Retail Sector

Debate between Anna McMorrin and Rebecca Long Bailey

Wednesday 6th June 2018 Commons Chamber

[Rebecca Long Bailey]

I thank the hon. Gentleman for his comments, and I do apologise for speaking for some time. If he listens, perhaps he will get some of those pearls of wisdom in due course. The point I am making is that the Government need to recognise that businesses need support. Businesses themselves need to innovate and to ensure that they drive productivity increases in-house, but the Government need to show dedication to providing the tools required to increase fertility in the business environment. Frankly, that is not happening at the moment.

An essential element in improving retail productivity is innovation, which is the best means of raising wages and boosting the competitiveness of British industry. Innovation is required by businesses themselves, as I have just pointed out to the hon. Gentleman, but the Government must commit more money to research and development spending. They referred in their White Paper to increasing that spending to 2.4% of GDP, which is welcome, but if they are really going to support low productivity sectors such as retail and ensure that we can compete on the world stage, they need to increase it to at least 3%, as other world leaders such as South Korea and Japan have done.

I also welcome the Government’s recent establishment of a Retail Sector Council, but I have heard very little information about it since its establishment. Will the Secretary of State update the House on how often the council has met so far and whether there have been any discussions with the Government about what role the Government can play in boosting innovation in the sector? Labour has pledged to establish a catapult centre in relation to retail, to lead on technological, managerial and employee innovation. This is important because the Fabian Society recently reported that increasing managerial innovation and sharing best practice in retail can drive productivity by improving quality, as well as sale and business growth, and I call on the Government to examine Labour’s catapult centre proposals.

Infrastructure investment is also a critical part of boosting productivity in the sector. We must recognise that the future of our high streets depends on quality infrastructure, transport links, parking amenities and high-speed broadband, as well as on the local anchor institutions that draw people in, such as entertainment and leisure facilities and libraries. The sums announced in the White Paper are sadly negligible, and the TUC has stated that public investment will be increased to just 2.9% of GDP, while the average invested by other leading industrial nations in the OECD is 3.5%. Again, I hope that the Secretary of State has some earth-shattering updates for me today, to restore our faith in what the Economic Justice Commission recently dubbed

“the most regionally unequal country in the whole of Europe”

in terms of investment in our regions.

This brings me to the subject of retail workers, who are vital to the success of the sector. They provide positive customer experiences, and a lack of staff can have an adverse impact on customer service levels. The impact of job losses in retail should therefore not be understated. They have a profound impact on families and communities right across Britain. Retail has traditionally provided entry-level, part-time and flexible jobs for millions across the UK, and it has often provided livelihoods for people who have had to leave declining industries in particular regions.

[Anna McMorrin (Cardiff North) (Lab)]

One of my constituents who is directly affected by this has written to me. Her husband works in retail, and she is appalled by the contract changes being forced on people working in the sector, particularly in Sainsbury’s, where 9,000 long- standing and loyal staff will suffer a significant pay cut of up to £3,000 and see their paid breaks and premium pay scrapped.

[Rebecca Long Bailey]

My hon. Friend makes a vital point, and I shall come on to that shortly.

For some people, working in retail may be their only viable employment option. If a chain goes under and the local store closes or relocates out of the area, they will either have to travel further afield to find work or decide that the journey is simply not cost-effective and be forced to give up work altogether. According to a recent report by the Fabian Society, forecasts for the reduction in employment in the industry suggest that women, who make up the majority of the retail workforce, will sadly be the hardest hit. Workers in the retail sector are vulnerable, as my hon. Friend has just said. When costs need to be cut, workers are usually the first to face the squeeze. Only recently, Sainsbury’s announced sweeping changes to contracts for up to 130,000 staff in stores across the UK.