Retail Sector

Wera Hobhouse Excerpts

Wednesday 6th June 2018 Commons Chamber

[Kevin Foster (Torbay) (Con)]

It is a delight to speak in this debate. Ironically, if I was not here, I would be back in Torbay, helping to present the “Love Your High Street” awards. One recipient was the Kind Grind in Lucius Street in Torquay and another was a bar called Peaky Blinders in Winner Street in Paignton; both areas are famous for independent shops. This is a welcome opportunity to debate retail, particularly given its importance for many communities up and down the country. Given some of the campaign leaflets that I see in my constituency, it is rather odd that no Liberal Democrat Members were present for the first two hours of the debate, but I shall move on.

Let me start with our town centres, and particularly the internet’s impact on them. No one is going to be able to roll back the digital tide. Most of us have in our pockets a phone with which we could order the entire contents of a department store, a do-it-yourself store and a supermarket literally while we are sat here, if we so wished. The internet has also brought services and products into areas that in the past would have found it difficult to access them. That does, though, present a challenge to our high streets. There is no longer a need to go to the town centre and in future people will mostly go there out of choice, particularly as technology becomes more and more simple. We can heckle and make party political points, but that will not affect the change. It is therefore even more important that we look into what we can do not only to make town centres attractive places for those who still depend on them for their goods, but places to which people would go out of choice to go into a local shop and have an experience.

One thing that came out of the Tesco burger scandal was that a lot of people reconnected with the desire to know where their food comes from and what it is. A lot of local butchers had a boost that they had not had for a long time as people realised that there was something about going to a shop and speaking to a local business that could tell them almost from which cow the joint or product they were buying came.

There is a real need to look into what we can do to shape town centres as places. Rates can be a double-edged sword. They clearly have impacts on businesses, and there is a debate for the long run about how sustainable the existing business-rates model is, given that it is based on an era in which that corner on the high street was the best place to be—hence the location of a lot of Victorian buildings that became banks—and a crinkly shed on the edge of town was not very profitable at all—

[Wera Hobhouse (Bath) (LD)]

Will the hon. Gentleman give way?

[Kevin Foster]

No, I will not, because the hon. Lady was not present for almost the first two hours of the debate.

The business rates system is now not all that appropriate, even though it was appropriate for the shopping patterns of the 1950s. Of course, if we look at it the other way around, by retaining business rates and taking the growth in them, councils can fund exactly the kind of regeneration that is needed in our town centres. So there is a double-edged sword for local authorities in respect of how business rates can be used in future. The existing structure is certainly not all there.

I could not agree more with my hon. Friend the Member for Mansfield (Ben Bradley) about the need to tackle long-term derelict properties in town centres. I think particularly of one in Paignton called Crossways, which is a pretty poor example of a 1960s shopping centre. It keeps going only because of the car park there, the mobile masts on top of it and a lease that was particularly badly negotiated by one retailer, which is still paying even though it shut its shop in the centre some years ago.

The problem with the existing compulsory purchase rules is that yes, in theory a council can get hold of a property like that to push forward regeneration, but the rules are cumbersome. I fully accept that there needs to be protection for people’s private property, particularly their homes, but if commercial properties—no one’s home—have been empty for many years, there comes a point at which it would make sense to make it much simpler for councils to compulsorily purchase properties in order to deal with eyesores. That simplification could be subject to protections based on how long a property has been empty, rather than on values and costs. Some owners almost rely on the fact that their property is such an eyesore that one day someone—I am thinking particularly the taxpayer—might pay a significant amount to have it dealt with.

It is right that local authorities play their part. Torbay Council is starting to look at the future of planning for our town centres, particularly in respect of Torquay, where there is a debate about its size and what we can do to revitalise it by bringing in residences and expanding student accommodation, particularly around the language colleges. That could bring a second wave of life to the town centre. We also need to deal with older, poor-quality office accommodation which, if replaced by new accommodation, could bring jobs and employment back into the town centre and provide the stimulus of people who work in the town centre then shopping, eating and drinking in the town centre after work or on their lunch break.

There is a positive story to be told about the future of our town centres, but they will be very different from what we have seen in the past. People will not use them out of necessity, so they will need to be encouraged to use them out of choice. There will still need to be essential services, such as local post offices and a network of local banks, but we need to be conscious that just standing in the way of technological progress is a strategy that will be as successful as it was for the Luddites who tried to argue against industrialisation 200 years ago. The Government can make a difference through their business rate policy, by giving local authorities more powers and by making it clear that there is still a retail success story in the future.

--- Later in debate ---

[Craig Mackinlay (South Thanet) (Con)]

The motion before us today is somewhat rambling, dare I say. It has three parts. It is about squeezing wage growth, the condition of the retail sector, and there is a bit of Brexit put in as well—but we will have 12 hours next week to discuss that. Generally, however, what the Opposition are putting forward is that the Government should do more. They should spend more, subvert reality and revert this country to a command and control economy.

Let us look at wage growth, because we have had so much misdirection and ignorance of the truth regarding that. I think that the Opposition hope that if they say it often enough, people might believe it, but I recommend that they look at the facts. Let us look at a hypothetical, lower-paid employee. In 2010, the national minimum wage for those over 21 was just £5.80. Today, in 2018, it is £7.83; that is a 35% rise. Let us look at the income tax personal allowance. When we came into Government in 2010—we were left to pick up a lot of mess by Labour—the tax-free allowance was just £6,475. Today, in 2018-19, it is £11,850; that is an 83% rise in the tax-free band. Let us put those together. A 35-hour-a-week lower-paid employee at minimum wage in 2010 would have had take-home pay, after tax, of just £9,740, but today, the minimum wage and that huge increase in the tax-free allowance means that their take-home pay is £13,768. That is over £4,000 in real cash in the pockets of the lower paid under this Government. That represents a 41.4% increase in take-home pay.

[Wera Hobhouse]

It is, however, about the balance between the two. In relatively successful towns or very successful cities such as Bath, which I represent, shops are still doing fine but life is more expensive, so the balance of what people take home as pay and what they have to spend to live in an expensive city is much higher, too. The balance of the two, even in good, successful town centres such as Bath—and it is not that successful—is not right.

[Craig Mackinlay]

I thank the hon. Lady. Today’s debate is about the retail sector and wages. I was going to say that 41.4% over eight years is 5% a year, which is greater than any measure of inflation, no matter which one people care to mention, so there has been a real cash increase to all those working. We have the lowest unemployment since the 1970s and more people in work today than we have ever had in the history of this nation. I am afraid that we must stop listening to the misinformation from the Opposition. Their statements are simply not true. Real wages are rising.

In the retail sector, as we have heard, we have had business rates relief and changes from RPI to CPI, which will mean a reduction of over £2 billion to those who have retail stores. During this Parliament over 600,000 businesses will pay no business rates whatsoever, and in the first half of 2017, more retail units were opened than closed. There are 300,000 more in employment in the retail sector than in 2016.

That does not mean that everything is rosy on the high street, but when we consider what the Government did in 2008, when they took this country into probably the worst recession that it has ever known, in the third quarter of 2008 alone, there was a 4.2% decrease compared with the year before. That happened in just one quarter under Labour; that is what they condemned this country to.

The real debate here is the changing face of retail, and the internet is the reason for that. With spending now at £1.2 billion per week, 17% of all spending is now on internet purchases, and that is a 12% year-on-year increase. That is not unique to Britain, but is happening across the entire world.

That is the reality of life, and we are all guilty of fuelling it. If I want a shirt like the one I am wearing but in blue with a 34 inch arm and a 15½ inch collar and I want it delivered tomorrow, ordering that will take me three minutes, and it will be delivered. We are all purchasing in that way now; unfortunately, we are all fuelling the changes to the high street.

We have had debates about banking in the House, and I have taken part. Our banking landscape is changing, sadly, because we are all being encouraged on to mobile apps and mobile banking. Also, when did anyone in this House last book their flights in a high street travel agent?

--- Later in debate ---

[Wera Hobhouse]

Will the hon. Gentleman give way?

[Craig Mackinlay]

No, as we are nearly at the end of the debate.

The high street simply needs to redefine itself. High streets need to create themselves as places to go for a pleasurable afternoon—to do some browsing and shopping, but to enjoy the experience as well. That means there is a duty on councils and the retailers themselves to make the high streets clean, attractive and somewhere good to go.

My answers to this conundrum are that we should revise taxation of retail more towards the internet and warehousing-style operations, focus on making high streets places to go for an experience, and in many cases, such as in Ramsgate, high streets are too spread out and too big, and they need to be smaller to become the vibrant heart of the town. We all need to shop locally, too; that will help.