Retail Sector

Rachel Maclean Excerpts

Wednesday 6th June 2018 Commons Chamber

[Rebecca Long Bailey]

I completely agree, and interestingly historically RBS had a last-man-standing agreement to be the last bank on many high streets, and that does not seem to have been enforced by the Government, so I call on the Secretary of State to look at this. My hon. Friend makes a pertinent point, and it is not just bank closures that are damaging the high street infrastructure; the closure of post offices is also a significant issue.

These issues are exacerbated even further by years of under-investment in many of our regions and nations. If the Government are not prepared to provide the tools businesses and communities need to provide a fertile environment for local businesses, how can we expect these fortunes to change? A worrying report by David Jinks called “The Death of the High Street” argues that, unless we see radical change within 13 years, the impact of online shopping and home deliveries will “destroy” over half of today’s town centre stores. His report also argues that between 2020 and 2030 half of the UK’s existing shop premises will disappear; 100,000 stores will close, leaving just 120,000 shops on our high streets.

Britain’s high streets are fading away because new shops are not opening fast enough to replace those that close. The Government attempted to deal with this issue through the Portas review, which advised that town teams be created to assist towns undergoing significant strain, but official funding for town teams ended on 1 April 2015.

The Government’s recent announcement to develop local industrial strategies was a welcome step forward. However, think-tank Localis stated last month that there was a capacity gap in Whitehall for developing these, leading to concern that a pipeline of local industrial strategies will face significant delays. I will be grateful if the Secretary of State provides clarity on this and confirms what resources are available to local enterprise partnerships and local authorities in taking these strategies forward.

EU funding has also been a significant supporting factor to many areas in decline; it has always been strongly targeted at less prosperous regions. The Government are currently failing to provide any certainty to business over the UK’s future trading relationship with the EU, the extent of regulatory alignment, or access to labour, but they have also failed to provide clarity on one key tool that previously helped spur the regeneration of many towns and high streets that had been starved of investment: EU structural funds. We know that the Government are planning a new fund to replace them when we leave the EU, but so far there has been no commitment on the scale of that fund, on how it will be administered or which investment it will be directed at. Will the Secretary of State give us more information on that today?

When we add to this massive uncertainty the significant cuts that local authorities have faced in recent years, we have a recipe for complete high street annihilation. That environment, and the lack of support that many businesses face, was made very clear in the shambolic handling of last year’s business rates revaluation, in which many businesses faced an unmanageable overnight hike in their rates. I am pleased that the Government have brought forward CPI indexation, but I urge them to go further by immediately introducing statutory annual revaluations, guaranteeing a fair and transparent appeals process and excluding new investment in plant and machinery from future business rates valuations. They must urgently evaluate and reform the whole system to make it fit for purpose and capable of addressing the changes that we are seeing in the sector.

Businesses were failed not only in regard to business rates; we also saw a failure to handle the scourge of late payments, which can lead to businesses struggling to cover costs or to invest, and sometimes going bust. We saw the effects of this recently in the collapse of Carillion, when huge swathes of supply chain companies faced a cliff edge due to late payments, often of up to 120 days. Many of those businesses will never see their money again. I urge the Government to adopt Labour’s position by ensuring that anyone bidding for a Government contract is mandated to pay their own suppliers within 30 days and by developing a robust system of binding arbitration and fines for persistent late payers.

As the retail sector struggles, how to boost productivity remains a major challenge. There are at least two schools of thought on this. The first concentrates on improving technology and ultimately automating many jobs. That involves automating warehousing, sales, deliveries and so on, and job losses could result. That was the view of Deloitte, which suggested that 60% of jobs could be lost. The jobs that would remain would require a range of skills such as operating advanced machinery, software and robotics. They are likely to be higher paid and involve higher skills.

The second model involves redesigning how business operates to boost productivity growth. Research from the Joseph Rowntree Foundation has shown that many capable employees in the retail sector are reluctant to move up the rungs of the management ladder, as that involves greater responsibilities without much of an increase in pay. Jobs need to be redesigned so that an individual performs a range of different tasks that straddle the staff-management boundary and pay is increased. In that way, talented individuals could be engaged in the management side, raising performance and productivity. Either of those models—or a hybrid of the two, whichever the Government chose to take forward—would require dedicated Government investment in skills training for employees, to enable them to navigate the changes.

[Rachel Maclean (Redditch) (Con)]

I agree with a lot of the challenges that the hon. Lady is outlining. My son works in the retail sector, and he has recently had a promotion to management level. He is only 18, so I give full credit to Zara for encouraging his talents. Does she agree, however, that the Government’s approach in bringing in T-levels has played an important part in tackling those challenges and that they are working with industrial partners to bring those changes forward?

[Rebecca Long Bailey]

I thank the hon. Lady for her intervention. Please will she congratulate her son on his recent promotion? Some of the Government’s commitments are welcome, including the national retraining scheme and the T-levels that she has just mentioned, but sadly they are meaningless in the context of the cuts that we have faced over recent years. For example, £64 million was announced for the national retraining scheme, but £1.15 billion was cut from the adult skills budget between 2010 and 2015. I hope that the Secretary of State will put forward proposals today to increase investment in skills, because if we do not invest in skills, we will not be able to take our employees on the journey that they need to make.

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[Greg Clark]

I was not aware of that, and my colleagues and I would be happy to meet the hon. Lady to discuss her example.

It is not the case that in recent years we have experienced a collapse in employment—rather the reverse. The trend has been towards increasing and, more recently, more stable employment. We are seeing more full-time work, rather than part-time work, in the mix. Nor is it the case that more retailers are failing. The hon. Member for Salford and Eccles correctly mentioned some recent examples of retailers that have gone out of business, but it has always been the case that some retailers have failed and been replaced by others.

[Rachel Maclean]

Of course I regret that Marks & Spencer is pulling out of Redditch, but is it not the case that the consumer is the ultimate beneficiary when we see change in the sector? Consumers get new products, better prices and different things and new experiences they would not necessarily have had previously. That is what an entrepreneurial economy supported by this Government does.

[Greg Clark]

I agree. We want to make sure that our retail sector is dynamic and provides value and choice for consumers, as well as good career opportunities for members of staff.

--- Later in debate ---

[Rachel Maclean (Redditch) (Con)]

It is a great privilege to follow all the other Members who have spoken.

May I take you, Madam Deputy Speaker, on a journey to Redditch? I do not know whether you have ever been there—

[Helen Goodman]

Of course she has. It is a marginal. [Laughter.]

[Rachel Maclean]

I am sure that you went there back in 2010, Madam Deputy Speaker. Those were happy days, with former colleagues. You will have seen the wonderful traffic-free roads that lead to Redditch. It is a new town, which was built in a moment of hope to accommodate people who were moving out of Birmingham and from elsewhere in the country. They wanted to come to Redditch to build a home. You will drive smoothly to the town centre, because there is no traffic holding you up: you can go straight past the islands. When you reach the town centre, you will park your car at the Kingfisher shopping centre. You will walk through that wonderful shopping centre, which is privately owned and very well run, and is doing a lot of work to attract new retailers. It is an example of excellence in our town centre.

Unfortunately, however, when you leave the Kingfisher shopping centre, Madam Deputy Speaker, you will go out into the old part of the town, where you will observe a scene almost identical to the one described by the hon. Member for Great Grimsby (Melanie Onn). You will see boarded-up shops and graffiti—not the trendy kind for which people pay good money, but the kind that we really do not want. You will see underpasses leading nowhere, the sort that you do not want to go through. That is a great shame, and it affects people’s impression of the town. They are passionate about Redditch, they love it with all their heart, but they want it to compete on a level playing field with other shopping centres that are only 10 or 15 minutes’ drive away, in Solihull and Birmingham.

At present our town centre is struggling, partly because, unfortunately, the leaders of Redditch Borough Council—sadly run by Labour, until the local elections last month—have not grasped the many opportunities that are at their fingertips to improve things for local residents. The Conservative-run county council went to Redditch and asked its council, “What is your vision for your town?” A number of successful, thriving towns in the rest of Worcestershire are using Government funds to make improvements. One example is Hereford, with its university of technology, its specialist area. Another is Kidderminster, with its incredibly successful ReWyre partnership which is driving investment in the town. Before that, it was haemorrhaging people because no carpets are made there any more.

Redditch used to be a centre of needle manufacturing, but what did the local Labour leadership come up with? I am sorry to say that the best it could come up with was the £800,000 that it spent on paving a yellow brick road on the high street. What good does that do in the face of all the challenges so eloquently outlined by Members in all parts of the House? What does it do to drive investment into our town centre? What does it say to the new business investors, the entrepreneurs who are putting their life savings at risk? There is, for example, Rees Café, which serves the most amazing vegan brownies. There is Heaphys Menswear, one of the oldest independent retailers in Redditch. There is Sew Fab, which purveys wonderful sewing kits—not that I have time to sew. What does that say to them? It does not give them a vision of hope for a town centre. It is just blocks on a road. It is absolutely useless.

That is the tragedy of the Labour council, but now we are turning over a new leaf. People really want to see Redditch thriving. Our whole message to the people of Redditch is that we need to—and can—unlock Redditch. It will take time—we appreciate that, but we need to work together. We need to create an environment where local leadership is welcoming people into the town and encouraging entrepreneurs to thrive. That is what we need in Redditch, and not this approach from Labour with a lack of imagination and no vision for our town.

This has been a great opportunity to have this debate and to make points to the Minister. On business rates, in common with others, I really welcome the work that he has done, which I believe will see £2.3 billion of business rates being saved by our local businesses, but please can we keep that work up? Businesses up and down the country are going to welcome that.