Retail: Portas-plus Package

Baroness Hanham Excerpts

Monday 15th July 2013 Lords Chamber

[Lord Naseby]

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 Communities and Local Government (Baroness Hanham)]

My Lords, following the Portas review, we have lifted planning restrictions, doubled small business rate relief to help small shops, and provided communities across the country with a multimillion pound package of support so that they can drive new ideas for their local economy. Beyond the Portas pilots, the Government have invested millions through the High Street Innovation Fund and high street renewal awards. This is alongside more than £115 million of government funding to boost enterprise and initiate business start-ups.

[Lord Naseby]

Is the Minister aware that the Portas proposals and the extensions to them that she has just announced are enormously welcome to everybody in the retail trade? Nevertheless, two dimensions are hitting Britain’s high streets today. The first is low demand for the past two and a half years, which we all understand, because of the state of the economy and what we inherited in that dimension. The second, however, is business rates. Business rates have now reached the extent that they are the largest single overhead of any retailer, particularly the independent retailers. Against that background, can my noble friend confirm that there will be a commitment from the coalition Government to find a fairer way to tax both the high street and the online traders?

[Baroness Hanham]

My Lords, as the noble Lord will know, the Government have doubled the level of small business rate relief for the past three and a half years, and the higher level of relief will be available throughout the next year. Approximately half a million small businesses in England are estimated to benefit from that. We have also given authorities powers to grant their own business rate discounts, and central government is funding 50% of that. We have also reduced, and are reducing, corporation tax for larger businesses and corporate structures. Although I understand that concern is expressed by some about their business rates, I am not aware of any plans to change the system.

[Lord Cotter]

My Lords, pro rata to turnover, small shopkeepers provide more jobs than the big supermarkets do, although we are also seeing a great increase through mini-expresses and other means employed by the supermarket chains. It is welcome that the Government have come forward with schemes for business rates but those schemes lack a certain breadth and viability for many people. Will my noble friend look into the unfair situation whereby small shopkeepers frequently pay considerably more in business rates, based on turnover, than the big chains do?

[Baroness Hanham]

My Lords, I am not totally sure that they do. Business rates, as the noble Lord knows, are levied on the rate of rent paid so that, whatever happens, payments will be consistent. I am aware that there is concern about this, as I have acknowledged. However, I think that the Government feel at the moment that there is nothing to do to change that except to give small businesses the relief that I have already described.

[Lord McKenzie of Luton]

My Lords, the Question of the noble Lord, Lord Naseby, refers to “independent retailers”. Is that a distinction which is reflected in government policy, and what definition has been adopted?

[Baroness Hanham]

My Lords, I have accepted my noble friend’s interpretation. Independents, of course, are small retailers which, as the term suggests, are not part of a chain. On the other hand, small retailers may be part of a chain. It depends on the size of the business. To be clear, we are looking to ensure that small businesses can thrive in high streets. I have outlined the measures that we have taken to try to ensure that and to support them over the coming years.

[Lord Phillips of Sudbury]

Will my noble friend please take into account, when considering improvements to this already useful package, the fact that we are, in our times, seeing a decrease in the cohesion of local communities? Independent shopkeepers give character to town centres but also, more importantly, very often support local community activities in a way that the supermarkets totally fail to do. Will the Government take account not only of that but of the crazy disparity in tax payments between the little local shop on the high street and some of the big online retailers?

[Baroness Hanham]

My Lords, I totally agree with my noble friend that local, small and independent shops help provide community cohesion. There are many in my area which I know are very valued for the work that they do. One of the reasons why we are very anxious to see the high street flourish is that these independent traders are there, as well as others. After all, they are the centre of local communities, and they should be the generator. You meet people in the local butcher’s, and you meet people on the high street. They are also keen to take part. I fully accept that from my noble friend.

[Baroness Farrington of Ribbleton]

My Lords, will the Minister tell the House whether any government support or money is available for the conversion of space above high street shops to housing accommodation? There is a great demand for affordable housing in the centres of many of our towns and small cities. What are the Government doing to assist that?

[Baroness Hanham]

My Lords, as I indicated in my opening remarks, the Government have made changes to the planning regime which will enable local shops to become residences if that is a suitable change. I totally agree with the noble Baroness about the empty space above so many shops. Yes, we are very anxious to see those brought into use, and under permissive development they could be, but there are often structural reasons why they cannot, for example because they have no separate entrance. However, I take the noble Baroness’s point, which is very well made.