Retail Sector

Rachael Maskell Excerpts

Wednesday 6th June 2018 Commons Chamber

[Rebecca Long Bailey]

Yes, and I thank my hon. Friend for her intervention—I completely agree. Before I start the substantive part of my comments, it is important to note that the commercial retail sector has faced significant strain over recent years, affecting landlords and tenants alike. That is not least due to the business rates system. A lot of major property investors—for example, St Modwen—have divested themselves of their retail arms, because they are simply not profitable anymore, not only for tenants but for landlords, so it is critical that the business rates question is addressed urgently.

[Rachael Maskell (York Central) (Lab/Co-op)]

I really appreciate my hon. Friend giving way on such an important issue as business rates. Can she fathom why the Government, when they announced 15 months ago that they were going to review business rates, have not done anything to progress this issue?

[Rebecca Long Bailey]

I completely agree, and now I will begin the substantive part of my comments, if I may.

The retail sector is undergoing a period of transformative change that will impact millions of workers across the UK. As has been played out in the press over the last few months, the sector is experiencing huge challenges, with almost silence from the Government, sadly. We have seen an onslaught of store changes; big-name chains that have been the stalwart of our town centres and high streets for years have collapsed and gone into administration.

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[Rebecca Long Bailey]

I have not in any way, shape or form suggested that any business lacks the capacity or drive to innovate—quite the contrary—but they do lack Government support to drive that innovation. As for making tax digital, I ask the hon. Lady to read some of the Library research. While the sentiment is credible, the implementation has been far from it, with numerous businesses reporting problems from start to finish, and that needs to be addressed urgently.

[Rachael Maskell]

Does my hon. Friend recognise that the retail sector suffers from offshore landlords charging exorbitant prices for property, forcing businesses off our high streets?

[Rebecca Long Bailey]

I referred earlier to the commercial retail property market, and the Government must recognise that they have to work collaboratively across the sector and with landlords to enable tenants to secure fair tenancies. In the current climate, many tenancies are unfair to retailers, forcing many of them over the edge. Offshore landlords are a significant issue that we have discussed at length in this Parliament.

That completes my whistle-stop tour of many of the issues the sector faces, and I hope that my comments have been helpful to the Business Secretary. He knows that retail is our largest industrial sector. It has the power not only to transform our economy, but to transform our communities, providing high streets and towns with the services and consumer choice that Britain deserves.

When I was little, my Uncle Ray was a butcher. He was proud of having his own business and the family were proud of him. However, he was not just proud of being an entrepreneur; he was proud of the services that he provided to his local community and to the people who came into his shop every single day. In all my life, I have never seen such profound change in the retail sector, and the alarm bells are ringing loud and clear. How many more Uncle Raymonds are there who want to start their own business but are frightened to do so in the current climate? How many more Uncle Raymonds are out there who are in business but are frightened of going bust due to the hostile environment they face? Once our high street is gone, it will be gone forever, and the basic lifeblood of an entrepreneurial nation from high street grocers and hairdressers all the way through to department stores will be in tatters. I urge the Business Secretary to act now before it is too late.

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[Greg Clark]

My hon. Friend is right about that. The hon. Member for Salford and Eccles referred to local industrial strategies. The reason they are part of the industrial strategy is that the vision we have set out, informed by local councils, local leaders and retailers, is that that local dimension and knowledge, as I mentioned to the hon. Member for Great Grimsby (Melanie Onn), is vital in ensuring we have prosperity. So the sector was a major contributor to the development of our industrial strategy.

One commitment we made was to establish the Retail Sector Council, so that firms, large and small, can work effectively with each other and policy makers, emulating the successful model that the Automotive Council UK and the Aerospace Growth Partnership have established, with which Members are familiar. The RSC is chaired jointly by the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton (Andrew Griffiths), and Richard Pennycook, who, as many Members will know, is the former chief executive of the Co-op and one of our most respected retailers.

The RSC is bringing the sector together to work with Government and local councils, making recommendations on the areas of challenge that have come up already in today’s debate. Those include business rates, where the Government have made a clear commitment to make sure that the system is up to date for a world in which people increasingly shop online. Of course, that builds on the commitment we have made to wider business rates reforms and on the relief that has been given following the recent revaluation. That stands in stark contrast with the record of the Labour party, which doubled the average business rates bill during its time in office. We are protecting the small businesses in this country from its increase.

[Rachael Maskell]

Will the Secretary of State provide some more detail about how the Government are going to reform business rates, because we know the retail sector is crying out for reform of the system and he has not set out any details? I would really appreciate those now.

[Greg Clark]

I do not want to incur the wrath of my fierce hon. Friend, the Member for Stirling (Stephen Kerr), by speaking for too long, but there will be opportunities to do that. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton, will be responding to the debate. The Retail Sector Council has that as part of its remit and objectives. A review is taking place with the Treasury of precisely those matters. Of course that is so because this is one of the big challenges that stores with a high street presence face. The context of competition from online retailers is fundamental to that.

A major concern of the industry, through the new sector council, and of this Government, through the industrial strategy, is to drive higher levels of productivity and earnings for workers in the sector. There are huge opportunities to do both. The hon. Member for Salford and Eccles does a disservice to this very innovative sector and the people who work in it when she portrays it as some sort of backwater of uniform low productivity—it is far from that. In fact, in the past 20 years in the retail sector, output per hour has doubled; it has increased faster than the economy as a whole. Productivity in UK retailing is one of the highest of major European nations and one of the most rapidly growing. Pay in retail is increasing, responding to the recruitment pressures that come from the fact that unemployment is now at its lowest level for 40 years. That has been bolstered by the introduction of the national living wage, which has had a particularly beneficial impact on employees in the retail sector. As I have said, we want to secure improvements in the quality of working life that employees in the sector experience, which is why the Matthew Taylor report with its emphasis on good work is of such vital relevance to this sector.

Retail is already at the cutting edge of much of the innovation and new technology that we see. Our industrial strategy, with its major investment—the biggest increase in investment in research and development that we have seen as a country—is full of opportunities for further innovation. Through our industrial strategy challenge fund and grand challenges such as on artificial intelligence, this is a sector that will play a big part in that. Part of the reason for the creation of the Retail Sector Council is to enable the sector to do so.

The British retail sector is renowned as one of the most competitive and innovative in the world. It employs millions of people, and will continue to do so, in good jobs in every part of the United Kingdom. We recognise and embrace the challenge of responding to the changes that are taking place in retailing not just in this country, but across the world. We are investing in technology, investing in skills, ensuring that people can have satisfying and prosperous careers to look forward to in retail, and responding to the consequences of changing consumer preferences and the implications that that has for the future of the high street.

Those are the areas on which we will work in close partnership with the sector. Together we will ensure that, more than ever, retailing is something that is, in its quality, in the price that it offers to consumers and in the choice and innovation that it brings in, one of our world-leading sectors of the economy.