British Retail

Debate between Lord Harrington of Watford and Toby Perkins

Wednesday 6th March 2013 Westminster Hall

[Richard Harrington]

My hon. Friend makes a good point, and I would expect nothing less. Independents are very much part of the story, and they are necessary, but large companies developing real estate and operating shops create massive employment, massive taxation and a massive contribution to urban regeneration, although that takes nothing from the validity of my hon. Friend’s point.

Things have changed. Everyone knows that in the past, apart from the high street, most towns had parades of shops. The developers of the masses of residential areas across London and the home counties from the time trains opened up those places would, for every few hundred houses, build a parade of shops that included a fruiterer, a greengrocer, a fishmonger, a general grocer and so on. Various things in the cycle, certainly in my lifetime, have kept those parades going.

I remember when the supermarkets started to take hold and some of those shops became empty and were replaced by banks, which were opening chains of local branches. It is hard to imagine now, but there was a big fight for which bank could get there first. Then there were estate agents. Again, if there was a spare unit, people would open an estate agency. There always seemed to be something, but that is not the case now.

With the internet there is less demand for individual units. There is plenty of supply, because, in many cases, the units were built before the second world war, if not before the first world war.

[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Gentleman on securing the debate.

One of the changes is that massive supermarkets are also becoming dominant players in the convenience sector and are appearing in every community, rather than simply in out of town or city centre locations. Has the hon. Gentleman reflected on the health, or otherwise, of that for British retail and market diversity in those communities?

[Richard Harrington]

Yes, I have reflected on that fundamental point. Many hon. Members want to contribute, so I cannot address all aspects of retail. Suffice it to say that although in the past shops appeared, on the surface, to give people much greater choice, if we add the internet and other channels, people have great choice now. I do not completely agree with the hon. Gentleman, but his point is valid.

Many people of my father’s generation came out of the Army with a small amount of money and could never dream of opening a big factory or going into a big form of business, but they were able to use their money to open a market stall, as my father did in Yorkshire. Unfortunately, the Marks and Spencer dream of going from a penny bazaar to a major multinational did not happen in my family, but we ended up with two market stalls. My father’s business doubled in size over 30 years from one market stall to two.

The serious point is that in those days the barriers to entry were low and could be met by people with small savings and an idea. For almost any item of clothing, household goods, luggage or anything that people could think of, there was a place for a niche shop. It is easy to say, “All that has changed. It is now in the hands of Tesco and the other big companies.” I do not quite buy that, although, yes, in the start-up system it is generally true that not many people, for a number of reasons, are opening shops; they are not saying, “I want to sell shoes, so I am going to take a store in Watford high street.”

Even if someone is acceptable as a tenant, they probably cannot afford to pay the rent or the rates. Compared with my father’s generation, there probably is not the same demand for the high street, but that does not include internet start-ups. There are many such examples in my constituency, including the sister of Jenny Reed, who works in my office. Hayley Reed had no business experience, but she set up a shop in her spare room. If I might ruthlessly plug the shop, it is called ProperPresent.com, and is similar to what previous generations would have created in bricks and mortar. The retail sector, albeit differently, still allows for start-ups and for choices that fit people’s modern lifestyle.

Self-Employment

Debate between Lord Harrington of Watford and Toby Perkins

Tuesday 24th January 2012 Westminster Hall

[Richard Harrington (Watford) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Riordan, and I am pleased to see so many hon. Members present, particularly the Minister for Further Education, Skills and Lifelong Learning and the shadow Minister, the hon. Member for Chesterfield (Toby Perkins).

This debate came about as a result of a conversation between me and my hon. Friend the Member for Wyre Forest (Mark Garnier), who is sitting next to me, about people in this country setting up their own businesses. We reached the conclusion that not enough people do so. Everybody knows the benefits of people setting up their own businesses, but there is a certain culture against self-employment and business in this country, notwithstanding everything that this and the previous Government have tried to do. Politicians brand the terms “entrepreneur,” “small and medium-sized enterprises” and similar without really understanding what they are about. My hon. Friend and I have, therefore, decided to focus the debate on how Governments can change attitudes.

Like so many people of my generation, I was the first member of my family ever to go to university. Few people at that time had the idea of setting up their own business, and I do not think that much has changed. I have two sons, one in his late teens and the other in his early 20s, and from what I have observed of my family life, as well as that of my sons’ friends and during my constituency duty of visiting schools—some very good, others not so good—and further education colleges, there is very little idea, culture or yearning among people, from the most academically gifted to the least so, to set up their own business. However, I commend people such as my hon. Friend the Member for Newton Abbot (Anne Marie Morris), whom I am pleased to see and who is co-chair of the all-party group on micro-businesses. Others have also tried very hard in the main Chamber, as well as elsewhere in the Palace of Westminster and throughout the country, to help the cause of small business. The Government themselves have also made a lot of effort, and I do not feel that it would be right for me to criticise them.

This debate will be divided into two halves. I will deal with social, cultural and educational barriers, and what I think the Government might do about them. My hon. Friend the Member for Wyre Forest will then deal with taxation, regulation and other more direct governmental aspects. It is also nice to see so many other hon. Members present who want to take part.

On the face of it, self-employment seems to be going well. Recent figures show that 300,000 people have become self-employed in the past year, which means that they are registered with Her Majesty’s Revenue and Customs as being self-employed, but I do not think that that necessarily means that they have set up their own business. Some of them will, legitimately, have taken on part-time functions that classify as self-employment. I do not want to get into a political debate about whether that is self-employment or not, or whether the recession is to blame, because I want to focus on a culture that will give ambitious young people the desire to set up their own business.

The education system is the most important opinion-former for young people, and many aspects of it are encouraging. Like many other hon. Members, I have Young Enterprise groups in my constituency. We have Hertfordshire Young Enterprise in Watford, and I have seen many teams of young people setting up little businesses at school. They are largely supported by voluntary contributions from local businesses and they get mentors. In fact, only last Saturday, there was a display of the best teams at the Harlequin centre in Watford, which is well known to some Members present and to those more illustrious alumnae of the better Watford girls school—without naming names—whom I am also pleased to see present. It is interesting to see that these teams set up real businesses, producing bracelets, handbooks and all sorts of things. Some of the products make them a bit of money, and it is good to see local businesspeople helping them. This, however, is only useful if it gives those young people a desire to say that, when they graduate—assuming that they want to go to university; I am not saying that that is necessarily the most important thing—they want to set up a business, but I do not find that to be the case.

I recently visited Watford grammar school for boys, which is one of the better schools in the country— 30 boys are going to Oxford or Cambridge this year. After I finish my talk to the sixth form, I always ask them what they want to do after university—most of them go to university, but I would ask a similar question at a school where not so many pupils do so. When I ask how many want to be lawyers, accountants or involved in advertising or the media, many hands go up, but when I ask who wants to set up their own business, very few want to do so, including those who have taken part in the education system’s successful schemes.

[Toby Perkins (Chesterfield) (Lab)]

The hon. Gentleman is making an important case for the role that education can play. Another part of getting young people excited about running their own business is the experience of those who do so at the moment. Today’s Financial Times includes an article on an Aviva report that involved interviewing 500 owners of SMEs for its research. A quarter of them said that they were considering returning to work as an employee, because of how difficult it is at the moment to run a small business. When people who actually run their own business find it that difficult, will it not be more difficult to persuade young people to do so?

[Richard Harrington]

The shadow Minister makes a valid point. I read that article in the Financial Times online—if I cannot sleep at 3 o’clock in the morning, I find that that is the best way to get back to sleep. It focused on the general problems of the economy and how much more difficult it is for people who are self-employed and have their own business. Some of those people look towards employment as an answer, and I do not disagree with anything that was said. I am sure that some people want to go back to the comparative security of employment, but I do not think that that changes my main argument. People becoming self-employed and setting up their own businesses is one of the most important things for this country to expand the economy.

--- Later in debate ---

[Richard Harrington]

That is an exceptionally good point, and I am sorry that my hon. Friend, like me, in later life has had to do the job that we are doing now instead of being in business. However, I know that he, like me, benefited greatly from his time in business. His serious point was well made. The alternative of salaried employment for a company is not secure either, and many people lose their jobs. My generation may be the last one that believed that the professions provided a job for life. There is a risk element now.

I return to my university college, which I hope the Minister will immediately decide should be located in Watford, because that is the obvious place for it. Watford is a good example for small businesses. It used to depend on two heavy industries—printing and lorries—but it now has more than 1,600 small businesses, and the employment background is small business, so Watford would be a suitable place for the college. It would be an ideal location because of being well known internationally as a centre for commerce, culture, intellect and so on.

My serious point is that the Government, with all the excellent measures that they are taking, should consider introducing a degree on setting up a business—obviously, that is not what it would be called—helped by local business people who would agree to take part for perhaps two or three days a week. Students could set up real businesses that would go on to provide real employment for people. That is where academia should meet the practicality of setting up a business.

[Toby Perkins]

rose—

[Richard Harrington]

I will happily give way to the hon. Gentleman, but my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) rose first.

[Richard Harrington]

I agree with my hon. Friend, and my hon. Friend the Member for Wyre Forest will speak about that.

[Toby Perkins]

I want to explore the hon. Gentleman’s idea. He has rightly identified that many successful entrepreneurs with great business careers were not academically inclined, and perhaps those who have that motivation and spark do not sit well with long periods of study. How does he square that argument with his idea that people should undertake three or four years of study to set up a small business, when many of the best small business people have been instinctively brilliant rather than studiously and academically brilliant?

[Richard Harrington]

I have to accept the logic of that point. Not everyone who wants to go into business would go to the sort of college that I am proposing. Many people would start businesses as happens now. Many people who have been in employment may decide when they become a bit older that that is for them. There are different routes to the same objective. However, I believe that an all-star college with teaching by people such as Sir Richard Branson and senior politicians and business people—people who have been in business—would show that the Government are serious, and that the status of such a course is as good as those at Oxford, Cambridge and so on. It is wrong for people of my age to use the expressions of younger people, but that would show that it is cool to set up a business, and just as good as anything else. In addition to the many other things that the Government do, they could help with that, and it would not cost too much money.