British Retail

Robin Walker Excerpts

Wednesday 6th March 2013 Westminster Hall

[Richard Harrington]

Yes, I have reflected on that fundamental point. Many hon. Members want to contribute, so I cannot address all aspects of retail. Suffice it to say that although in the past shops appeared, on the surface, to give people much greater choice, if we add the internet and other channels, people have great choice now. I do not completely agree with the hon. Gentleman, but his point is valid.

Many people of my father’s generation came out of the Army with a small amount of money and could never dream of opening a big factory or going into a big form of business, but they were able to use their money to open a market stall, as my father did in Yorkshire. Unfortunately, the Marks and Spencer dream of going from a penny bazaar to a major multinational did not happen in my family, but we ended up with two market stalls. My father’s business doubled in size over 30 years from one market stall to two.

The serious point is that in those days the barriers to entry were low and could be met by people with small savings and an idea. For almost any item of clothing, household goods, luggage or anything that people could think of, there was a place for a niche shop. It is easy to say, “All that has changed. It is now in the hands of Tesco and the other big companies.” I do not quite buy that, although, yes, in the start-up system it is generally true that not many people, for a number of reasons, are opening shops; they are not saying, “I want to sell shoes, so I am going to take a store in Watford high street.”

Even if someone is acceptable as a tenant, they probably cannot afford to pay the rent or the rates. Compared with my father’s generation, there probably is not the same demand for the high street, but that does not include internet start-ups. There are many such examples in my constituency, including the sister of Jenny Reed, who works in my office. Hayley Reed had no business experience, but she set up a shop in her spare room. If I might ruthlessly plug the shop, it is called ProperPresent.com, and is similar to what previous generations would have created in bricks and mortar. The retail sector, albeit differently, still allows for start-ups and for choices that fit people’s modern lifestyle.

[Mr Robin Walker (Worcester) (Con)]

I congratulate my hon. Friend on securing this hugely important debate, and I support his point. The coming changes in technology represent enormous challenges and opportunities for retail. Does he agree, therefore, that it is important that the Government take a long, hard look at the changes taking place in the sector and the policies that we need to implement to maximise employment opportunities? Does he welcome the news that the Select Committee on Business, Innovation and Skills has recently agreed to launch an inquiry into the changes that are taking place in the retail sector?

[Richard Harrington]

I more than welcome the inquiry. It shows that retailing is being treated seriously as an industry in its own right, rather than as just a mechanical part of the distribution chain. It contributes as much as manufacturing and other sectors. I warmly endorse what my hon. Friend says.

The ultimate answer to the question of choice in retail is whether the public are given a better service today. I argue that they certainly are. When I worked at Trewins, which was John Lewis in 1980, we shut on Saturday at lunch time, on Sunday and on Monday. Now the equivalent—the Intu shopping centre, formerly known as the Harlequin, in Watford—is, for better or for worse, open every day. People have the choice to shop all the hours they want. Similarly, from the small independent point of view, although I agree that the butcher, the baker and the candlestick maker are not there, the internet gives the public a huge amount of choice and very good service. Although the developments in the retail trade are muted in people’s minds by the shops, chains and household names that have closed down, the public are given a much better service.

We need only look at the effect on the economy. Again, to be parochial, the main shopping centre in Watford replaced a sprawling mix of businesses, including the smallest abattoir left in England, an old Sainsbury’s branch and lots of different warehouses. For the past 20 years, the main shopping centre has had 147 stores, but the important thing is that it directly employs more than 4,000 people, plus the distribution chain and all the businesses in it. The shopping centre contributes about £14.5 million in business rates, which is a tremendous amount. It has about 750,000 square feet of infrastructure, and has upgraded that whole part of town.

I am not saying that there have not been consequences. It would be wrong of me to say that things are all one-way and all about prosperity; I am aware of the effect that shopping centres have on other things, but they are economic powerhouses in their own right. By any standards, the shopping centre is a big business, employs a lot of people and contributes a lot to the economy.

Similarly, nationally, companies such as Westfield have come from abroad to invest significant amounts of money in what it sounds trendier to call “urban regeneration” than “retail”. The east end, White City and other places throughout the country are major, long-term investment projects. Westfield has invested about £3.5 billion since it came to the UK in 2000, and created 25,000 jobs. If it were another kind of business and that sort of growth were announced over 10 years, there would be headlines all over the place.

Although I accept that retail is not the total answer to our economic problems, we must accept what it does for employment, infrastructure and areas where the rest of the private sector and the public sector have failed completely. It is a significant and serious business, and its problems must be considered by Government. I am delighted to see the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) in the Chamber; I know that he is experienced in this subject. Government must turn their mind to retail, because it is such a significant employer and a significant contributor to the national economy.

--- Later in debate ---

[Mr Jones]

I thank the hon. Gentleman for his comments. If my right hon. Friend the Chancellor sought to freeze business rates, I would expect him to do so in a way that balances the books. It is certainly not the Conservative-led Government’s policy to do things that impact further on the deficit. The hon. Gentleman and the Labour party are advocating an increase in the deficit instead of reducing it as the Government are doing.

[Mr Robin Walker]

My hon. Friend is making an excellent point. Before he moves on from business rates, does he agree that we inherited with the terrible deficit from the last Government a huge backlog of appeals against business rate decisions in the Valuation Office Agency? That continues to be a problem. Will he join me in urging the Treasury to do everything it can to clear that backlog, and to recognise that that shows that there is a real issue with the valuation and revaluation process?