The Future of the High Street

Theresa Villiers Excerpts

Thursday 10th December 2020 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

I do not think there can be any doubt that high street businesses and workers have suffered immensely throughout this pandemic. Despite support, many businesses have sadly gone under. We have already heard about the calamity that has befallen the Arcadia Group and Debenhams, and I might as well mention the Edinburgh Woollen Mill, where 21,000 jobs are at risk. Those collapses have knock-on effects—the supply companies will lose an estimated £250 million in business from the collapse of Arcadia alone—so the vitality of our high streets is crucial to all of us.

It is a truism to say that many aspects of our lives have gone online during the pandemic—working from home and shopping from home, most obviously. That has given those who have been fortunate enough to do that a better work-life balance, and perhaps it has simply accelerated trends that were already in evidence in how we use our high streets and town and city centres. The pace has been quickened.

The change presents a number of challenges for our infrastructure—most notably, how the transport network is configured—and for the footfall in our town and urban centres. We can expect a great deal of upheaval as the way we use those centres to work, rest and play changes in the time ahead of us. It is therefore imperative that we allow the inevitable transitions that are about to take place to happen in a way that does not leave the centres of our towns, cities and smaller communities entirely at the mercy of market forces, with property assets stranded in the hands of those who are unable to develop them or adapt what they own, or who find themselves hide-bound by planning and development objectives that prevent them from responding appropriately to the new reality.

Direct investment from the Government is one way that we can try to facilitate some of those changes. The Scottish Government have invested £4 million for towns, smaller settlements and business improvement districts, and a further £18 million from its economic stimulus package to add to existing funds in the town centre capital fund. Business improvement districts, which bring together local small businesses to work together in the common interest and improve the overall urban environment, have had a tremendous impact. To bring footfall back, we need to bring people back, create a vibrant streetscape and ensure our towns, villages and city centres are as accessible as they possibly can be for absolutely everyone. We must ensure that the services that we desire to access physically are within easy reach of all, whether they own a car or however they transport themselves about. Everything must be within easy reach and as accessible as it possibly can be.

If we want vibrant urban centres, we need a vibrant economy. The UK economy grew by just 0.4% in October. The SNP has today called for a £98 billion fiscal stimulus to match the scale of those that other equivalent European countries have already put in place. The best way to ensure that businesses recover is to allow them to do what they would ordinarily seek to do, so we need to do all we can to help them survive, thrive, adapt and emerge on the other side.

I will talk about some of the measures that we need. We need to stop money leaving businesses. Business rates have been mentioned already. That is what has allowed many retail, leisure and hospitality businesses to cling on in this time. It is absolutely imperative, notwithstanding the review that the Minister spoke about, that that sort of relief for business costs is allowed to continue.

The Scottish Government are absolutely committed to carrying on with that, but because of the fiscal framework, an equivalent commitment needs to happen in England before that money feeds its way through the Barnett formula to Scotland to allow that to happen. The Cabinet Secretary for Finance in Scotland has written to the Chancellor about that to seek clarity about the approach to non-domestic rates in England and future reliefs. I do not believe that a response has arrived yet, but I hope that a favourable response is forthcoming very soon.

We also need to ensure that money goes to people to maintain demand. It was only after immense pressure and the need for a lockdown right across England that the furlough scheme was extended. Although we obviously all have great hopes for the vaccine, the Government must be absolutely clear that if, heaven forbid, further lockdowns are needed, that support will remain for individuals. The £20 uplift to universal credit must be made permanent. We should also look at increasing statutory sick pay to enable people to buy the things they need and keep that demand in the economy.

I have mentioned the vaccine, which will obviously be key to giving people the confidence to come back into our urban centres. I know that the Government have shown a marked aversion to level playing fields over the last few days, weeks and even hours, but we certainly need one in our retail environment. Online retail has certainly brought many benefits to people, particularly through the pandemic, through home shopping, and it has allowed lifestyle businesses to thrive in better times. However, if we get this wrong and do not rebalance taxation between physical and online retail, it will hollow out our town centres. My party has consistently campaigned to close tax loopholes and end corporate tax avoidance. If we can close those loopholes and get a better balance, we could pay for the consequences of the pandemic without burdening and punishing workers, while also maintaining the health of our high streets.

[Theresa Villiers (Chipping Barnet) (Con)]

Given the hon. Gentleman’s concerns about online retail giants not paying their fair share of tax, does he welcome the extensive action that this Conservative Government have taken, introducing a world-leading digital services tax and leading the international work in the OECD that we need to ensure a long-term resolution to make sure the internet giants pay their fair share of taxes?

[Richard Thomson]

I absolutely welcome anything that ensures a better balance of taxation, and that example shows the importance of co-operating internationally. Much time has been taken up in this House pursuing a theoretical sovereignty, but we may be about to find some of the limits of the practical sovereignty we can get. However, certainly I am all in favour of making people pay what they can in taxation and doing so on a collaborative international basis.

That brings me neatly on to my next point, which is about tax-free shopping. The Government have announced their intention to withdraw tax-free shopping. That will have a deleterious impact on our airports, particularly our regional airports, and also have a massive impact on tourism. Much of the tourism traffic that comes into all parts of the UK is led, at least in part, by the opportunities for tax-free shopping.

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[Theresa Villiers (Chipping Barnet) (Con)]

As everyone has acknowledged, high streets have had a tough time for several years because of the shift to online shopping, and that trend has been intensified by the covid outbreak. Throughout my time in Parliament, I have tried to campaign in support of local town centres such as High Barnet, New Barnet, East Barnet, Hampden Square, Whetstone, Friern Barnet and all the other small shopping parades in my constituency. I pressed for reductions in business rates, and was pleased to be able to help persuade the previous Chancellor, Philip Hammond, to do that in two successive Budgets. But I do think that the Government need to go further to reform the system in order to reduce business rates for small independent retailers, and to ensure that the big online retailers pay their fair share of tax.

I welcome the introduction of the digital services tax and the international work being led by the UK Government on this important issue, but if our high streets are to survive and thrive, we need urgently to get to the end of this covid crisis. The Government’s programme of covid support has been bigger than anything ever attempted in our nation’s history, including an 18-month business rates holiday, furlough for 9.6 million jobs and £11 billion in business grants. But the only way to safeguard the future of our high streets is to get hospitality businesses fully reopened, especially the wet pubs, which have suffered the greatest restrictions over the longest period. We now have rapid mass testing and the delivery of the vaccine, so I urge Ministers to get covid restrictions lifted the moment that it is safe to do so, including the controversial 10 pm curfew. Let people get back to the pub for a few drinks with their friends and family once again—and please, please, please do not put London into tier 3.

If our high streets and town centres go into terminal decline, it would be a huge loss to our society and our communities. If we value them, we need to use them. Therefore, I encourage everyone, in a covid-secure way, to head out to their local shops, restaurants and pubs, both in the run-up to Christmas and in the months to follow. Our local businesses and high streets need us. It is time to back Barnet and give them our support.