High Street Retailers

Wednesday 5th February 2025 Westminster Hall

16:00

[Karl Turner (in the Chair)]

I will call Mr Gregory Campbell to move the motion and then the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for a 30-minute debate.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I beg to move,

That this House has considered Government support for high street retailers.

This subject has concentrated minds for a number of years, and we are all affected by the problems associated with high street retailing. In fact, Mary Portas said that the future of the high street will involve

“less retail but better retail”—

that was about three years ago. I am afraid that those who say there are difficulties or problems in the high street are mistaken, because unless towns across the United Kingdom are different from the towns I experience in Northern Ireland, high street retailing is in more than just difficulty. Unless there is dramatic, innovative intervention, the high street in the United Kingdom as we know it will die.

[Jim Shannon (Strangford) (DUP)]

I commend my hon. Friend for securing the debate. He is right to say that about the high street, and retailers across this United Kingdom of Great Britain and Northern Ireland are saying the same. Does he agree that the only way for the high street to survive is for it to adapt and move along with the times? That takes technology, innovation and a support system to which Government are committed.

[Mr Gregory Campbell]

I fully agree with my hon. Friend. Innovation will be the key. In many towns—I am sure that this is applicable across the UK—there are enough coffee shops and charity shops, and both of those are admirable additions to our high streets. In fact, when I am on constituency work, I find coffee shops very convenient, especially if I do not have much time to get a bite to eat. They offer a facility, as do charity shops, but the high street has to be much more than that.

This is not about the higher-end retailing that exists in, for example, Regent Street or Oxford Street, and I say that not to minimise the high streets across our country. They may be doing well—by the looks of Christmas just past, they are doing well in central London—and much of that is down to money that comes in from outside the United Kingdom.

[Dawn Butler (Brent East) (Lab)]

In Brent, we have a lot of independent shops. Does the hon. Member agree that we should be more innovative in giving opportunities for more pop-up shops to start businesses?

[Mr Campbell]

I thank the hon. Member for raising that; I was just coming on to the business of independent shops.

In Northern Ireland, independent retailers have an effective representational body. They are manfully and womanfully struggling to present their case in the face of huge multinationals that exist, particularly on the edge of town and out of town, where there have been a number of out-of-town developments, which tend to swamp town centres. They take advantage of what is, by and large, free car parking, and town centres are choking in some respects because of commuters and people having to pay for charging.

We must be more innovative, particularly in the prime months—in the run-up to Christmas, for example—when we must try to convince various Government Ministers to introduce a charging structure that would benefit local independent retailers on the high street to ensure that some benefit is accrued to local people.

[Robin Swann (South Antrim) (UUP)]

I thank the hon. Gentleman for bringing forward this debate. Does he agree that we can also look at other initiatives to support independent retailers? For example, there is the “Living Over The Shops” scheme that Antrim and Newtownabbey borough council brought in, which just launched its second phase in Ballyclare and Randalstown close to the end of last month. There is also the work that the council was able to do with the levelling-up moneys; it was able to redevelop a space scheme in the middle of Antrim town, where it has opened office facilities just above my constituency office.

[Mr Campbell]

I thank the hon. Gentleman for that. Those two or three options are starting to develop. Those that are in vogue at the moment are reasonably successful, and they need to be built on.

[Matt Rodda (Reading Central) (Lab)]

Does the hon. Member agree that this is also about a series of relationships between local councils, small businesses and others to try to enhance town centres? For example, in my area, Reading borough council is working hard at getting improvements to paving and other visual improvements in the town centre to help to support small businesses. That is a valid initiative, which will hopefully help to attract more people into our town centre.

[Mr Campbell]

I concur with what the hon. Gentleman said. I notice that this is turning into an intervention debate with a speech, but, given that I intervene very regularly—

[Tulip Siddiq (Hampstead and Highgate) (Lab)]

On that point, will the hon. Gentleman give way?

[Mr Campbell]

I suppose I asked for that.

[Tulip Siddiq]

The hon. Member is being very generous with his time. He has brought a very important debate to the House. Others might disagree, but I think my constituency is the best in the world. We have one of the prettiest high streets in Hampstead, but the problem at the moment is that Hampstead post office is under threat of closure because of years of under-investment. I personally have been going there since I was a teenager. Elderly people and small businesses, which the hon. Gentleman referred to, rely on it. Does he agree that if we want our high streets to thrive, the post office has to stay open?

[Mr Campbell]

I was just coming to the issue of bank branch closures and post office closures, which unfortunately have exacerbated the problem in recent years. We had a debate this morning where some Members mentioned the development of banking hubs, which has helped to a small degree, but they will take some time to roll out. We must remember that more than 2.5 million people are employed in the retail sector across the United Kingdom, so this is not a niche sector that some people are annoyed about but which does not affect a large number of people: this is a huge part of our economy, and it has to be the subject of innovative change and dynamic alignment.

[Claire Hanna (Belfast South and Mid Down) (SDLP)]

The challenges we are experiencing on Saintfield Road and Sandy Row sound very much like what the hon. Gentleman will be dealing with in Coleraine and Dungiven. Retail provides vibrancy, shared space and a huge rates take. Lisburn Road in south Belfast puts around £6 million into the coffers of Belfast city council. Could we do more from Stormont in calibrating the rates and supporting some of those particularly vulnerable sectors, such as retail and hospitality?

[Mr Campbell]

The short answer to that is yes. I think some things are being done by devolved Government, but I was alluding to the rating of commercial premises in the run-up to Christmas. We need to reduce car parking charges and rates at that time because many businesses exist throughout the year only because of the turnover that they get between October and Christmas eve.

Richard Walker, the managing director of Iceland—who I understand is a supporter of the Labour Government, so I hope this is not viewed as a criticism—said just this week:

“The Treasury is right to look at levelling the playing field on tax, but it has parked its tractor in the wrong place going after hard-working British farmers. Let’s stop messing around and make online sales tax reform the priority. High streets and farmers are the bedrock of this great country, we need to get behind them.”

I could not agree more. We need a fundamental reassessment of where our high streets will be not in 15 years’ time but in 15 months’ time.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

I thank the hon. Gentleman for giving way; he is being very generous with his time. It is already clear from this debate that decline in our high streets is a common problem across the UK, including in my constituency. We probably all agree that it will take innovation, creativity and, crucially, investment to redevelop our high streets. Will the hon. Gentleman join me in paying tribute to the work of local organisations such as Love Oor Lang Toun and the Adam Smith Global Foundation in my constituency, which are doing so much to develop the future of Kirkcaldy?

[Mr Campbell]

I do not know those organisations, but I presume, on the basis of the hon. Lady’s endorsement, that they are very worth while and worth defending.

This week—this is a very topical issue—the Government in the Irish Republic have indicated that they will look at VAT terms. Of course, Northern Ireland is in very close proximity to the Republic. Here in the UK, VAT is charged at 20%, and in the Irish Republic it is 13%. That puts our high street retailers, particularly those in the hospitality sector, at a bit of a disadvantage. The Government in the Republic have indicated that they will reduce their rate yet again from 13% down to 9%, which means that the disadvantage gap for Northern Ireland retailers and consumers will widen considerably.

The Minister will obviously not be able to respond immediately. If he does, I would be very surprised. I would welcome his response if he were able to say, “I’m going to go to the Treasury and get special dispensation for Northern Ireland hospitality on the high street, with a 5% introductory rate for the next four years of this Parliament”—I think that would be an excellent idea that would get support across the divide in Northern Ireland. But I hope he will have some discussion with his colleagues to see what can be done. We are at an acute disadvantage, and it is most heavily felt. In the past couple of days, hotel managers and hospitality retailers have been on local radio saying, “Our opportunity for business is diminishing even more as a result of this decision to reduce VAT in the adjoining businesses, just a few miles across the border, down from 13% to 9%. We are struggling with charging a 20% rate.” So a 5% rate would be very welcome.

In conclusion—

[Tom Hayes (Bournemouth East) (Lab)]

It is funny how saying “In conclusion” gets our attention. I thank the hon. Gentleman for giving way. If he wants independent stores, fantastic cafés or great restaurants, I can heartily recommend the high streets in Boscombe, Pokesdown, Southport and Tuckton. I could go on, but I will not. I particularly recommend the fantastic vintage store In Off the Far Post in Boscombe. Would the hon. Member agree that we need the Government to support our high streets so that we have more independent shops and fewer candy shops and vape shops, which are often so brightly lit that we can almost see them from space?

[Mr Gregory Campbell]

I agree with what the hon. Member said in his brief tour of his constituency, which I am sure is very enticing to those who have not been. We need support, but we need more than just more of the same. We need to have a structured look at what the high street will look like.

[Gideon Amos (Taunton and Wellington) (LD)]

Would the hon. Gentleman agree that the Government “high street rental auctions” approach, in which councils can auction the retail rights of an empty shop, is valuable, but that the guidance needs to be changed? Will he invite the Minister to change the guidance so that it can apply to department stores as well as other places?

[Mr Campbell]

I look forward to hearing the Minister respond to that, as it sounds like a concept worth pursuing. I thank the Minister for being in his place Hopefully, he will be able to respond positively, to give us an indication of what the Government intend to do and to take a really radical look at our high streets in the next few years.

[Karl Turner (in the Chair)]

I call Imogen Walker to make a brief speech.

16:16

[Imogen Walker (Hamilton and Clyde Valley) (Lab)]

Thank you, Mr Turner; it is a pleasure to serve under your chairmanship.

My constituency is a mix of countryside towns and villages, so many of our shops are small businesses at the heart of our communities. But the last few years have been very hard on them: covid, the bungled implementation of Brexit and the stripping out of public services have all sadly revealed the weaknesses of the previous Government and taken their toll. In addition, the SNP cannot manage the finances and that has also had an impact on our town centres.

Now, we are looking to the future. The UK Government have put an end to 14 years of austerity, begun to rebuild our economy and delivered a historic £5 billion extra to Scotland. The 40% business rates relief for the retail sector in Scotland will kick-start investment, get businesses into empty properties and support our hard-working entrepreneurs.

However, despite their record settlement, the SNP Government have refused to pass that support on. It would cost them £22 million to support both leisure and retail with business relief—roughly half the cost of suing Rangers football club; that is their priorities in action right there. COSLA—the Convention of Scottish Local Authorities—has said that £300 million would help get our councils back on their feet, investing in our high streets and bringing our town centres back to life. That is less than the Scottish Government’s overspend on two ferries. For too long, Scottish businesses have paid the price of SNP failure.

Our shops are competing against online giants; that is part of life now, but we must recognise the importance of thriving town centres. I certainly do, because the people in Hamilton, Lanark, Larkhall, Lesmahagow and across the constituency tell me that they want to go somewhere they can meet their friends, try on a pair of shoes and maybe have a cup of coffee. Why, in that case, is the support that the Government are giving our high street shops not being reflected in Scotland? Why can the SNP Government not help level the playing field and give our brilliant shops a fighting chance?

I know that it will be hard for the Scottish Government to deal with their overspend and the chaotic management of Scotland’s money, mirrored terribly in the SNP’s own finances. But despite the problems that they have created for themselves, it is now time to do the right thing: to set out a long-term path to support local economies, start working across all levels of Government and stop wasting money.

I know that we can get the boards down from the shop windows and that there is the talent, drive and energy out there to bring our high streets back to life. All people need is the opportunity to do what they do best. That is what we are here to deliver.

16:19

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

It is a pleasure to serve under your chairmanship, Mr Turner. In the usual way, I congratulate the hon. Member for East Londonderry (Mr Campbell) on securing today’s important debate, and I apologise to him and to other Members for getting my timing slightly wrong. I will make a point of reading the early part of this debate in Hansard a little later.

We have heard contributions from the hon. Member for East Londonderry and my hon. Friend the Member for Hamilton and Clyde Valley (Imogen Walker), but also important interventions from a series of hon. Members. In the short time available to me, I will probably not be able to do full justice to all those interventions, but let me try to pick up at least one or two of the points made.

Crucially, we need to underline the fact that retail has a key role to play in supporting high streets in every corner of the UK—particularly in Northern Ireland, given the focus of this debate, but more generally across the UK as well. In 2023, the retail sector contributed about £110 billion to our economy: just under 5% of the total UK economy. It remains a very high employment sector, directly supporting 2.9 million jobs across the UK in 2023. In short, retail is the backbone of our high streets and remains a key driver to support economic growth.

I recognise that recently there have been concerning stories in the media about the challenges that retailers are facing, and I know that that is a concern for Members across the House. We know that retailers are facing a series of economic headwinds, as well as dealing with the challenges of changing consumer shopping habits and the rise of online shopping. A thriving high street will continue to need a strong retail offering, helping to drive growth in local economies and supporting local communities. Never has it been so important to help retailers—particularly the small and independent retail businesses to which a number of Members, not least my hon. Friend the Member for Bournemouth East (Tom Hayes), have referred—to grow.

[Adrian Ramsay (Waveney Valley) (Green)]

The Minister rightly talks about the importance of supporting small and independent businesses. One thing that those businesses rely on is having access to banking, but banks are closing, which has a particular impact in rural communities. For example, my constituents have lost Barclays in Harleston and this year are due to lose Lloyds in Halesworth and Beccles. Will the Minister outline the progress that the Government are making on their pledge to roll out far more banking hubs so that local communities and businesses keep access to banking in their market towns and areas?

[Gareth Thomas]

I thank the hon. Gentleman for that intervention. My right hon. Friend the Chancellor of the Exchequer opened the 100th banking hub very recently, and I know from figures that Cash Access UK and LINK have published that 200 locations for banking hubs have been identified; that is part of the commitment to roll out 350 banking hubs.

But we want to do more. The Post Office plays a key role in offering banking services, particularly as banks themselves have exited the high street, and we are beginning work with the Post Office to strengthen its banking offer on the high street. I heard very clearly the intervention from my hon. Friend the Member for Hampstead and Highgate (Tulip Siddiq) about the directly managed branch in her constituency. I recognise the importance of post offices to all our high streets. She will know that no decision has been made on Hampstead—or, indeed, on any other directly managed branch—but I know she will continue to campaign on this issue.

To support businesses, the Budget honoured the manifesto commitment not to raise corporation tax. It set out the tax road map for this Parliament, in which we will not change corporation tax, which means we have the lowest rate in the G7. All that will support businesses, including retailers, to invest.

As the hon. Member for East Londonderry is aware, retail is a devolved matter. I welcome measures such as the Back in Business rate support scheme, which has been created to incentivise business rate payers to consider occupying empty retail premises. Vacancy is a blight on too many of our high streets and town centres across the country and it can fuel a spiral of decline. That is why Government in all forms need to work together with local communities and businesses to strengthen the offer.

[Mr Campbell]

The Minister rightly points out the devolved nature of much of retail. Does he agree that the chronic level of VAT, which is not devolved—it is a matter for the Treasury—compared with our neighbour in the Irish republic is having a detrimental effect on retailers?

[Gareth Thomas]

The hon. Member may want me to go straight from this debate to the Treasury to get an immediate concession.

[Mr Campbell]

Tomorrow!

[Gareth Thomas]

That is generous of him. I will take that question away and look at it. I know that that is an issue particular to Northern Ireland. He will understand that it is not immediately the responsibility of the Department for Business and Trade, but I will none the less take a look at it.

[Matt Rodda]

Could the Minister provide a brief update on progress towards reforming business rates? It is a popular policy with many small businesses—particularly independent retailers in my area, who appreciate the Government’s work on this matter. They would be grateful for further updates.

[Gareth Thomas]

I am grateful to my hon. Friend. The Chancellor of the Exchequer announced in the Budget in October the intention to permanently lower the level of business rates for retail, hospitality and leisure. She published a discussion paper at the same time to involve the business community in further discussions about what else we can do in the business rates space. I strongly encourage hon. Members across the House to encourage businesses in their communities to get involved in that debate. That makes all the more striking the point made by my hon. Friend the Member for Hamilton and Clyde Valley about the approach of the SNP Government in Scotland not to get behind businesses. I hope that her speech was listened to and will be acted on by those currently in government in Scotland.

Hon. Members will know that more widely we have introduced high street rental auctions, enabling local authorities to tackle decline on the high street by bringing vacant units back into use. We are already working with three local authorities to begin to learn the lessons of how that new power works.

[Gideon Amos]

Will the Minister give way?

[Gareth Thomas]

Forgive me, but I have only 2.5 minutes. If I missed something and the hon. Gentleman wants to write to me, I will be happy to reply.

I have touched on business rates reform. We want to introduce a new business growth service to simplify the support available for all small businesses and bring it under one single trusted banner. We will set out further reforms in that regard in our small business strategy, which we will publish later this year.

Since I took office, I have been in engaging with the industry-led Retail Sector Council, which is a collaborative forum made up of widely experienced senior figures from across all parts of the retail industry, helping us and indeed other Government Departments to think through the challenges facing the retail sector. One of those big challenges is about how we tackle retail crime.

Shop theft continues to increase at an unacceptable level, with more and more offenders using violence and abuse against shop workers. Recent figures from the British Retail Consortium’s annual crime survey show that violent and abusive incidents were up by more than 50% last year, and retailers are reporting 55,000 thefts a day. That is why clamping down on that behaviour is one of the first steps that we are taking to deliver safer communities, including delivering on a specific commitment for a new offence of assault on a shop worker. We are also ending the effective immunity that the previous Government granted to help stop theft of goods under £200.

We all know that retail businesses are hugely important to our constituents and to our high streets. I thank the hon. Member for East Londonderry for giving the House the opportunity to raise this important issue. I am happy to take up further specific concerns that any hon. Member has in this space.

Question put and agreed to.