Arcadia and Debenhams: Business Support and Job Retention

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement on support for business and the retention of jobs on the high street in the light of the announcement of Arcadia entering administration and Debenhams going into liquidation.

Speaking as the retail Minister, let me say that I hope the right hon. Member for Doncaster North (Edward Miliband) realises that although the Secretary of State is not here, we take this incredibly seriously. That is why I want to focus on the detail, because it is a worrying time for the retail sector, particularly for those affected by the announcements this week.

On Monday, Arcadia Group Ltd, which employs approximately 13,000 people, appointed administrators, who are assessing all options available to the group. They will honour orders made over the black Friday weekend. No redundancies have yet been announced and existing sales channels will continue to operate while administrators evaluate options. The Secretary of State has written to the Insolvency Service asking that it expedite consideration of the administrators’ report. Yesterday, Debenhams, which employs approximately 12,000 people, announced the decision of administrators to wind down the company. No redundancies have been announced and existing sales channels will continue to operate while administrators evaluate options. We know that this will be a worrying time for employees and their families, and we stand ready to support them. I pay a particular tribute to the hard-working staff, who have kept these well—recognised businesses going in difficult times for so long.

Although the Government have no role in the strategic direction or management of private retail companies, we are in regular contact with both companies and with the administrators in order to understand fully the situation they are facing. The coronavirus crisis has made life difficult for retailers such as Arcadia and Debenhams, particularly those that were already facing challenging trading conditions before the pandemic. We acted quickly at the start of the pandemic to deliver one of the most generous and comprehensive economic packages in the world. It included the coronavirus job retention scheme, which up to 30 September had provided £7.7 billion-worth of support to companies in the retail and wholesale sector; removing all eligible properties in the retail, hospitality and leisure sectors from business rates for 12 months—that is worth more than £10 billion; cash grants of up to £25,000 for retail, hospitality and leisure businesses with a rateable value of between £15,000 and £51,000; more than £50 billion in business loans, which supported 9.6 million jobs and provided flexibility; and legislation to protect commercial tenants from eviction.

Let me join the Minister in expressing deep sympathy for those who are at risk of losing their jobs. The test of Government, and indeed the House, is whether that sympathy translates into action, so I have four specific questions for him.

First, Philip Green owes workers at Arcadia a moral duty. His family took from the company a dividend worth £1.2 billion, the largest in UK history, more than three times the size of the pension deficit. Workers at Arcadia should not pay the price of Philip Green’s greed, so will the Minister now publicly call for Philip Green to make good any shortfall in the pension scheme, and will he ensure that the Pensions Regulator takes all possible steps to make sure that that happens?

Secondly, we need to learn lessons. In the summer, Labour tabled amendments to the Corporate Governance and Insolvency Bill to make pension fund holders priority creditors when businesses went bust. The Minister said it was not necessary. Does he now agree that that was a mistake, that that change would have better protected the pensions at Arcadia, and that this should be put right through legislation in the future?

Thirdly, on the workers at Debenhams and Arcadia facing redundancy, given the scale of redundancies and the grim economic backdrop, will the Minister look at providing specific and targeted help for them to get back into work? Fourthly, we have an emergency on our high streets, with an estimated 20,000 shops closing and 200,000 workers losing their jobs since the economic crisis began. While we welcome the support that has been provided, will the Minister recognise that the Government must do more: extend the rent evictions moratorium beyond December, when it is due to expire; increase support for hospitality businesses, which was called for across the House yesterday; and address the massive disadvantage that high street businesses face around business rates compared with online retailers?

Today is a day of great news on the vaccine, but the Government have a massive responsibility to preserve the businesses and jobs we will need on the other side of this crisis. They are still not acting on a scale that meets the economic emergency our country faces. They need to do so.

I am grateful to the right hon. Gentleman for raising some really important points. On pension schemes and support for those facing redundancy, the majority of defined pension schemes are run effectively. We are fortunate to have a robust and flexible system of pension protection in the UK. The independent Pensions Regulator has a range of powers to protect pension schemes, and it works closely with those involved. For schemes where the employer becomes insolvent, the Pension Protection Fund is there to help protect the members. Anybody already in receipt of a pension will continue to be paid, and other members will receive at least Pension Protection Fund compensation levels. The Pension Protection Fund is confident that its funding plan investment approach positions it well to weather the current market volatility and future challenges.

It would not be appropriate at this stage for Ministers to comment on individual cases, which are a matter for the regulator. However, in respect of staff facing possible redundancy, the Department for Work and Pensions’ rapid response service has been in ongoing conversations with Debenhams and has now been in contact with Arcadia. Both have been offered support by the rapid response service, including connecting people to jobs in the labour market, helping with job search—including CV writing, interview skills, where to find jobs and how to apply for them—helping to identify transferable skills and skills gaps linked to the local labour market, and explaining what benefits they may get and how to claim. I talked about the fact that we have doubled the number of workplace support staff in Jobcentre Plus. Clearly, knowing where the big stores are, for Debenhams in particular, we will be able to offer that sort of targeted support.

The right hon. Gentleman talked about his proposed changes to the Corporate Insolvency and Governance Bill. This was a matter of balance, because elevating pension debts, which can often be quite large, will by its very nature dilute the amount available to trade and credit suppliers, but also to other suppliers, including people with unpaid wages. It is about trying to get that complexity and balance right.

I am sure the thoughts of the whole House will be with employees of Debenhams and Arcadia, who face huge uncertainty this week, particularly in the run-up to Christmas. These are long-standing bastions of the high street. However, both organisations have been struggling for quite some time; indeed, Debenhams has been in administration since January. While no redundancies have yet been announced, many of my constituents will be affected. Can my hon. Friend assure me that, should the worst happen, the Government are ready to support anyone affected, whether through jobcentres or universal credit?

My hon. Friend is absolutely right. I know her constituents will be concerned about this. We are prepared to step up concentration within Jobcentre Plus. We will make sure there is support for people in finding jobs and for retaining as many jobs as possible on our high streets.

I am sure the Minister agrees that there is a great deal of public affection for the Arcadia brands and in particular for Debenhams. While we must hope that redundancies can be avoided wherever possible, this is a sad day for our embattled high streets. All our thoughts are with the thousands of workers, including those in my constituency, many of whom have given years, or even decades, of service in retail, and who will be devastated by this news. They must be given all the help they can get to ensure that all their pension rights are retained. Will the Minister ensure that Sir Philip Green’s obligations to pensions are met, and will his Department work with trade unions to make sure that the workers are treated fairly and adequately supported through the process?

Like others, many of the workers will face difficulty in putting food on the table and finding a new job or retraining in a crowded market. They will need the safety net of universal credit to make ends meet. I urge the Minister to use his best efforts and to work with colleagues to retain the £20 a week uplift and to scrap the planned benefit cap that will cost an average of £250 a month. Universal credit is already not enough; taking away the uplift is taking food from people’s tables.

We need to remember that many small businesses in local supply chains will be affected by the news. Some of them will not survive without support, while the owners of others will be joining the 3 million people who have been excluded from support. The Government cannot continue to ignore them. I urge the Minister again to finally get support to this group, who are becoming increasingly desperate.

The existing commitments made to the Pensions Regulator do indeed need to be kept—it is important to say that.

The hon. Gentleman talks about support for employees. If people need financial support quickly, they may be able to claim universal credit and/or employment and support allowance. Our plan for jobs includes a series of measures to protect, support and create jobs, because it is important to get the people affected back into work as soon as possible. We have our £238 million job entry targeted support programme to support that.

The hon. Gentleman also talks about the possibility of suppliers losing out. Administrators will take over the company and seek to establish the position regarding suppliers. The trade credit reinsurance scheme is designed to support businesses coping with the economic impacts of covid-19 and to ensure that there is adequate confidence and credit in supply chains.

As my hon. Friend is aware, the Arcadia Group is headquartered in my constituency and its brands, including Debenhams and Topshop, have their flagship stores on Oxford Street. Covid has the potential to be the straw that breaks the camel’s back for bricks-and-mortar retailers. The New West End Company and I welcome the continuing support of my hon. Friend and his Department for the retail sector. I note the Government’s announcement this week on extending shopping trading hours for Monday to Saturday until January but, particularly in the short term, an extension of Sunday trading hours would be of huge benefit to retailers. Will my hon. Friend support me, The Sun on Sunday newspaper, retailers such as Marks & Spencer and others who are campaigning to extend Sunday trading?

I look forward to joining the New West End Company and, I assume, my hon. Friend on Saturday to celebrate not only small business Saturday but traffic-free shopping in the west end. The west end accounts for 3% of the entire UK economy and many, many jobs. We do not propose to extend Sunday trading at this stage, but we are extending shopping hours throughout the weekdays. We want to work with local authorities to make sure that they can support the safe return of shoppers to high streets up and down the country, including those in the west end.

The collapses of Arcadia and Debenhams are two big examples of the broader challenge of survival in the high street-based retail sector. Every job lost and every store closed is devastating for families and communities across the entire country. The Business, Energy and Industrial Strategy Committee has today written to the Secretary of State, and I know we will have full answers in due course, but may I ask the Minister one specific question about support for small businesses in the retail supply chain? I wish to push him a bit further on whether there will be specific support—perhaps a taskforce—for small retail businesses, to help with the hundreds of millions of pounds of orders that could go unpaid.

I cannot give specifics on a taskforce or any other group, but we will look acutely at what we can do for supply chains and the future of the high street. When flagship stores like the 200-odd-year-old Debenhams leave our high streets, it is so important to make sure that we have a co-ordinated response. I will happily work with the hon. Gentleman on that.

My hon. Friend, and the whole House, is concerned about the numbers of jobs potentially lost in the Arcadia Group, but we also have to be concerned about those employed by microbusinesses, perhaps without premises, who have so far not benefited from Government schemes to support them. Will he think again about those who so far have not had Government support and may well be adversely impacted by the news we have heard about Arcadia if they work in the retail supply chain?

My right hon. Friend raises a really important point. We have wrapped our arms around the economy, but clearly it is very difficult to do things at pace to cover everybody. We will always make sure that we reflect on what happens, to help as many people as we can and try to fill the cracks as best we can.

I, too, express my sympathies to all those employees of Debenhams and the Arcadia Group who find themselves out of work so close to Christmas and in such an uncertain time. Will the Minister’s Department work with local authorities and help them to offer more flexible rates terms to new businesses that want to come in and set up in the large voids that a lot of town centres will be experiencing in their retail spaces? Those voids affect town centres and communities. What can the Department do to work with local authorities to lower the barriers to new entrants into the retail sector?

There are plenty of things on which we can work together with the sector and, indeed, the whole gamut of British high street businesses, including talking about getting the rent balance right between landlords and tenants, as well as rates, as the hon. Lady says. The Economic Secretary to the Treasury is joining me on tomorrow’s Retail Sector Council call that I mentioned, to talk about the fundamental business rates review. I hope we will be able to work with local authorities to get that flexibility.

Does my hon. Friend agree that Dudley Council and other local leaders in my constituency will play an instrumental role in rebuilding and revitalising the high street? Will he confirm that the High Streets Task Force will stand ready to provide whatever advice may be needed in this endeavour?

I know that my hon. Friend works tirelessly for his constituency and local economy. It is so important that we get together to look at the high street, because many of these conversations were about what the high street will look like in 10 or 15 years’ time, but now they are about what the high street will look like next year and maybe only the year after. We have to get a speedy but holistic response.