British Retail

Toby Perkins Excerpts

Wednesday 6th March 2013 Westminster Hall

[Richard Harrington]

My hon. Friend makes a good point, and I would expect nothing less. Independents are very much part of the story, and they are necessary, but large companies developing real estate and operating shops create massive employment, massive taxation and a massive contribution to urban regeneration, although that takes nothing from the validity of my hon. Friend’s point.

Things have changed. Everyone knows that in the past, apart from the high street, most towns had parades of shops. The developers of the masses of residential areas across London and the home counties from the time trains opened up those places would, for every few hundred houses, build a parade of shops that included a fruiterer, a greengrocer, a fishmonger, a general grocer and so on. Various things in the cycle, certainly in my lifetime, have kept those parades going.

I remember when the supermarkets started to take hold and some of those shops became empty and were replaced by banks, which were opening chains of local branches. It is hard to imagine now, but there was a big fight for which bank could get there first. Then there were estate agents. Again, if there was a spare unit, people would open an estate agency. There always seemed to be something, but that is not the case now.

With the internet there is less demand for individual units. There is plenty of supply, because, in many cases, the units were built before the second world war, if not before the first world war.

[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Gentleman on securing the debate.

One of the changes is that massive supermarkets are also becoming dominant players in the convenience sector and are appearing in every community, rather than simply in out of town or city centre locations. Has the hon. Gentleman reflected on the health, or otherwise, of that for British retail and market diversity in those communities?

[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.

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[Mr Marcus Jones (Nuneaton) (Con)]

Thank you, Sir Alan, for calling me to speak in this extremely important and pertinent debate. I congratulate my hon. Friend the Member for Watford (Richard Harrington) on securing it. It is a pleasure to follow the hon. Member for Stockport (Ann Coffey), who has immense knowledge of the subject, and has made a good pitch for what she thinks should be the future of our town centres.

There is no doubt that our retail sector is undergoing a fundamental and lasting structural change, and that the full force of the internet is being felt. In the past few months, HMV, Jessops and Blockbuster, to name a few companies that once had a successful business model, have succumbed quickly as their business model, overtaken by the pace of change in technology, has become obsolete. Traditional retailing is being eroded and is likely to give way to e-retailing.

Destination retailing is joining e-retailing as the focus for many of our multiple chains. It is said in retail that the customer is king, and it is impossible to stem the tide of what is happening. I am chairman of the all-party town centres group, and I think it is important to manage that fundamental change in our town centres and high streets. That is what I want to speak about today. We must look carefully in many areas at how we manage the change because many things need to be done. I want to focus on three issues.

The first issue is business taxation. Rents are falling in many small and medium town centres, but business rates, which are one of the greatest costs for retail businesses, are not following that pattern. I understand why the Government may not want a business rate revaluation at the moment, but the Minister and my right hon. and hon. Friends in the Treasury should consider freezing business rates in the forthcoming Budget, to give a fighting chance to small businesses in our town centres that might not benefit from small business rate relief.

[Toby Perkins]

I commend the hon. Gentleman for his comments about business rates. There is no question but that the issue is significant. He seems to be calling for the Government to forgo expected income to invest in the future, which is the Labour party’s economic strategy, so is the hon. Gentleman coming on board?

[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.

--- Later in debate ---

[Toby Perkins (Chesterfield) (Lab)]

As colleagues have said, it is a tremendous pleasure to serve under your chairmanship, Sir Alan. This is one of those rare occasions when Chesterfield is under Mansfield. That has not happened in the football leagues for many years. None the less, it is a tremendous pleasure.

I congratulate the hon. Member for Watford (Richard Harrington) not only on securing the debate, but on the contribution that he made to it. It was very important that we got this debate, as the contributions that we have heard and the interest that we have seen from so many colleagues have shown.

I would like to reflect particularly on the point that the hon. Member for Watford made about the importance of the retail sector as an employer of apprentices. He reflected on his own background as a graduate trainee at John Lewis and how that may have given him skills that he subsequently took forward in order to set up his own business. That is one of the things that can happen and it is vital for the UK economy. He also argued that consumer choice is wide, albeit different from how it looked previously. That is a question to which I shall return.

My hon. Friend the Member for Stockport (Ann Coffey) reflected on the significance of retail’s contribution to UK GDP and employment, and on the measures taken in Stockport to make alternative use of retail units. That was a very important point.

The hon. Member for Nuneaton (Mr Jones) tantalised us by suggesting that he might be able to come up with a freeze on business rates, which he and many other hon. Members were calling for in different ways, on a cost-neutral basis. I am sure that if there is a way in which that can be done, he will have huge support on both sides of the House. He also reflected on the potential for Government to incentivise councils, which we all know are incredibly hard-pressed at the moment, to reduce the level of parking costs. We all recognise that parking is a barrier in town centres. Again, it sounded slightly like a spending commitment, but perhaps it was not. If something could be done in that respect, that would be very important.

The hon. Member for Croydon Central (Gavin Barwell) reflected on great news for Croydon—the big development that is happening there—and on the success of business improvement districts. The hon. Member for Waveney (Peter Aldous) was critical of the disproportionate level of business rates and called for reform of the whole system.

The hon. Member for Cleethorpes (Martin Vickers) reflected on how, after 15 years on the straight and narrow in retail, he wasted the next 15 years of his life in the service of the Conservative party, but he did hold out a glimmer of hope that Conservative offices are now being closed down and turned into tattoo parlours. As a growth policy, that is not the worst I have heard.

[Martin Vickers]

I must intervene just to inform the hon. Gentleman that the Conservative office moved to make way for the tattoo parlour.

[Toby Perkins]

Like so much that we have heard from those on the Government Benches, it was not quite as good as it originally sounded. None the less, it is an idea to consider. More seriously, the hon. Member for Cleethorpes also revealed statistics that graphically exposed the challenges facing our retail sector.

The hon. Member for Gosport (Caroline Dinenage) reflected, at amazing speed, on her own background in retail and the importance of the retail sector in her constituency and more broadly.

We are all conscious of the pressure on the retail sector at this time. We have seen some very high-profile failures on the high street in the past few months. The lesson from those failures is that businesses that do not modernise—that do not harness the power of the internet and take the opportunities that are available out there—simply will not continue to succeed.

We all want to see a diverse offering on the high street. We need to consider how the power of Government can be used to support small businesses to strengthen their internet presence. With regard to the reduction in business support that is out there, anything that we can do to support small businesses to harness that power would be tremendously important. With that principle in mind, my hon. Friend the Member for Streatham (Mr Umunna) has launched Small Business Saturday, copying an idea that is already successful in America. Many Labour local authorities are involved, and I hope that local authorities of all political persuasions will sign up to have a Small Business Saturday identified every year on which local authorities and the local small business sector can work together to encourage people to shop locally. Local authorities are coming up with very innovative ideas to promote their local small businesses.

In Chesterfield, where I am the Member of Parliament, we have a tremendous retail offer. We have a huge market. We have a market festival, which has brought a lot of publicity. It supports not only our retail offer, but our tourism offer. However, an issue that we have had in Chesterfield and that I touched on earlier is the massive emergence of the big supermarkets and particularly Tesco in the convenience store sector. We already have a huge Tesco Extra store. We have a Tesco petrol station and convenience store on Newbold road. We have a supermarket in the town centre. We have a Tesco that has moved into the former Angel pub on Derby road. There is a Tesco moving into the White Horse at Old Whittington, and there are now plans for a Tesco at the site of the Crispin Inn on Ashgate road. That will be six in one town. People in Chesterfield have been calling it Tesco Town and are very concerned that the offer available is far too limited.

I recently met with Tesco. When I asked whether it felt that six stores was going to be enough, I was told, “No, not nearly. We think there’s going to be loads more growth in Chesterfield and we see a lot more opportunities right across the country for many more of these Tesco stores in the convenience sector.”

I am not anti-Tesco, but I do think that something radical is happening that has the power to change dramatically our communities and the diversity of food on offer. I do not think that we have really stopped to think about whether we want that to happen. It is important that we have a debate about what we want the convenience sector to look like. Are we happy for all food shopping to be in the hands of three or four major retailers, or do we want to say something about that? Are there things that we can do through the planning system to ensure that local authorities have the opportunity to say, “No, this is not what we want in our area”? This is not just about Tesco. Sainsbury’s, Morrisons and Asda are also moving into the convenience store sector. Those stores provide very good value and are popular among consumers, and we do not want to stop people having the right to shop where they want, but it is a debate that we need to have and an area that we need to think about.

This debate is incredibly important. The Portas review was a tremendously useful piece of work. What Mary Portas identified in her work was that planning and regulation, if they are done correctly, can boost and support the diversity of the retail offer, rather than necessarily always being a barrier. We need to get the right balance between planning controls that give local authorities and communities the opportunity to say what they want, and giving businesses the freedom to operate in the way they want. There is a fine balance. It is not always true that less regulation is good and more regulation is bad, but good regulation is important and ill-thought-out regulation is problematic. I congratulate the hon. Member for Watford on securing the debate and I congratulate everyone who has spoken on contributing so well to it. I look forward to hearing the Minister’s contribution.