’s history, including an 18-month business rates holiday, furlough for 9.6 million jobs and £11 billion in business grants. But the only way to safeguard the future of our high streets is to get hospitality businesses fully reopened, especially the wet pubs, which have suffered the greatest restrictions over the longest period. We now have rapid mass testing and the delivery of the vaccine, so I urge Ministers to get covid restrictions lifted the moment that it is safe to do so, including the controversial 10 pm curfew. Let people get back to the pub for a few drinks with their friends and family once again—and please, please, please do not put London into tier 3.
If our high streets and town centres go into terminal decline, it would be a huge loss to our society and our communities. If we value them, we need to use them. Therefore, I encourage everyone, in a covid-secure way, to head out to their local shops, restaurants and pubs, both in the run-up to Christmas and in the months to follow. Our local businesses and high streets need us. It is time to back Barnet and give them our support.
Navendu Mishra (Stockport) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, and I thank my union, the Union of Shop, Distributive and Allied Workers, for campaigning so powerfully to support our high streets, particularly the retail workers, who are all too often among the lowest paid and employed on precarious contracts. As a former retail worker on the shop floor, I take a great deal of interest in the future of Britain’s high streets and the health and prosperity of our town and city centres.
This is a crucial debate, at a time when our high streets have been stretched to breaking point by the latest lockdown and by the failure of this Government to provide meaningful financial support, resulting in the closure of tens of thousands of businesses, millions being forced into unemployment and the deepest recession in our history. The unique character of the high street is important to our communities, and its survival is vital for our local and regional economies.
Let us take Stockport market in my constituency, where people have been trading for more than 750 years, and which can trace its history back to the middle ages. It is part of the fabric of our town; if hon. Members are ever in Stockport, it is well worth visiting the beautiful Market Hall when it is in full flow on trading days, and taking time to speak to the traders who make the town tick. I often stop by O’Mara’s café to speak to the owner, John, when I am out and about in the constituency, as well as those working so hard in Stockport’s Market Hall.
Indoor markets such as the one in Stockport are full of small, independent traders, who make our communities unique and offer a diverse alternative to the clone towns that we have seen spring up across the UK in recent years. Stockport Council has an exciting vision for our town centre, with a £1 billion investment programme that will see new homes, new forms of transport, leisure outlets and jobs. I pay tribute to the council staff who have worked so hard to make that a reality. If hon. Members are not aware of the Stockport Mayoral Development Corporation, they should look it up; it is a blueprint for the future of town centres, with mixed retail and housing.
Unfortunately, the reality is that without meaningful support, the efforts of council staff will only delay the inevitable. The lack of support for these traders from this Government since the start of the covid pandemic is nothing short of scandalous. The grants and furlough scheme have proved to be little more than a drop in the ocean, leaving the vast majority of small businesses and traders struggling with rent payments and fixed costs. It should come as little surprise, then, that USDAW researchers revealed that there have been more than 200,000 job losses and 20,000 store closures this year alone in the retail sector.
The sad demise of the high street is the result of an unlevel playing field rigged in favour of online retailers, who have little in the way of overhead costs such as shop rents and are able to undercut high street retailers. The recent collapse of Arcadia Group put 12,000 jobs at risk and further hollowed out our high street. That followed the closure of Sainsbury’s on Warren Street in my constituency, which saw a further 87 hard-working staff put at risk just days before Christmas and the new year, despite Sainsburys’ having announced record profits in recent months. I am pleased to hear other hon. Members suggest an online sales levy, which could be set at 1% of online sales and would raise around £1.5 billion. The money generated by that could help to offset a cut in retail business rates of around 20%.
Felicity Buchan (Kensington) (Con)
The need to rejuvenate our high streets is an issue that I am sure unites this House across party and across regions, whether we represent small towns or a major metropolis. I also think there is probably a fair amount of consensus about how to do that. I will talk briefly about my vision for high streets and about business rates and the VAT RES.
The reality, as many colleagues have said, is that the high street is changing and there are many shops that, sadly, will not be viable going forward, so we need to recreate the concept of the high street. That will mean more leisure, more hospitality and, indeed, even more housing. The high street needs to become a destination and an experience, rather than simply a shopping event.
Turning to business rates, I believe we need fundamental reform—indeed, I believe we need a significant reduction in business rates. If we look back to 1990, business rates and corporation tax were both at 35%. Corporation tax is now at 19%, but business rates are at 51%. There is no rationale for that discrepancy. If we think about it, business rates are a fixed cost; they have nothing to do with the profitability of a business. I strongly recommend that the Treasury review business rates, and I think doing so would be in the Treasury’s long-term interests, because we need to preserve jobs on our high street. As the Chancellor says, it is all about “jobs, jobs, jobs”.
In my own constituency, we are particularly affected by business rates. The one tiny borough of Kensington and Chelsea and the neighbouring borough of Westminster make up 10% of the entire country’s business rates, just because our property values are so high. However, the cash flows in our shops are basically the same as the cash flows in shops all around the country, so we need that review. I have only 20 seconds left, so I just want to say that I strongly urge the Government to review the VAT retail export scheme. At a time when we are global Britain looking out, we need to be attracting international visitors to our high streets, our hotels and our restaurants. Our high streets have hope, but they need our support.
Tim Farron (Westmorland and Lonsdale) (LD)
The town and village centres in South Lakeland, in the lakes and in the dales and the communities around, them are spectacular places. They are part of our hospitality and tourism offer, as well as serving the communities that are permanently with us, but the impact on hospitality and tourism in the last nine months has been colossal, and the impact on the town and village centres of the south lakes has also been colossal.
The health of the retail, hospitality and tourism sectors in those towns and villages is absolutely essential, and as we move through the next few months towards what is hopefully the conclusion of the covid crisis, I want to urge the Government to be far more generous towards those businesses, because many of them are at risk and many have already gone out of business. I have seen a sixfold increase in unemployment in my constituency. At one stage, we were the furlough capital of the United Kingdom. Those businesses in our town and village centres throughout South Lakeland are healthy and have a future, and I would like the Government to back them so that when the recovery comes, we have not dead businesses that are empty and unable to step up to the plate, but lively, vibrant businesses that are ready to lead the recovery.
I join those who are saying that business rates are crucial. They really are, and the Government should not pat themselves on the back too much over the digital sales tax. Business rates net £25 billion a year. The digital sales tax, according to the Government’s best estimate, will raise £0.5 billion a year. What we need is the full-scale abolition of business rates, their replacement by taxes on revenue and sales, and measures to ensure that the online giants are no longer being subsidised by independent shops in our communities up and down this country. I was talking to a constituent of mine, a business person who owns a number of businesses. He told me that the rateable value of one of his premises, which he is having to close, was £250,000. The rent that he pays on that business is a fifth of that. This distorts the price of operating physically in our town and village centres. That is why business rates must be abolished, and this is the moment to do it.
I also want to make the point that while the independents are crucial—we have loads of them in the south lakes—so are the chains. When Beales closed down in Kendal, it removed footfall from the rest of the community as well, so let us make sure we support our high streets and town and village centres for our independents, but also for our chains.
Finally, in rural communities such as mine, where one in four people work for themselves, the economy is like an ecosystem. The health of the town and village centres—their poor health at times—is made worse by the fact that 4,500 people in my community are being excluded from support by this Government. The Government’s failure to back those people, many of whom who run their own businesses and who should be the backbone of any recovery, is costing them and their families, and it is also costing our town and village centres.
Sir David Amess (Southend West) (Con)
We used to be a nation of small shopkeepers. I no longer think that is the case, but thank goodness for our wonderful Asian community who keep all our little shops going.
When I was the Member of Parliament for Basildon, we had the largest covered shopping centre in Europe. Then that accolade moved to Thurrock Lakeside. Then it went to Bluewater, and then to Gateshead, but it is no longer really cool to have covered shopping centres.
In our household, I tend to do the supermarket shopping, and the reason for that is that I like to see what I am buying and I like my bargains. But like everyone else, we have been hit by the double whammy of online retail shopping and the effects of the coronavirus pandemic.
Amazon flights come into Southend airport. We have five of them during the night, so they are not doing local residents much good because they are disturbing them. They are wonderful for Amazon, of course, but Amazon, along with other large online retailers, has taken advantage of the pandemic to grow its business while still avoiding paying taxes or just paying a fraction of the taxes it should, based on the money generated by its UK sales. Our Government should certainly see if they can apply a bit more pressure. High streets, Southend included, have more and more empty shops—we cannot exist just on charity shops—and although the business rates holiday has helped, it needs to be extended beyond March.
Independent retailers should be at the heart of any high street, and I am privileged to have the Broadway in Leigh in my constituency. My predecessor Paul Channon, and his father Chips Channon, used to shop regularly in Leigh Broadway with the late Princess Margaret. We have a wonderful range of quirky, creative and unusual shops and galleries, which attract visitors from all over Essex. As in other colleagues’ constituencies , however, department stores are difficult to sustain now, and our high street was hit when we lost Keddies. Losing Debenhams is another big blow.
Local councils need to do more to assist the retail industry. Southend council has led the way by offering free parking for shoppers in the run-up to Christmas. Convenient parking in high streets is vital to continued success, as the majority of shoppers who visit those businesses physically tend to be older people who do not wish to shop online—we cannot all shop online, frankly. Their needs should be recognised, and the drive to ban the car from shopping centres should be reversed.
In order to maintain a thriving local retail economy, the Government and local councils should work together to ensure that the business climate and the infrastructure are there to support it. In Southend, there are plans to concentrate the retail outlets in a smaller area, and to have some high-quality housing, but the best thing that the House of Commons can do is to join together and shop locally.
Liz Twist (Blaydon) (Lab)
Like many other hon. Members, earlier this year on Independents’ Day, I spent the day visiting local shops in my community: businesses such as Stobo’s fruit and vegetable shop in Crawcrook, Simply Local in Sunniside or the Paris Dress House in the Metrocentre—a whole range of them. Last Friday and Saturday, Small Business Saturday, I visited places such as TLC Laundry Services on the high street in Birtley. Unlike many constituencies, Blaydon has many small towns and many small parades of shops. It is vital that we do not forget those smaller groups of shops when we talk about our high streets, because they are the centre of our local communities.
I am particularly keen to talk about retail and shopping in the high street, because in my constituency of Blaydon, 28% of jobs are in the retail sector—I used to say that it was about a quarter, but the latest figure from the Library shows that it has increased as a proportion—and there are many more than that in hospitality on our high streets. So our smaller retail centres are hugely important, although in Blaydon we also have the Metrocentre, which, if I may correct the hon. Member for Southend West (Sir David Amess), I believe is still the largest covered shopping centre. That, too, is hugely important to us for jobs, although it is going through some difficult times, like the rest of retail.
In fact, the House of Commons Library tells me that there are 520 retail sites across Blaydon, centred in Blaydon, Birtley, Whickham, Ryton, Crawcrook and Sunniside, each with a range of retail, leisure and hospitality. As we have heard, all of them face challenges from the internet and covid-19. It is vital that we support those businesses to keep going. I also want to say something in support of charity shops, because they are now an important part of our high street and themselves face difficult times because of covid-19.
Finally, the retail workers who work in those shops are key workers. They are the people who were on the frontline, ensuring that we got the food. They stocked the shelves so that we were able to carry on during the lockdown, and that was often without recognition or a lot of safety features. Today, I hope that we will recognise the work of those shop workers in keeping our communities going.
Mike Wood (Dudley South) (Con)
As the Minister so rightly said, our high streets are not just economic units that provide much-needed prosperity and create valuable jobs; they are at the heart of our communities. They are key to local identities and they bring people together. When our high streets and town centres are strong, our communities are stronger. When our high streets struggle, it puts additional pressures on our communities. We see this in high streets around my constituency, whether it is in Kingswinford, Brockmoor, Pensnett or Netherton, but perhaps the struggles facing our high streets and town centres can best be seen in Brierley Hill, the largest town centre in Dudley South.
When Brierley Hill high street grew and thrived either side of the second world war, the local economy was based largely around the Marsh & Baxter sausage factory in Brierley Hill and the Round Oak steelworks. As those two major employers declined through the ’70s—the steelworks was replaced by the intu Merry Hill shopping centre in the mid-1980s—instead of there being a large customer base, there was suddenly competition on the doorstep, which again provided enormous numbers of jobs but put further pressures on high streets. Since then, even Merry Hill has faced increasing competition from the move to online retail and the pressures that that has brought.
If high streets such as Brierley Hill are going to succeed, they need to be able to adapt to modern shopping trends and the realities of the economy in the 21st century, not what we might wish we could turn our local economies back to. This is where the future high streets fund is so important, and it is why I think that Brierley Hill’s bid for that fund is such a strong one. I very much hope that the Minister will be able to visit Brierley Hill with me to see why it is such a strong bid and so desperately needed.
Our high streets will need to be able to offer something that online retail cannot. That means an experience. A large part of that is hospitality, and, as the Minister knows and has heard, hospitality has faced particular problems through this pandemic. It is important that it is allowed to reopen as soon as it safely can, but short-term support is needed. In particular, as we look at Christmas, it seems ludicrous that we are sending families together, in household bubbles of three households, into the most dangerous places—private homes—instead of allowing them to mix in those three household bubbles in well regulated hospitality venues.
Wera Hobhouse (Bath) (LD)
I spent Small Business Saturday celebrating small businesses in Bath, but this is a very challenging time for our high streets. Many landlords are trying their best. British Land, which owns the SouthGate shopping centre in Bath, has deferred £40 million of rent and cancelled £3 million in rent owed by its smaller retailers and restauranteurs, but the council, which is also a major landlord, cannot do the same. The money that it receives from rents helps to pay for social care, bin collections and investing to make Bath a net zero city.
The truth is that covid-19 has merely accelerated changes that were already taking place, and if we want to give shops and high streets a future and are serious about saving retail jobs, we must fix what is not working. The problem is overhead cost differences between running a high street business and running an out-of-town online business. It is cheaper to sell online or, to put it another way there is not a level playing field, and that needs fixing.
The pandemic has shown us the great social value of our shared spaces. The report “Health on the High Street”, which was co-authored by the NHS, says that our experience since covid has galvanised the idea of the high street returning as a community hub. We need to think differently about how we design and create vibrant, thriving high streets. Not only do we need, therefore, an immediate reset of a level playing field between the high street and online businesses, but Government must start to recognise the community benefit of our high street. There has been a lot of discussion about the mental health damage from the pandemic, and I am sure that high streets will play an important part in the future wellbeing of our citizens.
In Bath, the council has done everything it can to support small businesses, but there is a limit to what is possible without further support from central Government. I ask once again for the Government to follow through with their promise to local authorities, so that they do not have to choose between supporting their high street and providing essential services.
Miss Sarah Dines (Derbyshire Dales) (Con)
This Government must continue to expand the agenda for our high streets. Having left the EU and, soon, the transition period, we have a unique opportunity to frame a radical new agenda regarding reform of the planning system, the rate system and VAT and encouraging innovation. I know that the Government are focusing closely on what they can do to provide better opportunities for our small independent businesses, but I want them to do more. I want to see the Government broaden the focus of their levelling-up commitments to consider how best to support smaller towns and high streets, such as Ashbourne, Bakewell, Matlock and Wirksworth in my constituency. It is important that the areas that do not benefit from the Government’s excellent headline schemes, such as the towns fund, are still considered in their plans and objectives.
On the high streets of Derbyshire Dales, we have a fantastic, diverse range of businesses such as Hambridges Butchers in Matlock, the Bakewell Cheese Shop, Quirky Antiques in Matlock, Peak District Yarns in Tideswell, the Green Man complex in Ashbourne and, last but not least, Carly Hair in Wirksworth. These businesses are the backbone of the high street and need our backing. These are hard-working entrepreneurs. They need to be free of red tape, and they need to be encouraged to thrive. We need to abolish car parking fees in this sort of town environment, and we need broadband everywhere, even in rural high streets.
Following our departure from the EU, it is our responsibility here to help our small businesses, because they need to be free to help themselves. I hope that this Government and this House will take a lead in encouraging national support for British foods, services and products. I have stuck to my time limit this time, Madam Deputy Speaker, but I have one final plea: please can we get Derbyshire Dales out of tier 3 soon?
Taiwo Owatemi (Coventry North West) (Lab)
My home city of Coventry was placed in the most restrictive tier, tier 3. That news came after weeks of steadily declining transmission rates, and my constituents cannot understand why their high street businesses are suffering from financially crushing restrictions when in places such as London, where covid rates have risen steadily for weeks, businesses are only under tier 2. Coventry’s high street matters just as much as Oxford Street, and that truth must be reflected in how the Government choose to apply covid-19 restrictions, instead of the last-minute, non-uniform way they have done it so far.
While it is true that the high street faces difficulties due to a long-term shift in the way that people shop, many high street businesses are in less immediate danger of being supplanted by modernising trends than they are by the lack of pandemic-related support. As Coventry has opened more museums, restaurants and other high street businesses, the Telegraph Hotel was meant to open in October to accommodate an expected increase in tourism. After lockdown-related delays in its opening, it had to stay closed because of tier 3 restrictions and cancel the hundreds of reservations already made through Christmas. The Telegraph spent millions of pounds to not only preserve the beautiful post-war newspaper building it occupies but to construct outdoor terrace space to make it covid-safe. Concerned about the uncertainty of future guidelines and unable to access covid funds, its business is suffering.
Businesses such as the Telegraph are not just part of the high street; they attract customers to their neighbour businesses as well. We must do what we can to support them and not hang them out to dry. An antique sleigh ride outside the Transport Museum is an annual Coventry high street attraction. Because of the pandemic, sleigh rides will not be feasible this year. However, one businessman in Coventry invested £50,000 in a virtual reality sleigh, so that people out shopping could take covid-safe turns on the VR sleigh ride. Unfortunately, under tier 3 restrictions, he was told to cancel the operation.
It is of course crucial to ask what we can do to ensure the future of our high streets. However, in my city, resilient business owners with dedicated business improvement districts and networks of supportive neighbours have already been coming together to find ways to preserve the experience-driven businesses that keep high streets at the centre of our community. Perhaps one of the most important things we can do to help them is not to stifle them in their efforts. Moving forward, I call on the Government to provide a business support package that reflects the level of business need and the severity of restrictions in different areas.
Zarah Sultana (Coventry South) (Lab)
Coventry city centre is the beating heart of the city—a place that provides community, culture and character—but, like other city centres, it is struggling. Long-running trends of empty high streets have been exacerbated by this pandemic. Just before it hit, IKEA announced the closure of its flagship store in the city, and now it has been joined by the likes of Debenhams in facing closure. Across the country, more than one in eight high street shops now stand empty. Last year, 57,000 retail jobs were lost; this year, the figure is 200,000. While Coventry City Council is investing heavily in the city centre, right now shops, pubs and restaurants are struggling under tier 3 restrictions. I voted against the Government’s measures, in part because the economic support is totally inadequate. So again, I say to the Government: give businesses and people in tier 3 the financial support they need to weather this storm.
While this pandemic has pushed workers into poverty and forced small businesses to close, for mega-corporations and their super-rich owners it has been an opportunity to exploit. They are using this public health crisis to entrench their dominance, drive out competition and grow their obscene wealth. Take, for example, Amazon and its billionaire owner, Jeff Bezos. Now with a corporation worth more than $1.5 trillion, Bezos’s wealth has soared since March. It is up $66 billion in the last eight months, meaning that he could give every single Amazon worker a bonus of $105,000 and he would still be as rich as he was at the start of this pandemic.
This grotesque wealth and Amazon’s growing dominance are of course connected with our struggling high streets, because Amazon has not got where it is by playing fair —quite the opposite, in fact. While workers and small businesses pay their tax, Amazon’s tax dodging is pretty legendary. Just last year, on revenues in excess of £13 billion, Amazon paid just £14 million in corporation tax. Its profits are up 35%, but its tax bill just by 3%. This is not a level playing field, so it is no surprise that small businesses and high streets cannot compete. Its employment practices are no better. From being forced to urinate in bottles to meet targets to almost daily calls to the emergency services to treat exhausted staff, Amazon’s workers describe being treated like “robots”. It is their labour that makes the company’s wealth, but it is Bezos who takes the wealth. To level the playing field, it is time we put an end to these unfair practices. It is time Amazon paid its fair share of tax, respected workers’ rights and paid a fair share. For the sake of our small businesses, workers and the public purse, it is time to make Amazon pay.
Matt Vickers (Stockton South) (Con)
I would like to thank retail workers across the country who, while the rest of us retreated to the safety of our own homes, rolled up their sleeves, went out there, applied the restrictions and got on with it.
I earned my spurs at Woolworths, and I am only too well aware of the fall of our high street giants. I have the honour of co-chairing the all-party parliamentary group on the future of retail, and, having met some of the retailers, I have seen at first hand the challenges they face, but also the incredible passion they have to find solutions to these problems. Our high streets and town centres are changing, but continue to have an important role at the heart of our communities. They are a focal point that brings people together and gives our settlements identity, and are the place where many youngsters get their first job.
There is no denying that our high streets need to adapt, change and be repurposed, and I am glad that the future high streets fund and the town deals are allowing this to happen. Retailers across the country have welcomed the incredible package of support available during the crisis. I am glad that the Government have committed to a fundamental review of the age-old, all-consuming issue of business rates. The business rates holiday has been a lifeline for many retailers, and we must not whack them with the full pelt of business rates in April. We need to act now to assure retailers about what will happen next year, but also look at how we fundamentally reduce the long-term burden on our high streets. We need to be ambitious in the review, we need a significant reduction and we perhaps need to differentiate between sectors and geographies.
A lot has changed in the past five years, but the valuations that we use to determine business rates have not. We cannot go on taxing people based on historical rental values; at the very least we must ensure that any levy is based on current and regularly assessed values. Business rates deter investment, and businesses are forced to consider them alongside the viability of any extension or improvement to their premises. Let us reduce the burden, encourage investment and go for growth.
Our high streets are changing, not dying: there are great examples of innovation that must be celebrated and encouraged. I recently met the Booksellers Association and heard about its growing membership as more independent bookstores, such as the amazing Drake in Stockton, open throughout the country. I have seen at first hand the emergence of a micropub scene in Stockton, going against the grain, filling empty shops and bringing life to the town centre, and the emergence of enterprise arcades such as the Pop Up shop in Yarm or the Fountain shopping centre in Stockton—emporiums of amazing independents, offering up their goods and having a go to see where their retailing dreams lead.
Shopping cannot be replaced by clicking—you cannot feel it, touch it, see it or smell it—and there is no replacement for customer service, expertise or banter. Let us support our nation of shopkeepers, back our high streets and shop local.
Rachael Maskell (York Central) (Lab/Co-op)
Our identity is drawn from the places where we live and our high streets are very much part of that, so the eerie emptiness of our high streets at this time must present a new opportunity to re-imagine our high streets.
York has the worst-hit high street in the country, so we are really feeling the pain. Some 65% of York is made up of independent businesses, and Indie York is calling on the Government to do more to support them —not least because of the high rateable value in our city. I say to everyone in my community: please shop local this Christmas and visit our virtual high street.
In a nutshell, this is where the problem sits: where property is owned by private landlords, many are more interested in their investment portfolios than the location and in maintaining high property values and a high investment return for themselves. That really damages our high streets because the high rents only top up their balances, in turn pushing up the value of high streets through rents, rateable values and business rates. This false economy must be challenged if we are to build back better.
One frustration is that the covid grants and loans have slipped through the hands of businesses to landlords—and often straight into their offshore bank accounts, as they are overseas investors. This has neither helped our communities nor brought value to the taxpayer. How much taxpayers’ money is now sitting in tax havens as a result of these payments? There are no obligations to help local shops and businesses through this difficult time—not least when overseas investors are twice as likely to have vacant premises on our high streets. The Government should not only review this scandal but legislate to address it.
So many colleagues have mentioned business rates today, and I have held debates on how we can reform business rates. The fairest way is to move to a turnover tax or a profit-related tax that would include all businesses.
Let me turn to the issue of how we should move our high streets from business improvement districts to community improvement districts. Bishopthorpe Road in York has had the secret of growth and has created a really vibrant high street because it has been about community first. That model is being replicated elsewhere across York.
We also need to look at the opportunity to put into our city more places for families, such as Explore York, our library, where people are not allowed to whisper but can certainly enjoy the Lego table, the craft table and knitting in the corner—and even reading a book. As we see in York, our entrepreneurs and business owners are really keeping our high streets alive.
Jane Hunt (Loughborough) (Con)
The recent Small Business Saturday best-dressed shop window competition and wonderful Christmas lights in Loughborough have provided the vital publicity needed to encourage local residents to support small local businesses at this difficult time. Having been out and about last Saturday, it is clear to me that the town is a safe place in which to shop and that residents are doing the right thing to keep everyone safe. The Loughborough BID has established an online shopping service called shop.loveloughborough.co.uk for all the small independent shops in the town centre so that they can trade online in a professional manner.
Many high street businesses were struggling even before the start of the covid-19 outbreak, so we must all work together to keep our high streets alive. There is no better example of this than in my constituency, where a range of partners have come together to increase footfall, backed by an application for £32 million of town deal funding from the Government. All the proposals that have been put forward in the town deal are intended to create a destination. I raised the importance of this in revitalising our high streets in my response to the Government’s “Planning for the future” White Paper, which set out a number of positive proposals to ensure that the planning system adapts to the new realities of consumer behaviour. I particularly welcome the proposals to make it easier for commercial properties to include residential space to create a greater vibrancy in towns, and the desire to use brownfield sites in development. It is clear that a great deal of work is already under way to benefit our major towns.
As an MP, I am committed to supporting all the high streets in my local area, not just Loughborough town. Given that Office for National Statistics data has identified that high street hubs in towns are 36% composed of retail addresses, compared with just 29% in the rest of the country, I would welcome the Minister’s comments on what more can be done to ensure that even our smallest high streets have the support they need—and of course business rates need to be reduced.
Naz Shah (Bradford West) (Lab)
As we have heard, this debate is not just about the economics of business. Our high streets are about more than just pounds and pence and GDP. As we have heard from many hon. Members across the House, including my hon. Friends the Members for Stockport (Navendu Mishra), for Coventry North West (Taiwo Owatemi), for Coventry South (Zarah Sultana) and for York Central (Rachael Maskell), this debate is about the importance of the idea of place—identity—to communities up and down this country. Our high streets are not just the locations that employ our workers, build our economy and provide goods and services; they are embedded in the very culture and heritage of this nation. As my hon. Friend the Member for Enfield, Southgate (Bambos Charalambous) eloquently pointed out, high streets are not just about transactional value but social value. They are part and parcel of all our lives. Whether we live in South Shields or Bradford West, growing up and visiting the high street is part of our way of life.
Of course, much of this debate has been about the economic health of our high street, as hon. Members across the Chamber have discussed. The coronavirus crisis has had a unique impact on many aspects of life globally by speeding things up that were happening already, and the high street is no different. Covid’s chilling effect on physical retail has dealt a further blow to a sector that was already under threat, and, in turn, has accelerated decline on high streets that were already struggling because of the neglect by consecutive Conservative Governments. As Members have said, since 2012, footfall on the high street has been down by 10%, and one in 10 high street shops were standing empty even before the pandemic. My hon. Friend the Member for Croydon North (Steve Reed) pointed out that since 2010 the Government have presided over the closure of 773 libraries, 750 youth centres, 1,300 children’s centres, and 835 public toilets.
Naz Shah
Due to time limits I will not give way—I will make progress.
Some 5,500 pubs and bars have closed in the past 10 years, since this Government have been in office. Because of the Government’s neglect, our high streets were already standing on the edge of a cliff, so why are they surprised that a crisis like the covid-19 pandemic pushed them over? As we have seen in the past few weeks, high street stalwarts like Debenhams and brands like Topshop, Burton and Dorothy Perkins have gone into administration or liquidation, putting more than 14,000 jobs at risk. Since March, up to 20,000 shops have closed and 200,000 people have been put out of work, but despite all this, the Government are refusing the levels of support they gave in March. As has been highlighted, 99% of beauty salons, 95% of cafes, 92% of gyms and 77% of pubs and restaurants are receiving less than they were in March.
My hon. Friend the Member for Croydon North pointed to the challenges that small businesses are facing from the threat posed by online retail and the Government’s total failure to level the playing field through addressing business rates. As my hon. Friend the Member for Coventry South pointed out repeatedly, this is about levelling the playing field. The Government talk a lot about levelling up, so perhaps the Minister will reflect on the fact that the business rates burden is hitting the north and the midlands hardest, as a report by WPI Strategy, written by former Treasury economists, found in October. The report told us that 77% of constituencies in the top 10% with the highest business rates burden are in the north and the midlands, compared with just 18% in London and the south. That is because the tax rate does not mirror economic performance, so for areas facing economic challenges, the burden is much higher.
Back in March, the Government promised to compensate councils fully for getting through the pandemic. They broke that promise, and the Institute for Fiscal Studies now estimates that the covid funding gap is £1.1 billion this year and £4.4 billion next year. That means more job losses, more cuts, and in turn less spending and less support for businesses. We know that there is light at the end of the tunnel with the arrival of the first new vaccine, but the reality is that businesses face a long and bleak winter unless the Government provide the support that they need now. That could mean that there are fewer high streets for people to visit, vaccine or no.
It is important that the Government learn the lessons from the past. Rather than neglect the sectors that need support, they must act now. The lessons from 2010 will be forgotten if the Government’s austerity drive chokes off business recovery. Since 2010, we have seen not only a physical decimation of the high street but significantly lower levels of growth. The Government are in danger of repeating the mistakes of the past. Just this week, Laurence Boone, the chief economist at the OECD, said:
“We made the mistake in 2010; we need to learn from the mistake. We need to keep up the support for the people and those in and out of jobs. We must make sure income is supported…When you’re in a battle and you know the cavalry is coming, you don’t stop fighting. In fact you keep fighting until the cavalry is around. In fact you keep fighting while the cavalry is there.”
The country is fighting. Retailers on our high streets are fighting. The pubs on the corner, the restaurants in the highest tiers that have closed, the small, family-run businesses that have been part and parcel of our local towns and are struggling to keep their doors open—they are all fighting. They are all waiting for the cavalry to arrive, but the Government are leaving them to fight alone on the battlefield.
Kelly Tolhurst
It has been an absolute pleasure to listen to the passion that Members from across the House displayed when talking about the needs of their high streets and their hopes for them to flourish at a local level. Our high streets have a solid future, which will be born from the ambition and innovation that is taken forward by the diversity and strength of our local retailers, local businesses, local authorities and elected Members, who will work together in order to see their areas flourish and their high streets survive. They will provide community hubs and places where consumers, shoppers, visitors and residents want to spend their time. I believe that our high streets have a very prosperous future.
There is no doubt that the covid-19 pandemic has had a crippling effect on our high streets, small businesses and many sectors of our economy. It is only right that the Government have supported many of those retailers and businesses—particularly those on our high streets—in their endeavour to survive the pandemic.
I want to highlight a few things that the hon. Members for Croydon North (Steve Reed) and for Bradford West (Naz Shah) addressed. There was a lot of bluster and criticism of what the Government have done throughout the pandemic. The hon. Member for Croydon North talks about the fundamental business rate review, but it is this Government who have issued the call for evidence to look at the business rate review. That was not done by the Labour Government. This is not a new issue. Business rates are a perennial issue, and this Government are taking action. We will review that and listen to business up and down the country.
The hon. Gentleman talked about grants and money for local authorities to support our high streets, but the grants to local authorities given by this Government, representing nearly £12 billion, have supported just under 1 million SMEs. He talked about our not supporting councils. He knows that I respect him, as I have mentioned before, but it is a shame he did not take that attitude towards his own council’s reckless borrowing of £1.5 billion, which has put it in such a mess. That cannot be blamed on covid.
I want to quickly reflect on many of the points that my hon. Friends and hon. Members across the House have made. Business support has been a lifeline for many businesses and SMEs on our high streets during the pandemic. The Government gave a 100% rate relief for 12 months. I know that the Chancellor and the Treasury will be looking at what happens after that over the coming months, but businesses were being given—and are being given—a £3,000 per month grant, with an extra £1,000 for pubs this Christmas.
The £1.1 billion of additional restrictions grants for local authorities was also mentioned. Where that money is required has been down to the discretion of local authorities. Where that support is necessary, it is being delivered, and that is exactly what we want. We want high streets in thriving communities that are driven by the people who use them, and that is what we are doing. This Government are giving that flexibility and discretion, supporting our local communities to drive their centres forward.
That brings me to the Government investment that we are making through the future high streets fund and the town deals: 101 of the high streets that applied have got through to the next stage of the future high streets fund. That would represent an investment of potentially £831 million that this Conservative Government will be delivering through that competition, driven—I make the point again—by local people, local plans, and their ideas and dreams for their local communities to survive. That is what I want as a Conservative Member of Parliament and a Minister: to support local communities to deliver exactly what they want on their doorsteps. Through the towns fund, this Government are again making a significant investment—more so than any Labour Government, and certainly more in my area since I have been involved in politics.
I want to highlight a few other things that have been mentioned. I absolutely understand Members’ concerns about parking charges. I look forward to coming to the Champs Élysées of the north in the future, in my role as high streets Minister. I am also happy to meet with my hon. Friend the Member for Stone (Sir William Cash), and other interested MPs, to discuss some of the issues that he has raised in today’s debate.
We are absolutely ready and prepared, and will continue to work with stakeholders, businesses and local representatives, to ensure that our high streets and our economy can bounce back as soon as we can move out of restrictions, which is something the Government are working very hard to deliver.
I want to pick up on a very important point that my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) made about the VAT retail export scheme. The Government recognise the contribution that VAT RES had made to international tourism retail in the UK. However, there was not a choice of maintaining the VAT RES as it is today. The choice was between extending the scheme to EU residents or removing them completely under World Trade Organisation rules. HMRC has estimated that refunds cost around £0.5 billion, for around 1.2 million non-EU visitors, which puts the issue into context, in that only one in 10 non-EU visitors is using the VAT RES system.
We will survive this pandemic, and our high streets will survive with the determination and dedication of all the men and women who are working in our businesses and shops. [Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Do you know, I have never heard that before, in all these years. It was a very good debate on all sides, and all the better for short speeches—to the point, and many of them.
Question put and agreed to.
Resolved,
That this House has considered the future of the high street.