Retail Sector

Debate between Rebecca Long Bailey and Rachel Maclean

Wednesday 6th June 2018 Commons Chamber

[Rebecca Long Bailey]

I completely agree, and interestingly historically RBS had a last-man-standing agreement to be the last bank on many high streets, and that does not seem to have been enforced by the Government, so I call on the Secretary of State to look at this. My hon. Friend makes a pertinent point, and it is not just bank closures that are damaging the high street infrastructure; the closure of post offices is also a significant issue.

These issues are exacerbated even further by years of under-investment in many of our regions and nations. If the Government are not prepared to provide the tools businesses and communities need to provide a fertile environment for local businesses, how can we expect these fortunes to change? A worrying report by David Jinks called “The Death of the High Street” argues that, unless we see radical change within 13 years, the impact of online shopping and home deliveries will “destroy” over half of today’s town centre stores. His report also argues that between 2020 and 2030 half of the UK’s existing shop premises will disappear; 100,000 stores will close, leaving just 120,000 shops on our high streets.

Britain’s high streets are fading away because new shops are not opening fast enough to replace those that close. The Government attempted to deal with this issue through the Portas review, which advised that town teams be created to assist towns undergoing significant strain, but official funding for town teams ended on 1 April 2015.

The Government’s recent announcement to develop local industrial strategies was a welcome step forward. However, think-tank Localis stated last month that there was a capacity gap in Whitehall for developing these, leading to concern that a pipeline of local industrial strategies will face significant delays. I will be grateful if the Secretary of State provides clarity on this and confirms what resources are available to local enterprise partnerships and local authorities in taking these strategies forward.

EU funding has also been a significant supporting factor to many areas in decline; it has always been strongly targeted at less prosperous regions. The Government are currently failing to provide any certainty to business over the UK’s future trading relationship with the EU, the extent of regulatory alignment, or access to labour, but they have also failed to provide clarity on one key tool that previously helped spur the regeneration of many towns and high streets that had been starved of investment: EU structural funds. We know that the Government are planning a new fund to replace them when we leave the EU, but so far there has been no commitment on the scale of that fund, on how it will be administered or which investment it will be directed at. Will the Secretary of State give us more information on that today?

When we add to this massive uncertainty the significant cuts that local authorities have faced in recent years, we have a recipe for complete high street annihilation. That environment, and the lack of support that many businesses face, was made very clear in the shambolic handling of last year’s business rates revaluation, in which many businesses faced an unmanageable overnight hike in their rates. I am pleased that the Government have brought forward CPI indexation, but I urge them to go further by immediately introducing statutory annual revaluations, guaranteeing a fair and transparent appeals process and excluding new investment in plant and machinery from future business rates valuations. They must urgently evaluate and reform the whole system to make it fit for purpose and capable of addressing the changes that we are seeing in the sector.

Businesses were failed not only in regard to business rates; we also saw a failure to handle the scourge of late payments, which can lead to businesses struggling to cover costs or to invest, and sometimes going bust. We saw the effects of this recently in the collapse of Carillion, when huge swathes of supply chain companies faced a cliff edge due to late payments, often of up to 120 days. Many of those businesses will never see their money again. I urge the Government to adopt Labour’s position by ensuring that anyone bidding for a Government contract is mandated to pay their own suppliers within 30 days and by developing a robust system of binding arbitration and fines for persistent late payers.

As the retail sector struggles, how to boost productivity remains a major challenge. There are at least two schools of thought on this. The first concentrates on improving technology and ultimately automating many jobs. That involves automating warehousing, sales, deliveries and so on, and job losses could result. That was the view of Deloitte, which suggested that 60% of jobs could be lost. The jobs that would remain would require a range of skills such as operating advanced machinery, software and robotics. They are likely to be higher paid and involve higher skills.

The second model involves redesigning how business operates to boost productivity growth. Research from the Joseph Rowntree Foundation has shown that many capable employees in the retail sector are reluctant to move up the rungs of the management ladder, as that involves greater responsibilities without much of an increase in pay. Jobs need to be redesigned so that an individual performs a range of different tasks that straddle the staff-management boundary and pay is increased. In that way, talented individuals could be engaged in the management side, raising performance and productivity. Either of those models—or a hybrid of the two, whichever the Government chose to take forward—would require dedicated Government investment in skills training for employees, to enable them to navigate the changes.

[Rachel Maclean (Redditch) (Con)]

I agree with a lot of the challenges that the hon. Lady is outlining. My son works in the retail sector, and he has recently had a promotion to management level. He is only 18, so I give full credit to Zara for encouraging his talents. Does she agree, however, that the Government’s approach in bringing in T-levels has played an important part in tackling those challenges and that they are working with industrial partners to bring those changes forward?

[Rebecca Long Bailey]

I thank the hon. Lady for her intervention. Please will she congratulate her son on his recent promotion? Some of the Government’s commitments are welcome, including the national retraining scheme and the T-levels that she has just mentioned, but sadly they are meaningless in the context of the cuts that we have faced over recent years. For example, £64 million was announced for the national retraining scheme, but £1.15 billion was cut from the adult skills budget between 2010 and 2015. I hope that the Secretary of State will put forward proposals today to increase investment in skills, because if we do not invest in skills, we will not be able to take our employees on the journey that they need to make.

Industrial Strategy

Debate between Rebecca Long Bailey and Rachel Maclean

Wednesday 18th April 2018 Commons Chamber

[Rebecca Long Bailey]

I will make some progress, if I may, then the hon. Lady can make further interventions.

In relation to skills, we were promised about £500 million of investment. That is frankly pitiful and does not even begin to repair the damage done to the adult skills budget between 2010 and 2015, when over £1.15 billion was cut. With research by PWC finding that 77% of CEOs worry that skills shortages could impair their company’s growth, and with the CBI stating that 69% of businesses are not confident about filling their high-skilled jobs, the Government’s actions have done little to show that they are creating a workforce truly ready for our industrial renaissance.

On infrastructure investment, we were promised £31 billion of investment through the national productivity investment fund. Again, that is below the levels seen in other leading industrial nations. As TUC analysis shows, the sums promised will simply increase investment to just 2.9% of GDP, whereas the average spend on investment by the leading industrial nations in the OECD is 3.5%. It is also clear that the Government have made no attempt to halt the skewing of infrastructure spending towards London, which is due to get more transport spending over the next five years than the rest of England put together.

That brings me to local industrial policy. Labour has been clear on the need for a national industrial strategy, but we are also clear about the need to be regionally powerful and distinctive, with the resources to match, and to build on the already world-class universities and businesses in our regions and nations. Since last November, the Labour party has been convening roundtables in every region and nation of the UK to discuss what businesses in those regions need from an industrial strategy. Alarmingly, in one region I heard that the responsibility for formulating a local industrial strategy had simply landed on the desk of the local enterprise partnership’s chief executive, with no additional resources. Could the Minster confirm whether there is a team in his Department working on local industrial strategy or whether that is simply now the responsibility of LEPs? Last month, the Local Government Chronicle argued that the Government should put more resources into agreeing a local industrial strategy if they did not want to risk concentrating their efforts on improving the economy in just a handful of areas.

[Rachel Maclean (Redditch) (Con)]

Further to the point made by my hon. Friend the Member for Walsall North (Eddie Hughes), I wonder whether the hon. Lady would like to visit the west midlands and meet the Conservative Mayor of that devolved authority, who has most certainly come together with a local industrial strategy. There are resources there, backed by this Government and their friends on these Benches, and that is making a real difference in our region. I would be happy to host the hon. Lady and enable her to speak to those successful businesses that are backing our Conservative Mayor.

[Rebecca Long Bailey]

rose—