Non-Domestic Rating (Multipliers and Private Schools) Bill (First sitting)

Lewis Cocking Excerpts

Committee stage
Wednesday 11th December 2024 Public Bill Committees

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

Q Thank you, Mr Gerrard. I am the Member of Parliament for cities and towns such as Wolverhampton and Willenhall, and we have a number of Co-ops and similar stores. I hear today that the Bill brings a welcome certainty and that the majority of Co-op stores will benefit from it. Co-ops and similar stores are important local employers and have been for generations within the community. I wonder whether you could share your thoughts on the impact of that.

Paul Gerrard: As I said before, local stores, of which the Co-op is an example, play a hugely important social role. They are also economic and commercial entities. We employ 55,000 people. The vast majority of my colleagues are either in stores—as in your constituency—or in our funeral care homes or our legal services business, so they are customer facing. What the Bill does is make our business model of small shops more viable, which means that we can continue to employ people.

It also means that we can continue to behave in line with our co-operative values and principles. As I said before, we have always paid the real living wage, with rates set by the Living Wage Foundation, and we have always sought to have a different kind of product in store, in terms of its ethical roots. The Bill will help us to continue to do all those things. On 21 December we will have done it for 180 years. The Bill will play a role in helping us, as will other measures that the Government have taken.

[Lewis Cocking (Broxbourne) (Con)]

Q Thank you for coming in today to give evidence. You have said that the Bill is going to make smaller stores more viable, and that it will affect your bigger stores. Can you give us a flavour of what that means for your business, and whether it will put you off doing bigger stores and make you concentrate on smaller stores? You have done analysis of where the Bill is beneficial to you, but have you done any wider analysis of what it means for the totality of the high street?

Paul Gerrard: In terms of broader analysis, we supply about 7,500 stores, including our own 2,500 stores. I would not term it deep analysis, but our impression from the conversations that we have is that the Bill will support those kind of shops—not just our own, but shops in local communities. The data I have seen that has been shared across the sector says that about 98% of stores have a rateable value below £500,000. If the limits are set at £500,000 and £51,000, it will significantly support those. The majority of that 98% have a rateable value below £51,000 as well. I cannot remember the first question, I am sorry.

[Lewis Cocking]

Q The first question was about whether it would put you off doing bigger stores and make you concentrate on smaller stores. Will you give us a flavour of what the Bill means for your business?

Paul Gerrard: Thank you. We are very much a convenience business, so the average size of our stores is about 3,000 square feet. I can think of a couple of stores that are bigger, but they are very much legacy stores from many years ago. In general, our approach is to open small stores—convenience stores—so the question about how the Bill will affect our decision to open bigger stores does not really apply. We are very much a small store operator.

[Martin Wrigley (Newton Abbot) (LD)]

Q Thank you for coming today. The Co-op is a vital element of many of the communities in my area in south Devon. It is a mainstay of many communities. In the Bill I am interested in the jump between the small business rates and the large business rates based on a rateable value of £51,000. Is that an issue for you in terms of deterring expansion and improvement of stores, or is that not something that you worry about?

Paul Gerrard: As I think I said in an answer to an earlier question, it is one of the factors that we will bear in mind. I do not think it would necessarily be the deciding factor to either open or keep open a store. There will be other things that we would take into account, such as crime or a change in demographic and footfall. It is a factor, but I am not sure that it is the determining factor.

--- Later in debate ---

[The Chair]

I will allow you a brief comment, Mr Woodall, but that is out of scope of the Bill.

Edward Woodall: I was trying to demonstrate earlier that where you put the multiplier depends on how much businesses have to invest as a result. If you are a store but just outside the small business rate relief and the multiplier is put down by 5p, you can save £1,000, or down by 20p and you save somewhere just over £3,000. There are options about the different things you can invest in. The lower that we are able to put the multiplier, the more opportunities there are to invest. One of the investment areas, and £1 billion of what our sector invested last year, is a defensive investment in CCTV to ensure that stores and colleagues are safe. Hopefully, that will help us in future.

[Lewis Cocking]

Q In answer to the first question, you said that businesses could save approximately £1,000 or £3,000 depending on size, and then went on to say where they could use that money to make investments in their business or what have you. The businesses I speak to in Broxbourne say that they will have to put that money aside for other measures in the Budget, and in your answer you alluded to businesses being worried about the other measures in the Budget. How do those two marry up? Obviously, with those savings, they cannot invest in their business and put money aside for the other measures in the Budget. What proportion of your members are saying each one of those things?

Edward Woodall: That is a good observation. Some of them might take that to invest in additional service provision or the things in the Bill that I described. Others might have to say, “Look, the cumulative impact of the costs that we are facing is big, so we have to use that money in the space of continuing to trade.” That is starker with small business rate relief—about a quarter of the retailers say they use small business rate relief to be able to stay trading, with the changing operating environment as well. Different businesses will make different operational decisions about how they use the money. Some will try to address that cumulative burden and others will invest in other locations. I do not have a figure for the entire sector on how they will allocate that.

[Lewis Cocking]

Q Have you asked your members that question?

Edward Woodall: We talk to them all the time about such questions. Perhaps it is something we can address in our written evidence to the Committee.

[Mr Sewards]

Q I will be brief. We have heard a lot about the cost of measures in the Budget, including in the Bill. Do you accept that there is some positive benefit in providing certainty to business—certainty that has been missing for a while? The measures in the Bill are designed to provide certainty over a longer period, but the measures in the Budget were designed for that as well.

Edward Woodall: On the Bill, I think I have said on a number of occasions that we welcome the fact that it brings more structure and that the overall principle is about long-term support for retail, hospitality and leisure businesses, and the areas in which they trade. In terms of that principle, we very much welcome the Bill; overall, businesses welcome greater certainty about how they invest into the future, so I welcome that in the context of the Bill.