British Retail

Jessica Lee Excerpts

Wednesday 6th March 2013 Westminster Hall

[Richard Harrington]

I more than welcome the inquiry. It shows that retailing is being treated seriously as an industry in its own right, rather than as just a mechanical part of the distribution chain. It contributes as much as manufacturing and other sectors. I warmly endorse what my hon. Friend says.

The ultimate answer to the question of choice in retail is whether the public are given a better service today. I argue that they certainly are. When I worked at Trewins, which was John Lewis in 1980, we shut on Saturday at lunch time, on Sunday and on Monday. Now the equivalent—the Intu shopping centre, formerly known as the Harlequin, in Watford—is, for better or for worse, open every day. People have the choice to shop all the hours they want. Similarly, from the small independent point of view, although I agree that the butcher, the baker and the candlestick maker are not there, the internet gives the public a huge amount of choice and very good service. Although the developments in the retail trade are muted in people’s minds by the shops, chains and household names that have closed down, the public are given a much better service.

We need only look at the effect on the economy. Again, to be parochial, the main shopping centre in Watford replaced a sprawling mix of businesses, including the smallest abattoir left in England, an old Sainsbury’s branch and lots of different warehouses. For the past 20 years, the main shopping centre has had 147 stores, but the important thing is that it directly employs more than 4,000 people, plus the distribution chain and all the businesses in it. The shopping centre contributes about £14.5 million in business rates, which is a tremendous amount. It has about 750,000 square feet of infrastructure, and has upgraded that whole part of town.

I am not saying that there have not been consequences. It would be wrong of me to say that things are all one-way and all about prosperity; I am aware of the effect that shopping centres have on other things, but they are economic powerhouses in their own right. By any standards, the shopping centre is a big business, employs a lot of people and contributes a lot to the economy.

Similarly, nationally, companies such as Westfield have come from abroad to invest significant amounts of money in what it sounds trendier to call “urban regeneration” than “retail”. The east end, White City and other places throughout the country are major, long-term investment projects. Westfield has invested about £3.5 billion since it came to the UK in 2000, and created 25,000 jobs. If it were another kind of business and that sort of growth were announced over 10 years, there would be headlines all over the place.

Although I accept that retail is not the total answer to our economic problems, we must accept what it does for employment, infrastructure and areas where the rest of the private sector and the public sector have failed completely. It is a significant and serious business, and its problems must be considered by Government. I am delighted to see the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) in the Chamber; I know that he is experienced in this subject. Government must turn their mind to retail, because it is such a significant employer and a significant contributor to the national economy.

[Jessica Lee (Erewash) (Con)]

I thank my hon. Friend for giving way and congratulate him on securing the debate. The issue of employment has been raised, but does he agree that apprenticeships are another of retail’s valuable contributions? Sectors such as retail and catering offer important apprenticeships. They certainly do in Erewash. I recently visited Anderson’s on the High street, an independent coffee shop and caterers offering apprenticeships. Next week is national apprenticeship week. It is another important aspect of this debate that we must not miss.

[Richard Harrington]

I very much endorse what my hon. Friend says. As I said, it is easy to think of retail as “Open All Hours” with Ronnie Barker or Young Mr Grace appearing and saying “You’ve all done very well”, but shops invest a lot of money in training staff, and they know that a lot of their capital assets lie in the skills of those staff. Retail used to be minimum-wage drudge work, but it is fair to say, despite my lack of success in the John Lewis hierarchy, that now the management teams in some retail firms are comparable with almost anything else in this country, and the work starts from apprenticeship level. I totally agree.

However, there are some industry issues that we need to consider, and I will speak of them as I perceive them; I am not in any way a spokesperson for the industry, but I have tried to observe it and take all things into consideration. Business rates are a significant issue. In many cases, they are a more important overhead than rent. I believe that the industry contributes just short of £24 billion a year in business rates. That is a direct contribution to the local and national economy, and it is a serious amount.

The way that rates are linked to the retail prices index means that average shop rates have more or less doubled in the past 20 years. As most other valuations in the Government system these days are being linked to the consumer prices index rather than the RPI, that seems a little unfair. The industry’s greatest disappointment, which seems to have merit, is that there was talk of a fundamental revaluation that would remove many of the anomalies in the system, but it has now been postponed. It seems to me that there is a legitimate argument that in the interim, until the system is properly reviewed, rises should be limited by linking rates to CPI instead of RPI.