Future of Town Centres and High Streets

Debate between Karen Bradley and Marcus Jones

Tuesday 17th January 2012 Commons Chamber

[Mr Jones]

Dudley is an important area and the hon. Gentleman makes a strong case for it, but I think it probably ranks somewhere behind my constituency in relation to this matter.

In the last few days alone, we have seen some long-standing store chains, such as Blacks Leisure, Peacocks and Barratts, all enter administration. In the words of Mary Portas,

“our high streets have reached a crisis point,”

a statement with which I am sure many people up and down the country will agree.

A number of factors have led to the decline of our high streets, although the main reasons are undoubtedly the steady rise of out-of-town retail shopping malls, together with the dramatic impact of the arrival of internet shopping, which has soared. Back in 2007, it accounted for 4.8% of retail sales, but last November it was found to account for 12.2%. That is a challenge to our town centres, and it will be greatly exacerbated by the increased use of mobile phone technology, which is broadening the internet spectrum.

[Karen Bradley (Staffordshire Moorlands) (Con)]

I thank my hon. Friend for securing this very important debate. May I share with him the experience of my local town of Leek, where the totally locally Leek initiative has been developed by independent shopkeepers? The idea is that if everybody who lived in Leek spent £5 each week in a local shop rather than on the internet, it would be worth £4 million to the local economy. Does he agree that we need initiatives such as that to promote local high streets?

[Mr Jones]

It is important for people to try to get the best deal in terms of their shopping habits, but reliance on local shopping is also important. Only in that way will we secure the future of our local town centres and high streets.

Small Businesses

Debate between Karen Bradley and Marcus Jones

Tuesday 7th September 2010 Westminster Hall

[Mr Jones]

I thank my hon. Friend for his comments. He is absolutely right. The same comments are coming from small businesses in my constituency.

[Karen Bradley]

I apologise for intervening so soon after the last intervention, but I wanted want to say something about Her Majesty’s Revenue and Customs, which is another area of Government intervention that could very much help small businesses with their cash flows. I have many letters in my postbag from small businesses that are struggling to meet HMRC’s demands to pay very large bills, particularly for VAT. If HMRC could in some way help such businesses over this difficult period in the recession, I am sure that that would be much appreciated.

[Mr Jones]

I thank my hon. Friend for her comments, and I will be interested to hear the Minister’s views about HMRC. I, too, have heard of small firms in my constituency struggling to balance their cash flow when they have large VAT bills to honour.

We must acknowledge that we perhaps need to exert some influence on larger businesses over terms of credit and, as my hon. Friend the Member for Burton (Andrew Griffiths) put it, showing some social responsibility. However, we also need to acknowledge that the Government are limited in how far they can interfere with the way in which businesses are run. In addition, we need to be mindful of the global competitiveness of larger businesses in the modern day.

Will the Minister consider what the Government can do to encourage better payment terms for our small businesses? The extension of the credit terms and conditions of small businesses has inevitable consequences. It is vital that many firms be able immediately to access a bank overdraft when faced with the measures used by larger businesses. However, evidence from my constituency suggests that banks can be unwilling to give such credit facilities, even to long-standing businesses with strong trading records, without demanding security in the form of the business owner’s home, which is often quite an issue.

I have obtained information from the Forum of Private Business suggesting that interest rates on loans that are not secured against the business owner’s property can often be double those on loans secured against commercial or residential property, and one of my colleagues alluded to that. The problem is that many business owners, and particularly long-standing ones, do not necessarily want to put their homes on the line, particularly if they are reaching retirement age and do not consider it worth taking the risk.

That is what happened in the case of a manufacturing business in my constituency that I heard from during the general election campaign. The firm has not been afforded the credit that it needs, even though it has a strong order book. It has been trading for 50 years and employs about six people, but it is on the verge of ceasing to trade. It will close the doors and sell its commercial property because that is a better proposition for the business’s owner than keeping trading and employing people.

If such things keep happening, they will have an extremely negative effect, particularly in the engineering sector, where many small business owners are probably of a reasonable age, given the deteriorating uptake of new people into the industry. Many people will be in their late 50s or early 60s and might consider it better to close their firms than to keep going. That would have a very negative impact on what we are trying to achieve.