High Street Retailers

Lord Henley Excerpts

Wednesday 25th April 2018 Lords Chamber

[Lord Naseby (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest in that a member of my family works in the retail trade.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, we understand that some high street retailers are facing difficulties in a changing retail environment. We shall work closely with the newly established Retail Sector Council to bring government and industry together to support the sector.

[Lord Naseby]

Is my noble friend aware that this is the 12th Question I have asked on this broad area? Is he further aware that the rates review was a singular tragedy for the retail trade and, even worse, the rates appeal system today is sadly shambolic?

Secondly, I have asked Questions previously about the unfair competition from online trade, particularly with Amazon now controlling 40% of that trade—worth over £1 billion. Is not it time that that unfair situation was corrected?

Finally, I have raised Questions on providing parking for our shoppers two hours a day, 365 days a year in every local authority. I am pleased to report that Northampton Borough Council provides two hours every day for a whole year. Against that background, with chain after chain failing, will my noble friend sit down with colleagues, look at the crisis and recognise that action is needed and a review of rates in 2021 is not acceptable?

[Lord Henley]

My Lords, I was not aware that it was my noble friend’s 12th Question, but it appears that the House was. I appreciate that the rates review affects quite a number of businesses, but our estimation is that some 70% of businesses will see either no change or a reduction. Obviously, it affects different areas differently; in London it has affected businesses more severely, whereas in the north-west, where I come from, there have been some considerable gainers.

As for the unfair competition my noble friend talked about, particularly in relation to the wider question of taxing the digital economy, as he is aware, my right honourable friend the Chancellor is looking at that issue to make sure that things are fair between different types of retailer, whether they are digital or store-based.

On his final point, about parking, I note what he says and hope that other local authorities note what he says. From my personal experience, I have noticed that some local authorities reduce their parking charges, which has a beneficial effect on retail in that area. I have similarly noticed that in other areas the effect of parking charges can be to the detriment of the high street.

[Lord Watts (Lab)]

My Lords, I know that the Government like reviews, but may I suggest that this problem has been with us for some time now and it is action we want, not reviews? Secondly, would the Government consider helping local authorities to downsize some of their town centres, because empty shops just make the situation even worse?

[Lord Henley]

I agree that empty shops make the situation worse. It is up to local authorities to look at what can be done, but we are in a changing environment. Some 10 years ago, 4.5% of retail was online; it is now 17%. That is what the consumer wants and, in the end, the consumer has to be king in a sector such as retail. It is up to the sector itself—that is why the Government want to talk to the sector—to look at the changing nature of what is happening and adapt to that change.

[Lord Fox (LD)]

My Lords, it is not just about empty shops in the high street; it is about people. We are seeing a migration of good retail jobs, some of which had pensions and many of which had long-term prospects. It is an erosion of people’s lives. The replacement jobs are warehouse jobs on zero-hour contracts. The Minister mentioned that his right honourable friend the Chancellor is conducting a review of the situation. Given that shops are going out of business every day, when might we hear the result of this review?

[Lord Henley]

I will leave that to my right honourable friend and he will respond as is appropriate. The point I want to stress—as I did in my original Answer and in the one I just gave—is that this is a changing environment. The noble Lord no doubt buys things online. There is an increase in people buying things online; that is quite simply what is happening. I cited the figures: 4.5% of retail was online 10 years ago and the figure is now 17%. That trend will continue. The retail sector must look at ways of adapting. Having said that, the noble Lord should not think that all online trade is necessarily going to Amazon and other warehouses; a lot of online business is conducted by the shops themselves. It is a varied picture, but it is up to the sector itself to adapt to those changes.

[Lord Skelmersdale (Con)]

My Lords—

--- Later in debate ---

[Lord Henley]

My Lords, this is something that local authorities, which are best placed to look at these issues, can do. I would commend them to look at all possible uses for spare retail space, if there is such space.

[Baroness Rebuck]

My Lords, none of us wants our high streets to become ghost towns. I declare an interest, but bookshops, through activities such as book festivals, World Book Day for kids and signings, drive up footfall that benefits all retailers. Bookshops are also cultural hubs and play a vital role as community and learning spaces. Will the Government now consider giving bookshops the same rate relief that is given, rightly, to many community pubs, and thus avoid an estimated one in four closures in future?

[Lord Henley]

I do not have precise figures for sales of books. I think the noble Baroness probably does, and she will find that book sales are increasing again. Whether the sales are happening in the shops is another matter, because obviously a lot of those sales will be online. That is how people want to buy books, as often as not. I note what the noble Baroness said about the successes that part of the sector is achieving through book fairs and other means, and I commend pursuing that type of thing to other sectors. Her final point is one that can be considered.