Arcadia and Debenhams: Business Support and Job Retention

Paul Scully Excerpts

Wednesday 2nd December 2020 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement on support for business and the retention of jobs on the high street in light of the announcement of Arcadia entering administration and Debenhams going into liquidation.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Speaking as the retail Minister, let me say that I hope the right hon. Member for Doncaster North (Edward Miliband) realises that although the Secretary of State is not here, we take this incredibly seriously. That is why I want to focus on the detail, because it is a worrying time for the retail sector, particularly for those affected by the announcements this week.

On Monday, Arcadia Group Ltd, which employs approximately 13,000 people, appointed administrators, who are assessing all options available to the group. They will honour orders made over the black Friday weekend. No redundancies have yet been announced and existing sales channels will continue to operate while administrators evaluate options. The Secretary of State has written to the Insolvency Service asking that it expedites consideration of the administrators’ report. Yesterday, Debenhams, which employs approximately 12,000 people, announced the decision of administrators to wind down the company. No redundancies have been announced and existing sales channels will continue to operate while administrators evaluate options. We know that this will be a worrying time for employees and their families, and we stand ready to support them. I pay a particular tribute to the hard-working staff, who have kept these well recognised businesses going in difficult times for so long.

Although the Government have no role in the strategic direction or management of private retail companies, we are in regular contact with both companies and the administrators in order to understand fully the situation they are facing. The coronavirus crisis has made life difficult for retailers such as Arcadia and Debenhams, particularly those that were already facing challenging trading conditions before the pandemic. We acted quickly at the start of the pandemic to deliver one of the most generous and comprehensive economic packages in the world. It included: the coronavirus job retention scheme, which up to 30 September had provided £7.7 billion-worth of support to companies in the retail and wholesale sector; removing all eligible properties in the retail, hospitality and leisure sectors from business rates for 12 months—that is worth more than £10 billion; cash grants of up to £25,000 for retail, hospitality and leisure businesses with a rateable value of between £15,000 and £51,000; more than £50 billion in business loans, which supported 9.6 million jobs and provided flexibility; and legislation to protect commercial tenants from eviction.

Through the plan for jobs, we have also announced a series of measures to protect, support and create jobs, including our £2 billion kickstart scheme and a doubling of the number of frontline work coaches, which will be important in this situation in particular. The Government have committed to supporting the retail sector, and we are working closely with industry through these unprecedented times, particularly to ensure the safe reopening of non-essential retail today. On Monday, my right hon. Friend the Communities Secretary encouraged local authorities to allow shops to open for extended hours, to accommodate more shoppers safely in the lead-up to Christmas. I will continue to work with the sector to meet future challenges. Indeed, I will co-chair the next meeting of the Retail Sector Council tomorrow to discuss our strategic approach to the sector. I have regular retail calls, including one last week, with representatives from Arcadia among the retailers on that call. We are confident that the sector has the skills, knowledge and drive to bounce back.

[Edward Miliband]

Let me join the Minister in expressing deep sympathy for those who are at risk of losing their jobs. The test of Government, and indeed the House, is whether that sympathy translates into action, so I have four specific questions for him.

First, Philip Green owes workers at Arcadia a moral duty. His family took from the company a dividend worth £1.2 billion, the largest in UK history, more than three times the size of the pension deficit. Workers at Arcadia should not pay the price of Philip Green’s greed, so will the Minister now publicly call for Philip Green to make good any shortfall in the pension scheme, and will he ensure that the Pensions Regulator takes all possible steps to make sure that that happens?

Secondly, we need to learn lessons. In the summer, Labour tabled amendments to the Corporate Governance and Insolvency Bill to make pension fund holders priority creditors when businesses went bust. The Minister said it was not necessary. Does he now agree that that was a mistake, that that change would have better protected the pensions at Arcadia and that this should be put right through legislation in the future?

Thirdly, on the workers at Debenhams and Arcadia facing redundancy, given the scale of redundancies and the grim economic backdrop, will the Minister look at providing specific and targeted help for them to get back into work? Fourthly, we have an emergency on our high streets, with an estimated 20,000 shops closing and 200,000 workers losing their jobs since the economic crisis began. While we welcome the support that has been provided, will he recognise that the Government must do more: extend the rent evictions moratorium beyond December, when it is due to expire; increase support for hospitality businesses, which was called for across the House yesterday; and address the massive disadvantage that high street businesses face around business rates compared with online retailers?

Today is a day of great news on the vaccine, but the Government have a massive responsibility to preserve the businesses and jobs we will need on the other side of this crisis. They are still not acting on a scale that meets the economic emergency our country faces. They need to do so.

[Paul Scully]

I am grateful to the right hon. Gentleman for raising some really important points. On pension schemes and support for those facing redundancy, the majority of defined pension schemes are run effectively. We are fortunate to have a robust and flexible system of pension protection in the UK. The independent Pensions Regulator has a range of powers to protect pension schemes, and it works closely with those involved. For schemes where the employer goes insolvent, the Pension Protection Fund is there to help protect the members. Anybody already in receipt of a pension will continue to be paid, and other members will receive at least Pension Protection Fund compensation levels. The Pension Protection Fund is confident that its funding plan investment approach positions it well to weather the current market volatility and future challenges.

It would not be appropriate at this stage for Ministers to comment on individual cases, which are a matter for the regulator. However, in respect of staff facing possible redundancy, the Department for Work and Pensions’ rapid response service has been in ongoing conversations with Debenhams and has now been in contact with Arcadia. Both have been offered support by the rapid response service, including connecting people to jobs in the labour market, helping with job search—including CV writing, interview skills, where to find jobs and how to apply for them—helping to identify transferable skills and skills gaps linked to the local labour market and what benefits they may get and how to claim. I talked about the fact that we have doubled the number of workplace support staff in Jobcentre Plus. Clearly, knowing where the big stores are, for Debenhams in particular, we will be able to offer that sort of targeted support.

The right hon. Gentleman talked about his proposed changes to the Corporate Insolvency and Governance Bill. This was a matter of balance, because elevating pension debts, which can often be quite large, will by its very nature dilute the amount available to trade and credit suppliers, but also to other suppliers, including people with unpaid wages. It is trying to get that complexity and balance right.

Finally, the right hon. Gentleman talks about hospitality and support for other sectors. Clearly, the high street is an ecosystem—it is not only about shops and retail. We need to make sure that we do as much as we can to continue to wrap our arms around the economy at this particularly challenging time. As he acknowledges, there is light at the end of the tunnel, but we must not take our foot off the gas. We must remain alert, in terms of our own behaviours, as community members going up and down the high street, shopping local where we can to support retailers as they remain open, but also as a Government, making sure that we support the retail and hospitality sectors through both the support that I mentioned but also through encouraging them to be able to trade and remain open in all three tiers as best we can.

[Suzanne Webb (Stourbridge) (Con)]

I am sure the thoughts of the whole House will be with employees of Debenhams and Arcadia, who face huge uncertainty this week, particularly in the run-up to Christmas. These are long-standing bastions of the high street. However, both organisations have been struggling for quite some time; indeed, Debenhams has been in administration since January. While no redundancies have yet been announced, many of my constituents will be affected. Can my hon. Friend assure me that, if the worst were to happen, the Government are ready to support anyone affected, whether through jobcentres or universal credit?

[Paul Scully]

My hon. Friend is absolutely right. I know her constituents will be concerned about this. We are prepared to step up concentration within Jobcentre Plus. We will make sure there is support for people in finding jobs and for retaining as many jobs as possible on our high streets.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

I am sure the Minister agrees that there is a great deal of public affection for the Arcadia brands and in particular for Debenhams. While we must hope that redundancies can be avoided wherever possible, this is a sad day for our embattled high streets. All our thoughts are with the thousands of workers, including those in my constituency, many of whom have given years, or even decades, of service in retail, who will be devastated by this news. They must be given all the help they can get to ensure that all their pension rights are retained. Will the Minister ensure that Sir Philip Green’s obligations to pensions are met, and will his Department work with trade unions to make sure that the workers are treated fairly and adequately supported through the process?

Like others, many of the workers will face difficulty in putting food on the table and finding a new job or retraining in a crowded market. They will need the safety net of universal credit to make ends meet. I urge the Minister to use his best efforts and to work with colleagues to retain the £20 a week uplift and to scrap the planned benefit cap that will cost an average of £250 a month. Universal credit is already not enough; taking away the uplift is taking food from people’s tables.

We need to remember that many small businesses in local supply chains will be affected by the news. Some of them will not survive without support, while the owners of others will be joining the 3 million people who have been excluded from support. The Government cannot continue to ignore them. I urge the Minister again to finally get support to this group, who are becoming increasingly desperate.

[Paul Scully]

The existing commitments made to the Pensions Regulator do indeed need to be kept—it is important to say that.

The hon. Gentleman talks about support for employees. If people need financial support quickly, they may be able to claim universal credit and/or employment and support allowance. Our plan for jobs includes a series of measures to protect, support and create jobs, because it is important to get the people affected back into work as soon as possible. We have our £238 million job entry targeted support programme to support that.

The hon. Gentleman also talks about the possibility of suppliers losing out. Administrators will take over the company and seek to establish the position regarding suppliers. The trade credit reinsurance scheme is designed to support businesses coping with the economic impacts of covid-19 and to ensure that there is adequate confidence and credit in supply chains.

[Nickie Aiken (Cities of London and Westminster) (Con) [V]]

As my hon. Friend is aware, the Arcadia Group is headquartered in my constituency and its brands, including Debenhams and Topshop, have their flagship stores on Oxford Street. Covid has the potential to be the straw that breaks the camel’s back for bricks-and-mortar retailers. The New West End Company and I welcome the continuing support of my hon. Friend and his Department for the retail sector. I note the Government’s announcement this week on extending shopping trading hours for Monday to Saturday until January but, particularly in the short term, an extension of Sunday trading hours would be of huge benefit to retailers. Will my hon. Friend support me, The Sun on Sunday newspaper, retailers such as Marks & Spencer and others who are campaigning to extend Sunday trading?

[Paul Scully]

I look forward to joining the New West End Company and, I assume, my hon. Friend on Saturday to celebrate not only Small Business Saturday but traffic-free shopping in the west end. The west end accounts for 3% of the entire UK economy and many, many jobs. We do not propose to extend Sunday trading at this stage, but we are extending shopping hours throughout the weekdays. We want to work with local authorities to make sure that they can support the safe return of shoppers to high streets up and down the country, including in the west end.

[Darren Jones (Bristol North West) (Lab)]

The collapse of Arcadia and Debenhams are two big examples of the broader challenge of survival in the high street-based retail sector. Every job lost and every store closed is devastating for families and communities across the entire country. The Business, Energy and Industrial Strategy Committee has today written to the Secretary of State, and I know we will have full answers in due course, but may I ask the Minister one specific question about support for small businesses in the retail supply chain? I wish to push him a bit further on whether there will be specific support—perhaps a taskforce—for small retail businesses, to help with the hundreds of millions of pounds of orders that could go unpaid.

[Paul Scully]

I cannot give specifics on a taskforce or any other group, but we will look acutely at what we can do for supply chains and the future of the high street. When flagship stores like the 200-odd-year-old Debenhams leave our high streets, it is so important to make sure that we have a co-ordinated response. I will happily work with the hon. Gentleman on that.

[Caroline Nokes (Romsey and Southampton North) (Con) [V]]

My hon. Friend, and the whole House, is concerned about the numbers of jobs potentially lost in the Arcadia Group, but we also have to be concerned about those employed by microbusinesses, perhaps without premises, who have so far not benefited from Government schemes to support them. Will he think again about those who so far have not had Government support and may well be adversely impacted by the news we have heard about Arcadia if they work in the retail supply chain?

[Paul Scully]

My right hon. Friend raises a really important point. We have wrapped our arms around the economy, but clearly it is very difficult to do things at pace to cover everybody. We will always make sure that we reflect on what happens, to help as many people as we can and try to fill the cracks as best we can.

[Sarah Olney (Richmond Park) (LD)]

I, too, express my sympathies to all those employees of Debenhams and the Arcadia Group who find themselves out of work so close to Christmas and in such an uncertain time. Will the Minister’s Department work with local authorities to support them to offer more flexible rates terms to new businesses that want to come in and set up in the large voids that a lot of town centres will be experiencing in their retail spaces? Those voids affect town centres and communities. What can the Department do to work with local authorities to lower the barriers to new entrants into the retail sector?

[Paul Scully]

There are plenty of things on which we can work together with the sector and, indeed, the whole gamut of British high street businesses, including by talking about getting the rent balance right between landlords and tenants, as well as rates, as the hon. Lady says. The Economic Secretary to the Treasury is joining me on tomorrow’s Retail Sector Council call that I mentioned, to talk about the fundamental business rates review. I hope we will be able to work with local authorities to get that flexibility.

[Marco Longhi (Dudley North) (Con)]

Does my hon. Friend agree that Dudley Council and other local leaders in my constituency will play an instrumental role in rebuilding and revitalising the high street? Will he confirm that the high streets taskforce will stand ready to provide whatever advice may be needed in this endeavour?

[Paul Scully]

I know that my hon. Friend works tirelessly for his constituency and local economy. It is so important that we get together to look at the high street, because many of these conversations were about what the high street will look like in 10 or 15 years’ time, but now they are about what the high street will look like next year and maybe only the year after. We have to get a speedy but holistic response.

[Mr Clive Betts (Sheffield South East) (Lab) [V]]

The business rate relief for retailers this year has been welcome, but it was obviously not sufficient for Debenhams and Arcadia and all their employees, who will tragically lose their jobs just before Christmas. There is a fundamental unfairness in the fact that Amazon pays only 0.7% of its turnover in business rates and high street retailers pay 2% or more. Last year, the Housing, Communities and Local Government Committee suggested that the Government look at bringing in a digital sales tax and use the money to provide long-term business rate relief for retailers on the high street. Given that the Government promised to look at business rate reform in 2015, will they now get on with it and give that certainty of reduced business rates to the high street as a matter of urgency?

[Paul Scully]

That is an important question, and it is exactly why we are doing fundamental business rates reform. The first stage of the consultation has ended, and we will respond in the new year, but we need to have a comprehensive approach to tackle this both online and offline.

[Greg Smith (Buckingham) (Con)]

The Risborough basket is an innovative scheme founded by Princes Risborough Town Council in my constituency, with a mission to keep the pound in the town, enabling local shoppers to buy from small independent retailers and have their purchases personally delivered. It is a real boost to those high street businesses, but in setting up the scheme, they have come across a number of regulatory burdens. Will my hon. Friend join me in congratulating everyone who set up the Risborough basket and commit to working with them, so that we can get rid of those regulatory burdens and ensure that such schemes can help high streets up and down the land?

[Paul Scully]

The Risborough basket is one of those brutally simple schemes that are from the grassroots up. It is fantastic to hear about that innovation, and I would love to see what we can do to spread it across the country, never mind working with the council to get rid of some of the burdens in bureaucracy and regulation to help it prosper.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op) [V]]

Mr Speaker, thank you so much for the opportunity to ask this young Minister to take a message back to No. 10 and the Chancellor of the Exchequer. As someone who worked in retail as a young man, and as a Co-op Member of Parliament, I know about retail. We have a workforce facing redundancy and hardship at Christmas. What we want from this Government is a strategy and leadership, not crocodile tears. A fifth of young people have lost their jobs. With 20,000 jobs, the kickstart programme has hardly touched young people’s lives. Will he get on with it and take that message back to No. 10?

[Paul Scully]

The hon. Gentleman talks about me being young, which he can do many times over, but as he says, retail is largely staffed by young people and those on comparatively low pay, so there is so much we can do. The strategy comes not just from Government but from working with the sector. The Retail Sector Council can take a long-term view, but we can also work with retailers on the short-term covid response. This is something for all of us to tackle.

[Laura Farris (Newbury) (Con)]

Not many of my constituents will shed a tear for Philip Green, but we should be profoundly concerned about the 25,000 jobs at risk of redundancy. The high street has been under unprecedented pressure. I welcome the remarks that my hon. Friend made about the business rates review, but will he commit this afternoon to an extension of another six to 12 months in which rates are either reduced or reprieved, to give the high street the best chance of recovery?

[Paul Scully]

I know that those in the Treasury will have listened to that, and they are very aware, particularly in relation to retail and hospitality, of the cliff edge that comes when business rates are due to return at the end of April. We will certainly look at that, and an announcement will be forthcoming.

[Christian Matheson (City of Chester) (Lab)]

In 1791, Susannah Towsey, a draper and haberdasher, moved to more commodious premises on Eastgate Street in Chester. She became Susannah Brown, and Browns of Chester still trades today at the retail heart of Chester, as part of Debenhams. As with other retail premises, it has been undermined by dodgy sale and leaseback property deals led by private equity firms, which has not helped the situation. Browns is one of Debenhams’s stores that trades well, at a profit. Will the Minister speak to administrators and support them, so that where there is potential for shops to continue as a going concern, that is explored and supported?

[Paul Scully]

I agree that it is so important that we continue a viable business where it is possible, and I know that the administrators will have that at heart.

[Simon Fell (Barrow and Furness) (Con)]

The news about Debenhams and Arcadia will cause many concerns as we head into Christmas. Can my hon. Friend reiterate the support that the Government will make available to the employees who face an uncertain future? Further to that, this year alone in Barrow, we have lost M&S and Topshop, so Debenhams will be another heavy blow. What support will the Government provide to offer hope to the high street in future?

[Paul Scully]

In terms of employees, as well as universal credit and access to other support through Jobcentre Plus, we will connect people to jobs in the labour market, help with their employment skills, such as CV writing, interview skills and so on, and identify transferable skills. It is, though, so important that we do more than that for our high streets to create the opportunities for those people to take up, through the future high streets fund and the work that we are doing with the Retail Sector Council and others at every level of government.

[Chris Elmore (Ogmore) (Lab)]

The Minister will be aware that a third of all retail jobs are held by people under the age of 25, and that a huge number of retail workers are women, because it allows flexible working and part-time hours. He will also be aware that many jobs in retail are highly skilled. It is a complete misconception that working in retail is not skilled and that, in years gone by, it was not a job or a profession for life. What specific support will the Minister put in place to offer to young people and to women, who will be more disproportionately affected by this and who have also been more disproportionately affected by the covid pandemic, to ensure that we do not have a lost generation of young people when it comes to finding their first job?

[Paul Scully]

Essentially, it is about creating those jobs and opportunities on the high street to ensure that we can keep retail and expand the offering on our high streets. Clearly, though, we need to ensure that we have that skills transfer work at jobcentre level and elsewhere to encourage our young people to take up those opportunities.

[Mr Speaker]

Order. Before we go to Bob Blackman, let me try to help, because I know how important it is to everybody to get on with the Order Paper, by saying that we need to speed up the answers and speed up the questions. I do not want to miss out people, but we may have to if we do not speed up. I am sure that Bob Blackman will provide us with a good example of speed.

--- Later in debate ---

[Mr Speaker]

Minister, can you pick out the best of that?

[Paul Scully]

I think my hon. Friend was talking about anchor stores and the effect on the high street. I know him very well, so I can predict his question. Yes, if we take out an anchor store, we hollow out a high street, so it is so important that we look at this holistically, work together with local government, national Government and with retailers themselves to build up our high streets and shape them anew.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Ellesmere Port, like many places, has seen an exodus from the high street over the past decade, which has been accelerated in the past year. Of course, it is no coincidence that, at the same time, online retail is booming, but my constituents do not judge the vibrancy of an area by the number of delivery drivers up their street; they judge it by the number of boarded-up shops in their town centres. Therefore, we need a consistent funded plan for the high street, but, just as importantly, we need a level playing field so that high street shops have a chance of competing. Can the Minister assure us that we will get that?

[Paul Scully]

Indeed, high streets will certainly change, but we need to get the balance right between online and bricks and mortar as well, because both have a really important position to play in our retail offering.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

In just three towns in my constituency, 27 shops have either closed or are about to close because of the pandemic. Will my hon. Friend commit today to use the Government’s very generous package of measures to retail businesses at all levels of Government—from central Government to local government to local enterprise partnerships—to follow the Prime Minister’s lead to encourage a massive return to the high streets now that we are allowed to do so under the guidance?

[Paul Scully]

It is really important that, as we extend hours for retailers to be able to open up for Christmas, we rip up and peel back on our bureaucracy as well. We must also encourage local authorities to do more such as offering free parking and other such things.

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

The high street is facing utter devastation in the next few months, unless drastic action is taken.  Will the Minister undertake, in conjunction with the Treasury, to discuss a proposal that I put to the Chancellor three months ago? The banks and building societies are currently sitting on almost £200 billion in current accounts and deposit accounts, paying 0% interest. A 1% voucher would release £2 billion to be spent on the high street only, at no cost to the taxpayer, and would bring a benefit equivalent to that which was seen in Jersey in the summer and which hopefully will be seen in Northern Ireland next month, as a similar voucher scheme is going to be discussed and released there.

[Paul Scully]

It is certainly something that I will ask the Treasury to look at and discuss with me.

[Elliot Colburn (Carshalton and Wallington) (Con)]

As my constituency neighbour, my hon. Friend will be aware that many Carshalton and Wallington residents work in Debenhams and Arcadia stores, particularly the flagship store at the St Nicholas Centre in Sutton. Will he join me in meeting the affected workers should the worst happen at that flagship store in Sutton, and reassure them that the Government are doing all they can to support them?

[Paul Scully]

Indeed. As well as being a Minister, I am clearly a constituency MP, and Debenhams is also at the heart of my high street. I will certainly continue to meet constituents affected by this and other issues around the high street.

[Julie Marson (Hertford and Stortford) (Con)]

The Government’s support for business has been unprecedented and unparalleled, particularly in the retail sector. The Minister is right to call it an ecosystem, because it does have a far-reaching effect on the economy. Does he agree that we have seen incredible creativity and resilience in our local communities and on our high streets, including from residents and retailers in Hertford, who have formed the Hertford hub and the Bishop’s Stortford business improvement district; and that, while we should look at business rates and so on, it is working with and supporting those communities that will let the sector create, thrive and survive?

[Paul Scully]

It is so much about a “grassroots up” approach. It is great to hear about the Hertford hub and the Bishop’s Stortford BID. There are some brilliant examples of BIDs and initiatives; I would like to hear more.

[Marion Fellows (Motherwell and Wishaw) (SNP) [V]]

Retail trade union, the Union of Shop, Distributive and Allied Workers, has said that it is seeking urgent meetings with Arcadia’s administrators in a bid to preserve jobs. It is crucial that the voice of staff is heard over the future of business in all circumstances. What reassurance can the Minister give that this request will be met?

[Paul Scully]

Clearly, the administrators will do their work under their own purview, but I encourage them to ensure that they look at the whole issue to keep as many viable jobs going and as many viable parts of the business going as possible, so as not to hollow out our high streets.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) [V]]

This is an awful situation for every high street and retail park across the country, and even more so for the 25,000 people at Arcadia and Debenhams who are at risk of losing their jobs just before Christmas. In outlining what action the Government are taking to support the people affected, will the Minister specifically highlight any discussions that the Government are having with the Welsh Government, so that any support packages from both Governments can be co-ordinated?

[Paul Scully]

Given that these businesses are big brand names, this is clearly an issue for the whole UK. We will continue to work with and listen to the devolved Administrations, and to speak to them about what support we can look at across the UK as a whole.

[Darren Henry (Broxtowe) (Con)]

Hospitality businesses are a vital part of our high streets. Winter is the time that these businesses, like many others, make their plans for the next season. They are currently planning in the dark, having been singled out for restrictions and excluded from the Christmas bubble proposals. Therefore, many will have no option but to make some very difficult decisions this Christmas. Does my hon. Friend agree that we need to consider a longer-term recovery for this vital component of the high street, and that there is a case to make the 5% VAT rate more permanent—extending it to the end of the financial year—which might help to address the issues of rent, debt and an uncertain cash flow going into 2021?

[Paul Scully]

My hon. Friend is working hard for his hospitality sector offering in Broxtowe. I will be leaving this place to speak to hospitality sector representatives immediately after this urgent question, and they will have a number of those asks. I look at this sympathetically because, as I have said, the high street is an ecosystem; we must all work together to support the business community as a whole.

[Andrew Gwynne (Denton and Reddish) (Lab) [V]]

It is a very worrying time for those employed by Debenhams and Arcadia stores in Denton, Stockport and Manchester, and indeed right across the country. Greater Manchester’s independent prosperity review identified structural changes in the retail sector due to the rise of e-commerce, and sadly we are seeing a rapid acceleration in these changes due to the pandemic. What are the Government doing to put in place a strategic plan for the sector, including retraining and reskilling into digital roles in the sector and in adjacent industries?

[Paul Scully]

We are working with the retail sector itself, including online businesses like Amazon and Asos, and bricks and mortar businesses providing the retail brands that we all know and love, to make sure that we can get the whole gamut of retail together as one and look at the long-term prospects, including digitisation and increasing the skills of retailers and those wanting to go into the sector.

[Mike Wood (Dudley South) (Con)]

Workers at Debenhams, Dorothy Perkins, Evans, Miss Selfridge, Burton, Top Man and Top Shop in Dudley South face a really worrying time, but the challenges facing retail go much wider. Can my hon. Friend therefore confirm that the £1 billion future high streets fund will be accelerated, and will he join me on a visit to Brierley Hill so that he can see for himself how much our bid will transform the town centre and help to support retail jobs in my constituency?

[Paul Scully]

Owing to the restrictions it is nice to be offered a trip anywhere, so I will be more than happy to take that up. Yes indeed—the future high streets fund is a really important initiative along the way of tackling the issues in retail and our high streets as a whole. I wish my hon. Friend well in his bid. The results will be announced shortly.

[Kate Hollern (Blackburn) (Lab) [V]]

There is a Debenhams in my constituency and my thoughts are with the staff at this time, but sadly it is not the only business going to the wall. Yesterday I spoke to Barry, who runs the Bee Hive pub in Blackburn, and he described the Prime Minister’s announcement of £1,000 for pubs as a slap in the face. Barry has spent thousands on making sure that his pub was covid-secure, and with no evidence of spread of the virus in the pub sector, he will now have to throw away thousands more in stock. He is now wondering whether he can survive. So I ask the Minister: did he pluck the figure out of the air, and does his Department think that £1,000 will really be able to save our pubs and, in turn, our high streets?

[Paul Scully]

Wet-led pubs have a particular issue where they are not offering food, and £1,000 does not go far enough in itself, but it does go alongside the other payments such as the forbearance on rent, the moratorium that is still in place until the end of the year, business rates relief, and VAT relief on certain areas of food—although not necessarily in that pub. I will continue to work with the hospitality sector. It is important to say, as the hon. Lady said, that those in hospitality should not be scapegoated, because they have done so much work to make sure that they can offer a covid 19-secure and warm welcome to their customers.

[Angela Richardson (Guildford) (Con)]

Guildford High Street is not only picturesque but is home to one of the finest retail offerings in the south-east, including Debenhams and Arcadia brands. We acknowledge not only the difficult uncertainty for employees today but the significant square footage that these businesses occupy and the gaps that they will leave behind. Does my hon. Friend agree that the Government must actively work to help the high street to recover from coronavirus and also adapt to the long-term changes that will make our town centres sustainable for the future?

[Paul Scully]

I know Guildford very well. It is a destination for residents around Surrey and further afield. Yes, we must all work together to get the balance right so that we do not hollow out our town centres, including Guildford.

[Charlotte Nichols (Warrington North) (Lab)]

The Debenhams liquidation is a tragedy not only for the thousands of Debenhams employees but for all retailers in shopping centres like Warrington’s Golden Square, where Debenhams is the anchor department store driving footfall for the whole centre. With Arcadia brand stores in Golden Square also at risk, and confidence in the wider retail sector waning, what specific support will shopping centres like Golden Square get to protect all its retailers, their employees, and the vibrancy of our town centres?

[Paul Scully]

In terms of shopping centres it is really important that we get the balance right between landlords and tenants. The moratorium helps tenants but clearly does not help landlords, so we have to get the balance right. We will work with the retail sector to try to achieve that balance in the weeks and months to come.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

The Dorothy Perkins in Newcastle-under-Lyme was already closed earlier during the pandemic, and we have also lost major tenants such as Laura Ashley and Edinburgh Woollen Mill during this pandemic, so I welcome what we are doing with the future high streets fund. We have a bid in with the Ministry of Housing, Communities and Local Government. Can the Minister confirm that it will be accelerated? We need to hear about that bid as soon as we can so we can get our towns fund bid in as well.

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[Paul Scully]

I wish my hon. Friend every success in that bid—the announcement will be forthcoming. It is important that we have small business Saturday coming up this Saturday, and we must make sure independent stores thrive. However, the brands he talks about that are going do drag footfall towards those smaller businesses, which is why we need to look at the high street as a whole.

[Hywel Williams (Arfon) (PC) [V]]

Debenhams is a cornerstone employer in Bangor city centre. Its closure will be a severe blow to the staff who have worked there loyally for many years, and even more so now, I am afraid, because North Wales Mersey Dee Business Council reports that, across the region, 17% of businesses in retail and hospitality have already made redundancies. Thinking creatively, what consideration has the Minister given to material Government support specifically for repurposing large retail spaces into smaller, short-term, start-up units?

[Paul Scully]

We always work with local authorities to see what initiatives can come up. We work closely with them because it is typically the local authorities, local enterprise partnerships and other business groupings in each local area that know their local economy, and we are always happy to look at any initiatives.

[Peter Gibson (Darlington) (Con)]

As a student, I worked for the then Burton Group, and I know how vital retail jobs are, especially for students and young people. Can my hon. Friend confirm for my constituents in Darlington who worked at Topshop, Burton and Dorothy Perkins the steps he is taking to provide support, advice and assistance to them?

[Paul Scully]

I thank my hon. Friend, and I commend his work in retail before; many others around the House have done such work. Yes, as well as offering them support through universal credit and other benefits, we will work with them through the Jobcentre Plus and its frontline workers to help them with CV writing, creating opportunities for and sharing opportunities with them, and ensuring that transferable skills have a massive role to play in that.

[Alex Norris (Nottingham North) (Lab/Co-op)]

Up and down high streets in Nottingham, businesses big and small are really worried about their viability in the early parts of next year. They look at us talking about Debenhams and Arcadia today, and they think we will be back in January, February and March talking about them unless something changes. I ask the Minister the same question they are asking me: beyond reviews and promises of reform in the future, what support is coming now to keep our high streets viable?

[Paul Scully]

We are keeping our high streets viable by giving people business rates relief and giving businesses a moratorium to make sure they cannot be evicted and cannot be chased for rent debts, but, most importantly, by keeping retail open in all three tiers so that they can actually trade their way out of this. What they want is not handouts, ideally, although they do need the support; they want customers. They want customers for long- term support.

[Dr Kieran Mullan (Crewe and Nantwich) (Con)]

But our high streets need all the help that they can get, and the towns of Crewe and Nantwich are facing the highest parking charges in the region, while other towns in the area face none. Would the Minister agree that the local authority should at least ensure there is a level playing field, and perhaps reconsider its decision to reject some initiatives for December to introduce free parking to encourage people back on to the high street?

[Paul Scully]

I thank my hon. Friend, and he is absolutely right. When people are bringing back their heavy bags—after a long evening’s shopping, hopefully, in the lead-up to Christmas—just a simple token like free parking or cheaper parking can really help drive footfall and support our local high streets.

[Clive Efford (Eltham) (Lab) [V]]

Debenhams workers have expressed concern about the performance of the administrators. There has been a lack of communication and delays in registering redundancies with the redundancy payments service, which in turn has led to delayed payments to the workers themselves. What can the Minister do to ensure that the rights of workers are protected in these situations?

[Paul Scully]

Clearly, as I have said, there are measures in place that govern the administrators, but we will keep on top of this. My right hon. Friend the Secretary of State has already written to the administrators to expedite the report. We will also follow up to make sure we keep an eye on them to support workers not only through the administrators and redundancy phase, but back into good work.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

As my hon. Friend will know, I was a furniture retailer for many years prior to arriving in this place. This year has been hugely challenging for our high streets, and my thoughts are first and foremost with the employees of Arcadia and Debenhams. Does my hon. Friend agree with me that the Government must continue to actively work to help high streets both recover from coronavirus and, more importantly, adapt to the more long-term challenges that our town centres are facing at the moment?

[Paul Scully]

I know that my hon. Friend’s experience as a retailer, and his other work, will be massive in the months to come. Yes, we must ensure that we shape the change of high streets. We must allow businesses to pivot to allow for that change, so that our high streets can survive and thrive.

[Christine Jardine (Edinburgh West) (LD)]

Like many others, I am concerned about the many workers across Edinburgh and in my constituency who will today be worried about their jobs with Arcadia. My constituency also contains a number of independent shops that are struggling and need a level playing field with the online behemoths of this world, such as Amazon. I have a suggestion and plan to offer postage support for those independent businesses, in the same way as the Government helped the hospitality sector. Would the Minister be prepared to meet me to discuss that?

[Paul Scully]

I will happily meet the hon. Lady. She mentioned independent retailers, and it is important to realise that big anchor stores have a massive effect on smaller businesses if they hollow out the high streets. It is important to look at both sectors alike.

[Matt Vickers (Stockton South) (Con)]

I too earned my spurs in retail at Woolworths and Home Bargains. This year has been incredibly challenging for high street retailers, and my thoughts are with the employees of Arcadia and Debenhams. Does my hon. Friend agree that we must not only work actively to help high streets recover from the pandemic, but also consider all the other long-term issues they face, from car parking charges to businesses rates? I co-chair the all-party parliamentary group on the future of retail, and we would very much like to see the Minister at its next meeting to discuss those issues.

[Paul Scully]

I thank my hon. Friend—his experience will be valuable, and I would be happy to join him at the APPG. It is important not just to consider the immediacy of this, but the fact that with the new normal there is a new reality—a behaviour change that is baked into people’s approach to the high street. It is important to get right that long-term strategic view.

[Alison Thewliss (Glasgow Central) (SNP)]

I am deeply concerned by the situation facing Debenhams, which is a key part of Glasgow city centre, as well as the stores operated by Arcadia. My thoughts are with the staff, and I know that the Scottish Government stand ready with a pay scheme if it is required. Has the Minister established whether HMRC’s Crown preference rules, which came into force yesterday, had any bearing on the decision by Arcadia to go into administration on Monday? Has he calculated how much HMRC stands to lose as a result?

[Paul Scully]

I have not had any information or consideration of that issue as yet.

[Nigel Mills (Amber Valley) (Con) [V]]

Does the Minster agree that the best way to save these businesses is for people to keep shopping at them? Can he assure people that their rights are protected if they buy vouchers, shop online, or want to return items after Christmas?

[Paul Scully]

That is a really important issue, and my hon. Friend is absolutely right to say that these businesses want people to trade. At the moment, both Arcadia and Debenhams have said that they will accept vouchers, and I encourage anybody who is shopping at either store to use their credit card if they are spending more than £100, because then the Consumer Credit Act 1974 kicks in. At this moment, vouchers are accepted.

[Fleur Anderson (Putney) (Lab)]

Will the Minister accept that although Putney high street is very much loved and the centre of our local community, people are concerned about the fact that covid is accelerating the number of shops that are going? Will he consider a reform of the business rates, and of the meanwhile use rules, so that we can have more community activities in our shops on the high street?

[Paul Scully]

There is a really good community in Putney—I was there a few months ago at the business improvement district—and the more we can strip away through encouraging innovation through meanwhile use provisions, the better. I have spoken about the fundamental review of business rates, and it is important that we look at the whole thing.

[Robert Halfon (Harlow) (Con) [V]]

In Harlow, we have an excellent Topshop that has done very well, and clearly the staff are worried about their pensions and their jobs. Surely, the time has come for legislation to stop these robber barons who own these big companies, who plunder the assets, with the taxpayer left to foot the bill and anxious employees losing their jobs and pensions. We should make sure that we seize the assets of those big vulture capitalists and get the money that the hard-working employees deserve.

[Paul Scully]

My right hon. Friend raises some important points. There is already legislation and regulation in place to look at this. That is why my right hon. Friend the Secretary of State has written to the administrators to make sure that they can expedite the report looking at directors’ behaviour, not just in the immediate weeks but looking back to see if anything untoward has happened.

[Ian Byrne (Liverpool, West Derby) (Lab) [V]]

The job losses resulting from what is happening at Arcadia and Debenhams are on top of a series of devastating job losses across the north-west. Vacancies are scarce and people have few places left to turn. In Liverpool, West Derby, we have had increases of over 100% in both youth unemployment and universal credit claimants since March. Will the Government now commit to cancelling their heartless plan to cut universal credit, which will take £20 a week from struggling families in my constituency?

[Paul Scully]

To flip the question slightly, I know that a number of people up and down the country have been appreciative of the Government’s increase in universal credit to make sure that we can help them through this particularly acute time. Clearly, as I say, we will continue to work not only to support people who are out of a job but to make sure that we can create jobs and opportunities for them to get back into good work.

[Theresa Villiers (Chipping Barnet) (Con)]

Retail is at the heart of our local high streets, and the Government’s huge programme of support has been vital in keeping it going. Will my hon. Friend join me in encouraging my constituents to back Barnet and to come out and shop local on small business Saturday?

[Paul Scully]

My right hon. Friend absolutely nails it, as usual, in supporting her independent retailers—her small businesses. They are the backbone; 99.7% of businesses in this country are small and medium-sized enterprises. She is absolutely right, and I encourage everybody, both in Barnet and across the country, to shop local and get out there and spend money where possible to make sure that there is a high street to enjoy for years to come.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

Arcadia entering administration and Debenhams going into liquidation is devastating news, with thousands facing the risk of losing their jobs, but this is also an issue of greed, with Philip Green having paid his family a tax-free dividend almost three and a half times more than Arcadia’s current pension pot deficit. Does the Minister agree that while Philip Green retains his fortune, employees should not end up paying the price with their pensions?

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[Paul Scully]

The hon. Gentleman raises an important point. Clearly, as I say, the Pensions Regulator has significant powers here, and we will make sure that it has the space and ability to do its job.

[Mark Jenkinson (Workington) (Con)]

My heart goes out to all those affected by the collapse of Arcadia and Debenhams, both of which affect my Workington constituency—particularly Workington town centre, which has a Debenhams anchor. Alongside the stronger towns fund, the Government’s future high streets fund will be crucial to helping town centres not only recover but adapt in the future. In the light of unprecedented challenges this year, can my hon. Friend confirm that future high streets fund decisions are imminent and that the Government will get the cash out of the door quickly so that it can have a positive impact as soon as possible?

[Paul Scully]

I thank my hon. Friend for his work to support Workington. The stronger towns fund and the future high streets fund are two really important instruments in making sure that we have high streets up and down the country that can survive and thrive and that we can be proud of, and we will make sure that those announcements are forthcoming as soon as possible.

[Stephen Flynn (Aberdeen South) (SNP)]

As Arcadia collapses and jobs are put on the line in Aberdeen and across the country, Amazon pays less than £300 million of tax on almost £14 billion of revenue. Does the Minister therefore agree that, in order to protect our city centres, we need a level playing field and the Government must toughen up their digital services tax?

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[Paul Scully]

This is an important situation. Our hearts must all go out, as they have done today, to the employees of both Arcadia and Debenhams. In terms of an online sales tax, that is something we will look at in the fundamental business rates review. It is important that our high streets survive. There is an understanding that online businesses have an important role to play, but they must pay their fair share of taxes.

[Mark Pawsey (Rugby) (Con)]

The challenges that Arcadia and Debenhams face existed before covid, but they have been accelerated by it as people move online. The Minister outlined the very substantial support the Government are providing to retailers, but, to follow the question from the hon. Member for Aberdeen South (Stephen Flynn), should the Government go further and consider levelling the playing field between bricks and mortar and online retailers through an online sales tax?

[Paul Scully]

An online sales tax is one consideration that the Treasury will look at, but it is more than that. We need to ensure, in the fundamental business rates review, that there is a connection between businesses, bricks and mortar retailers, and their place, rather than just the customers themselves. There is an important body of work to be done and I know the Treasury will have heard the comments and views today.

[Mr Speaker]

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.