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.
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.