Retail Strategy

Liz Twist Excerpts

Wednesday 10th July 2019 Westminster Hall

[Liz Twist (Blaydon) (Lab)]

I beg to move,

That this House has considered the development of a retail strategy for the future.

It is an honour to serve under your chairmanship in this important debate, Sir David. Nearly a quarter of jobs in my constituency are in retail, so it is important to me that the retail sector is strong and vibrant. The fact that it provides 8,000 jobs, or 23% of the total—the highest in any constituency—is perhaps hardly surprising, given that Blaydon has Metrocentre, which is still the largest indoor shopping centre in the UK. However, there are also many local high streets in villages, towns and communities across my constituency, with small businesses that have to face huge challenges to survive, particularly given the closure of bank branches and the loss of footfall that that brings.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I thank the hon. Lady for giving way so early in her speech. Does she agree that, with online banking, online retail and edge-of-town and out-of-town shopping, the high street has seen a radical transformation in the past few years, and not for good? We need a comprehensive strategy to save the high street in the next five to 10 years; otherwise, we will all be the worse, including future generations.

[Liz Twist]

I most certainly agree that we are seeing a radical transformation and that we need a vision for the future. Our strategy must do more than just deal with short-term problems; it must look at the longer term. That will the burden of my speech.

Since I became the Member of Parliament for Blaydon just over two years ago, it has been my sad lot to visit stores and talk to too many staff who face store closures, including at Toys R Us, Homebase and House of Fraser. Thankfully, some of those stores, such as the House of Fraser store in Metrocentre, have had a respite, but their future remains uncertain.

[Faisal Rashid (Warrington South) (Lab)]

I am happy my hon. Friend has secured this important debate, and I congratulate her on doing so; she is making an excellent case. Some 74,000 retail jobs were lost in 2018, and the town centre vacancy rate in April 2019 was 10.2%—the highest ever. Does she agree that the UK retail industry is in crisis and needs immediate, comprehensive and radical action?

[Liz Twist]

I most certainly agree that radical action is needed so that we can stop the situation teetering into crisis and think of a plan that will allow the sector to remain vibrant and become stronger. As my hon. Friend points out, there are some really challenging facts.

I have visited larger stores and talked to staff, but I know—because people tell me when I go on social media —that many other stores, which may be smaller or less high-profile, have had to give up the struggle, although I did not know about them until later, which is very sad. I am keen to do all I can to support the retail sector in my constituency.

[Mike Amesbury (Weaver Vale) (Lab)]

Part of the solution has to be business rates; that is what is fed back to me in my community. We have had grand talk and some baby steps forward from the Government, but is it not now time for radical reform to bring in investment and protect enterprise?

[Liz Twist]

Business rates certainly feature strongly in the study by the Housing, Communities and Local Government Committee, of which I was a member until recently, and in submissions to me by organisations such as the British Retail Consortium and by individual stores. We certainly need to look at that issue, which I will return to.

As I said, I have visited different places, and there are more closures that I do not know about. It is not just about jobs, although they are hugely important, and nor is it just about empty shops; it is about the impact on our local communities, especially those such as Blaydon that are made up of several smaller towns. Shops are such a central part of our high streets; from Crawcrook to Chopwell, from Birtley to Blaydon, and everywhere else in my constituency, they are a really important part of making our high streets vibrant.

A few weeks ago, I had the pleasure of visiting a shop in Birtley called High Street Quilting—a real Aladdin’s cave that stocks every imaginable thread, fabric, tool and design for quilters and embroiderers. People in one of the back rooms were getting guidance on developing their dressmaking and upholstery skills, and the shop was due the very next day to have an embroidery class, which was hugely well subscribed. Such shops create real variety and focus for our high street, but the owner told me about the difficulties she faces as a small business owner in making ends meet, even with the small business rates relief, and in ensuring that she can continue to employ people and move forward. We must not forget the small businesses when we talk about the bigger picture.

We face a changing external environment as a result of online shopping and of failures in strategy that have led to venture capital taking over stores, with scant regard for retail. The British Home Stores closures happened before my time as a Member of Parliament, but I know from talking on the doorstep to people who worked for BHS what a traumatic experience that was.

Nationally, retail employs 3 million people, with an additional 1.5 million jobs dependent on the success of the retail industry. Retail produces 11% of the UK’s economic output and approximately £7 billion in business rates, which is far higher than any other industry. It is the largest private sector employer in the UK and the second largest contributor of tax. The British Retail Consortium estimates that 74,000 retail jobs were lost in 2018, as my hon. Friend the Member for Warrington South (Faisal Rashid) noted. Sadly, that trend is expected to increase in future years. We should remember that the workforce are predominantly women, and many of their jobs are part-time, so the situation has a disproportionate effect on some of our constituents.

I am disappointed that the Government’s industrial strategy has so little to say about the retail sector. Given that 9% of jobs across the country are in retail, it is really disappointing to see the sector being given such scant focus.

[Sir Mark Hendrick (Preston) (Lab/Co-op)]

Like many hon. Members present, I have seen my main retail high street, Fishergate in Preston city centre, lose many top brands. They are being replaced by charity shops, betting shops, tattoo parlours and vaping shops. I recently met the leader of Preston City Council and impressed on him the need for a retail strategy in Preston. That needs to happen in councils up and down the country; as my hon. Friend points out, the Government are not going to do it for them. I really fear for the future of our towns and centres and for their ability to retain retail.

[Liz Twist]

Indeed. One of the Housing, Communities and Local Government Committee’s findings was that local authorities have an important part to play in ensuring the future of our high streets. I very much welcome my hon. Friend’s engagement with his local authority to ensure that it takes measures to improve what will be a changing high street, but a lively one.

Returning to the industrial strategy, I do not believe that retail has been given enough focus. I am aware that the Retail Sector Council has been set up, with representatives from the industry liaising with the Government, and that a number of workstreams have been drawn up and are already producing work. However, I fear that what we are doing in those workstreams is looking at the detail of current problems, rather than doing what we need to do, which is to produce a longer term strategy and vision to build and strengthen the retail sector, addressing the challenges we know about and those that may yet come, which we need to scan the horizon for.

There have been some examinations recently of the situation faced by high streets in particular—of course, high streets are one part of the retail sector, but not the whole part. I have already referred to the report by the Housing, Communities and Local Government Committee, which is called “High streets and town centres in 2030”. As we have heard today, many such reports have identified the current business rates system as a real problem and noted the huge disparity in costs between online businesses and shops, including the rents that shops pay. Clearly, that is not the only issue, but when many of us heard about the online tax in the Chancellor’s last Budget statement, we thought it would be a means of addressing this problem of the disparity between online businesses and physically present businesses and shops.

[Faisal Rashid]

Will my hon. Friend join me in urging the Government to heed the call by the Union of Shop, Distributive and Allied Workers to take urgent action to save our shops by implementing a comprehensive and co-ordinated industrial strategy for the sector?

[Liz Twist]

I thank my hon. Friend for his intervention. He could have been reading my mind.

[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

All our minds.

[Liz Twist]

Yes, indeed. I was going on to say that I was really pleased that USDAW, the shop workers’ union, launched its industrial strategy for retail last month to a packed room. I was really impressed by the work that had gone into developing that strategy and by the outcomes it wants to achieve, which are presented under three helpful headings: “Economy and Community”, “People and Productivity” and “Changing Perceptions—Retail Jobs are Real Jobs”. Even in the opening speech of a debate, where I am not so restricted for time as other speakers might be, I do not have enough time to cover all the detail in those three areas of the report. However, I certainly commend it to the Minister, if she has not seen it already; she should look at it, because it has a wealth of positive points and positive ways forward.

What is USDAW calling for? Under the “Economy and Community” heading, it is calling, as others have, for a fundamental reform of business rates; a review of town/city centre parking charges and other transport issues; reform of the tax laws to ensure that companies pay their fair share of tax—for example, by preventing the avoidance of corporation tax—and to create more of a level playing field between online and bricks-and-mortar retailers, which I have already touched on; closing the pay gap between chief executive officers and the lowest paid workers; stronger corporate governance rules to curb asset stripping, which has been one of the issues the retail sector has faced; ensuring that business failure cannot be rewarded with excessive bonuses and pay-outs, as was the case with British Home Stores; and a review of the role and functions of the Competition and Markets Authority, in light of the increase in proposed mergers within the sector—USDAW is really encouraging us to consider the CMA’s role to see whether it reflects the changing retail environment.

Under the heading “People and Productivity”, USDAW is calling for a minimum pay rate of £10 per hour for all workers, irrespective of age; the introduction of legislation to tackle underemployment and insecure work by providing a minimum contract of 16 hours a week for those who want to work that long; contracts that reflect the actual hours that people work and not the hours on their paper contract, which are often exceeded; and legislation to ensure that workers have guaranteed seats on the boards of large companies, with the same duties and responsibilities as other directors, and with measures put in place to ensure that those in such seats reflect the gender breakdown of staff across the company.

The third area is “Changing Perceptions—Retail Jobs are Real Jobs”. That is something that is really close to my heart, having met so many shop workers over the years; in fact, my mum was a shop worker for many years, so it really is dear to my heart. USDAW is calling for an increased focus on retail across Government policy and decision-making mechanisms, to reflect the importance of the sector; promotion and recognition of the benefits of working in retail, to help to develop talent and increase retention levels, because retail offers employees greater flexibility than most sectors, and often allows them to work around their family/caring commitments or studies; and a challenge to the overt perception that women simply work in retail for “pin money”, or that retail is just a stopgap.

A key part of challenging those perceptions is the skills agenda, which means recognising that retail jobs are not just jobs that anyone can do. Dealing with customers day in, day out is a hugely important skill. First, it is a contribution to the social environment that all of us live in; indeed, for many people, it may be the only contact they have with another person. Also, it is a huge skill to deal politely and kindly with other people, and that needs to be recognised. However, further skills will also need to be developed in the future. As we have heard, retail is changing, and different skills are needed, for example in IT and other areas. Therefore, there needs to be some kind of clear path for career progression, to increase both productivity and job satisfaction. I was going off the USDAW script a bit there, but I feel very strongly about that.

I will return to the Government’s industrial strategy. I have already said it is lacking in detail, given the size and importance of the retail sector. The Retail Sector Council brings together Government and industry to

“seek to encourage growth and positive change in the sector as it adapts to rapidly changing consumer habits”.

The workstreams for the Retail Sector Council include business costs; skills and lifelong learning, which I have just touched on; the industrial strategy; employment; the circular economy, which I am told is the environment, wrapping and things such as that; and consumer protection. From the council’s website, I understand that its work will feed into the work of Government Departments, where appropriate, to contribute to and inspire initiatives that support the council’s objectives. It will work, for example, with the Ministry of Housing, Communities and Local Government around high streets and communities.

One thing I would stress, as members of the British Retail Consortium have already stressed, is the need for much greater co-ordination between Government Departments, to ensure that when a decision is made by one Department, the knock-on effects are not felt by another. The kind of petty example I refer to quite often is the need, when we talk about, and perhaps reform, business rates, to consider the impact on local government. We must seek to ensure that that longer-term issue is not just passed to someone else.

However, there are other issues to consider as well. Clearly, there are issues about benefits, and particularly in-work benefits, which will also affect the economy, as well as decisions by the Department for Environment, Food and Rural Affairs. We all know that it is complex to achieve such co-ordination, but it needs to happen. We also need a retail sector deal, to put retail on a par with other sectors that have already launched such initiatives. As I say, with 11% of the workforce in retail, we really need that deal.

I have a couple of specific things to ask of the Minister. The first is to urge her to look at USDAW’s industrial strategy for retail. It contains a huge amount of detail—I have just touched on some of it—and looks at the growth and development of the retail sector in the future. I very much hope that she and her officials will meet USDAW to go through its report, which is an important document, and will look at its proposals. Secondly, the Minister should look to establish a real vision for retail, not just by tackling known problems, but by developing a vision for the future and setting up a retail sector deal to give retail its due importance alongside other sectors.

[Several hon. Members rose—]

--- Later in debate ---

[Kelly Tolhurst]

The hon. Gentleman is quite right. As he will know, when the Retail Sector Council was set up last year, we set its priorities. The six workstreams and the priority workstreams have been agreed. We are working for outcomes. The beauty of the Retail Sector Council is that it is the retail sector coming together with Government to find solutions to the future challenges. It includes not only the bricks-and-mortar retailers, but the online retailers and the small independent retailers. In the council, the sector is working with Government to move forward and bring forward plans and proposals that will benefit and aid the sector.

[Liz Twist]

Will the Minister agree to set up a retail sector deal to further promote the work of the retail sector?

[Kelly Tolhurst]

Absolutely, but the hon. Lady will know that all the sector deals are being driven by the sectors themselves with the support of Government and with strong leadership and great ideas. My wider hope for the retail sector is that we will see that deal delivered by the Retail Sector Council as soon as possible.

Costs to business is another workstream, and a number of Members raised them. As part of that workstream, the co-chair and I are meeting the Financial Secretary to the Treasury next week to discuss some of the preliminary findings on costs to business in the retail sector. A large survey of the entire sector was carried out. That area is of big interest to me in terms of how we levy taxation in the future. The skills and lifelong learning workstream is running in parallel with the costs to business workstream. Some of the early work on that is being led by Amazon and a small working group, and that is proving useful.

Alongside the work of the retail sector, the Department regularly considers a wide range of policies. My officials are working across Whitehall on policies that affect the retail sector. A number of Members have mentioned support for our high streets. Members may know that the high streets Minister, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), has recently taken on a joint portfolio with my Department. As I am the retail sector Minister, we work closely on joined-up thinking on retail and high streets. We have the £1.6 billion action plan for high streets, which includes the £675 million future high streets fund. We are seeing 50 organisations move to the next stage in the development of the plans, which will enable local authorities and local populations to drive the development of their towns. We have the taskforce, which will work with local authorities across the country to deliver help for those that need to increase their retail space.

I will sit down now, because I recognise that the hon. Member for Blaydon may want to come in. I am happy to have another meeting with her on the other questions she asked.

--- Later in debate ---

[Liz Twist]

I thank all Members who have contributed to a lively and interesting debate on the retail sector. They have shown real enthusiasm for it.

Motion lapsed (Standing Order No. 10(6)).