High Streets

James Murray Excerpts

Tuesday 19th October 2021 Westminster Hall

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to speak under your chairship, Ms Nokes. I warmly congratulate my hon. Friend the Member for Lewisham East (Janet Daby) on securing this debate and on setting out so powerfully the impact of online retailers on high streets and the lack of a level playing field. It was a pleasure to hear from my hon. Friend the Member for Barnsley East (Stephanie Peacock) about the long-term challenges that high streets have been facing since before the pandemic. My hon. Friend the Member for York Central (Rachael Maskell) spoke about pleas from her local businesses to change the taxation system, and my hon. Friend the Member for Stockton North (Alex Cunningham) spoke with great passion about his local independent shops and the work of his local Labour council.

Members from all parts of the House have spoken about the personal importance of their local high streets, and I will not be any different. The high streets in my constituency are at the heart of our communities. The people I represent value and benefit from the shops at Oldfields Circus, Greenford Broadway and Greenford Avenue, to name but a few; and Pitshanger Lane, which deservedly won the title of London’s best high street at the Great British High Street competition in 2015, is home to more than 50 independent traders. The chair of the local traders association, John Martin, is a tireless advocate for them and high streets across Ealing and beyond.

As we have heard here and I am sure Members in the main Chamber are making clear as we speak, the health and vitality of our high streets is worth fighting for, but the Government are ignoring pleas from many high streets across the country for the support they need to thrive, and in some cases, simply to survive. High street businesses and those who work in them need the Government to act. As USDAW has made clear, that is crucial to those working in high street retail, who have experienced job insecurity for some time, only made worse by the covid-19 pandemic. USDAW has called for an urgent recovery plan for the retail sector that involves Government, retailers and workplace representatives working together to address the structural challenges facing the sector. It is absolutely right to make it clear that a key part of any plan must be fundamental reform of the system of business rates.

It should serve as an urgent call to action for this Government that the British Retail Consortium’s retailer survey found that business rates were a factor behind two in three store closures in the last two years. While high-street stores are feeling the burden of business rates, their online competitors, which typically pay far lower business rates on their warehouses, have seen their profits boom, especially during the pandemic. The current system of business rates is simply not fit for the 21st century. It punishes investment and entrepreneurship and it hits the high street.

We thought that the Conservatives might have realised this, as their manifesto at the last election promised that they would

“cut the burden of tax on businesses by reducing business rates.”

They promised that that would be done via “fundamental reform” of the system, yet we read reports in the newspapers that the Chancellor has been too busy to pursue a business rates review. Rumours abound that the Government may even abandon the promise of a fundamental review of business rates altogether, so I would welcome the Minister taking this opportunity to quash those rumours. I urge him to confirm that the review of business rates is still going ahead, that its conclusions will include proposals for fundamental changes, and that those changes will be announced in the coming weeks.

We need that change because the business rates system is antiquated and not fit for the current economy. That is why, as my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chancellor, has set out, if we were in government today, as an intermediary step we would freeze business rates until the next revaluation, benefiting sectors such as retail and hospitality that are hit the most by this tax. We would raise the threshold for small business rate relief to give small businesses a discount on their business rates bills for 2022-23, ahead of more fundamental reform, and pay for that in the short term by increasing the digital services tax to 12% for one year and, in the longer term, with a higher global minimum rate of corporate tax for large multi- nationals.

Beyond that, a Labour Government would scrap business rates and introduce a new system that would incentivise investment, promote entrepreneurship and reward businesses that move into empty premises—and yes, it would involve large online tech giants contributing more. Both the immediate support we propose and our approach to fundamental reform would shift the burden of business tax towards the online giants. It would target the greatest support at high-street businesses that need it most, and it would support jobs for people across our country. That is what it looks like to tax fairly, spend wisely and get the economy firing on all cylinders, and that is what our high streets need.