That this House has considered employment and the high street.
It is always a pleasure to serve under your chairmanship, Mrs Cummins, and it is fantastic to see so many Members here. Members will be pleased to hear that I will not make too long an introductory speech, so that we can squeeze everybody’s constituencies in.
Last weekend, we celebrated the 10th anniversary of Small Business Saturday, and I know that many colleagues will have spent the day visiting small businesses. In my constituency of Hornsey and Wood Green, we have Muswell Hill, Crouch End, Myddleton Road, Stroud Green and a number of other wonderful high streets bustling with activity. However, traders tell me that times are tough: changing technology, changes in consumer behaviour, and soaring energy costs and business rates are just some of the issues facing retailers. As part of my planning for the debate, the excellent House of Commons Chamber Engagement Team asked high street customers and small business owners about their town centres. I thank the 344 contributors, whose voices I hope to amplify today.
High streets are not just a place to shop for things we need; they are at the heart of our communities, and the small businesses on them are the lifeblood. They provide space for people to socialise, work and share ideas, and to catch up with old friends and make new ones. The pandemic taught us many painful lessons about what we value, one of which is undoubtedly how bereft our communities become when our town centres are no longer available to us.
I thank the hon. Lady for securing this important debate and for allowing me to intervene. The sudden closure of the Menai bridge by the Welsh Labour Government has decimated high streets in Porthaethwy and Beaumaris, and businesses in surrounding areas on Ynys Môn, during one of their most lucrative retailing seasons. Does the hon. Lady agree that the Welsh Labour Government should have invested in that bridge so that this catastrophe did not happen, and that they need to do much more than just offer free parking to help employers protect vital jobs on the high street at this vital time?
I believe that the free parking that is on offer from the Welsh Government is not necessarily replicated in England, so there are swings and roundabouts with different regions. I am sure the Minister will know every detail about where free parking is available and where it is not, but that may well be something that my constituents now ask me for, because parking is quite a contentious issue in my local authority area.
Going back to the essay question—that of high streets—2.8 million people are employed in retail across the UK, and in London, our high streets are home to 41% of all businesses in the city. Small businesses employ 16 million people in the UK and account for two thirds of UK private sector employment, yet so many high streets are on their knees after 12 years of staggeringly low growth, and independent and small businesses have been hit very hard. The BBC reported this week that there were 9,300 fewer retail outlets in March 2022 than in March 2020, and a recent London Business 1000 survey showed that three quarters of London businesses are feeling less confident about the UK economy over the next 12 months. That is why today’s debate is so important. We need to act now if we want to secure the future of our town centres and the 5.6 million small businesses across the country that are vital to our economy.
Developments in digital technology and the growth in online retail have completely transformed how people shop. Between 2006 and 2019, as we are all aware, online retail increased from around 7% to 19% of the market, while physical shops lost 13% of their market. The pandemic rapidly accelerated that trend and, sadly, many high streets have never recovered. In the week to 2 July 2022, overall retail footfall in the UK was 19% lower than the equivalent week in 2019. We saw how agile and innovative the retail sector can be when many shops moved online; however, that has not been enough to keep stores open, and businesses are begging for more support.
Will the hon. Lady set out what Labour’s policy is? So far, I have heard only that it will scrap business rates; I have not heard what it will put in their place to raise the £22.5 billion a year that we raise in England.
I thank the Minister for his unusual intervention on the opening speaker. I am confident that Labour’s plan to even up the balance between basic high street stores and the huge digital giants will bring the solution that so many of us are desperate to see. Labour is committed to rectifying that imbalance. I know that the Minister is concerned to help business, yet many respondents to the House of Commons survey reported that the planned revaluation of business rates from next April will do the opposite. Labour is putting forward a plan for a root-and-branch replacement of the business rates system, and I hope that the Minister can be equally ambitious.
To help small businesses that are struggling now, Labour would look again at the value of properties, assessing the impact of the burdens on them and what we can do about that. As the Stroud Green traders group in my constituency pointed out, in London it is rare for a high street property to be eligible for business rates relief. We look forward to a reassessment of the threshold for relief. If it were, say, £25,000 rather than £12,000, that would help very small businesses in London and other cities that pay such a high level of income on their rateable value.
There is scope to reinvigorate our town centres, and I welcome the work of local authorities, including the work that my own Haringey Council does under the leadership of Councillor Ahmet and cabinet business lead Councillor Jogee. I also pay tribute to Diane Southam, our departing head of economic development, to Ian Cruise, the town centre manager, and to the business improvement district. We are lucky to have a BID, which I am sure many others in the House will know about, that combines the “cleaner, greener, safer” theme and makes the high street much more appealing and attractive to shop in.
I urge the Government to look at creative ways to help our town centres by introducing community, arts and cultural events to attract people to the area. Last week I had the pleasure of meeting the founder of the RecordShop, a community interest company based in Wood Green mall. It is run by a youngster, Mary, who set up the RecordShop to help young people in Haringey and surrounding boroughs to gain skills and experience. It hosts open-mic nights, events and markets. Her vision for the RecordShop shows us that there is room for a renewed relationship with our high streets, and I hope that the Minister will consider this proposal positively.
It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank the hon. Member for Hornsey and Wood Green (Catherine West) for securing this really important debate; talking about small businesses and the revitalisation of high streets is undoubtedly incredibly important.
As the hon. Member indicated, last Saturday we celebrated 10 years since Small Business Saturday was introduced—what a moment for us to be having this debate. No doubt we all spent the weekend out and about in our constituencies, supporting our many independent retail shops. I celebrated by going out and buying my Christmas tree from James and Anne, who run a fantastic business in Addingham. On Wednesday this week, they celebrate 63 years operating in Addingham, which is a huge achievement for a brilliant family-run business.
We are all familiar with such fantastic retail businesses. I suppose this is my opportunity to encourage all my constituents, while they have time, to get involved with my small business award. Nominations close on 9 December and it is a great way to recognise the valuable support that small businesses give to our communities and their customers.
There is absolutely no doubt that the pandemic has changed the nature of high streets, with many more people shopping online. That is a challenge that the market is driving, and it is difficult for the Government to react to it. I do not accept the blame game that says that is the Government’s fault. The way people buy items is very much market-driven, and most people now go online, which is incredibly challenging and frustrating for our many independent businesses.
Of course, there are mechanisms that the Government or local government can use to try to keep high streets as alive as possible. I welcome the range of support that the Government have put in place to help with utility costs, and the indication that they will look at things such as business rates. As the Minister will know, I have said in this place many times that there is a case for reviewing business rates. There is a case for them to be linked more to turnover or calculated on a percentage basis, rather than relating to the area of space that a business occupies. That might take away the challenge faced by a new business occupying a large space and being exposed to business rates. But of course we know that there are reliefs in place, which have been expanded, that are helping many of our small businesses.
It is a pleasure to serve under your chairship, Mrs Cummins. I congratulate my hon. Friend the Member for Hornsey and Wood Green (Catherine West) on securing the debate. I declare an interest as a member of USDAW. I worked in the retail sector for many years—almost six years, actually, for the John Lewis Partnership—and I have been a member of USDAW for a long time. I want to be up-front about that.
I am proud to represent Stockport, which has many district centres and a vibrant town centre where lots of independent shops operate. We have the iconic SK1 Records and Rare Mags in the town centre, the Funky Monkey café in Davenport, and Blue Door Flowers, where I was on Small Business Saturday. One of the issues we have—I hope the Minister will respond to this—is that the Government do not seem to have a strategy. They do not have an industrial strategy when it comes to the workforce and they do not have a strategy when it comes to saving our high street.
Several points have been mentioned, such as access to cash. People should not have to pay a fee to access their own hard-earned cash. Linked to that point is the post offices mentioned by my hon. Friend the Member for Hornsey and Wood Green and the hon. Member for Keighley (Robbie Moore). I have a Crown post office within walking distance of my constituency office in the town centre. Before the pandemic, sadly, there was a strategy to close it and replace it with a smaller, franchised counter. That Crown post office offers an excellent service to our town—it is staffed by civil servants rather than franchise employees—which will be lost to our town centre if we lose that service.
The trade union USDAW—the main trade union representing retail sector and distribution sector workers—has a “Save Our Shops” campaign, which it has been campaigning on for a long time. Some of the points from that campaign are: economic measures to create a more level playing field between the high street and online retailers; fair pay and job security for retail workers; a minimum wage of £12 an hour, moving up to £15 an hour; tackling zero-hours contracts and short-hours contracts; and investment in skills and training.
It is, as ever, a pleasure to serve under your chairmanship, Mrs Cummins. I thank my hon. Friend the Member for Hornsey and Wood Green (Catherine West) for securing the debate.
This issue is so vital to towns such as Bolton, which I have seen evolve since my election in 2010. In years gone past, the high street of Bolton bustled and businesses flourished. It was a real economic centre in the north-west. We had a large department store, and it may seem trivial but the high street was populated with butchers, greengrocers and the like, all offering affordable and fresh options. Fast forward to today and it could not be any more different: we have empty shops, a huge number of betting shops and charity shops, and tons of pawnbrokers. It is a perfect storm for a town that is now the third most deprived in Greater Manchester, and my constituency is the 38th most deprived in the United Kingdom.
The decline is obvious. There is a clear correlation between the rise of the internet and super-retailers and the demise of our high streets. As online retailers took over, the need to commute into Bolton town centre to go shopping quickly became unnecessary. The ease and simple nature of it seemed to offer all upsides and no downsides; a new mode of leisure was here to stay. The pandemic has made things worse. Our high streets in Bolton and throughout the country are now in a concerning state, and it is our economy and the people of our country who are losing out.
I am not saying that we should not be able to shop online—indeed, I am sure all Members have used online retailers—but we need to rebalance the scales to ensure that brick-and-mortar businesses in Bolton can compete with online stores, which have lower costs and can reduce their prices. I want to see Bolton High Street flourish. I want independent retailers, coffee shops, butchers, bakers and others to spring up. I want our high street to reflect the Britain of old: a nation of shopkeepers. For that to happen, we need a Government who take an active role, a state that nurtures business and a taxation system that rebalances the scale in favour of brick-and-mortar businesses.
It is an absolute pleasure to see you in the Chair, Mrs Cummins. I congratulate my hon. Friend the Member for Hornsey and Wood Green (Catherine West) on securing this really important debate.
This debate is apposite, because only last week Barclays bank announced that it is going to close its branch in Ellesmere Port. What is particularly frustrating about that is that I was approached a couple of months ago by a constituent who told me that when they went into the branch they were discouraged from using the counter services. In fact, they were told that it was not available to personal customers and that there were other options available. Lo and behold, two months later Barclays bank says, “We don’t really have people coming into the branch any more, so we don’t need to keep it open.” I am afraid this drive to online services is being used by banks that can frankly afford to keep those branches open. It is part of a wider trend.
We will now go through a 12-week consultation period that has been described as nothing more than a box-ticking exercise. I am pretty clear that Barclays is not going to change its mind. Has any bank ever decided to remain open after announcing its closure? The code of practice needs to be looked at seriously, because we are being treated as a box-ticking exercise. The wider impact of such decisions on our communities needs to be considered much more.
It was 20 years ago that Barclays closed its branch in Little Sutton. It told us then, “It’s not a problem because you can still use the branch in Ellesmere Port.” Now my constituents will be sent further and further afield. HSBC announced that it would close its branch in Ellesmere Port back in March. It said, “You can go and use the branch in Bromborough, about five miles away,” but this week it announced that it is going to close the Bromborough branch. The cumulative effect is there for all to see. It seems that we are powerless to stop this trend, and our high streets are the worse for it.
It is a pleasure to see you in the Chair, Mrs Cummins. I thank my hon. Friend the Member for Hornsey and Wood Green (Catherine West) for securing this important and timely debate.
I am deeply concerned about the future of high streets across Coventry. The covid-19 pandemic and non-stop Government economic mismanagement have put businesses in an impossible situation. Small business owners throughout Coventry regularly tell me how difficult it is to get on and succeed at the moment. Sadly, we have already seen a number of independent businesses shut up shop for good this winter.
Dotted across my city are much-loved independent businesses, but many, including cafés and butchers, have been forced to close this year, because they cannot keep up with skyrocketing running costs, high rent and expensive business rates. Once those businesses close their doors, it is incredibly hard for them ever to reopen. If we allow our high streets to fold, we are in real danger of losing the heart of many communities. I do not want smaller high streets in my city, such as Jubilee Crescent, Spon End and Jardine Crescent, to become empty and abandoned, and nor do I want to see Coventry city centre become hollow.
On Small Business Saturday, I went to visit one of the wonderful businesses in my constituency: the Brownie Box on Sadler Road. The lovely coffee shop not only sells delicious fresh brownies and baked goods but supports the local community. When I sat down to speak to Emily, the shop owner, she told me of the challenges she is facing in staying open. The shop’s energy bill has tripled since the summer, and she is dealing with the fluctuating prices of goods such as eggs. That makes it difficult for her to financially plan. That business is a wonderful bakery, but it needs support to continue to be viable.
There is much that we in this place urgently need to do to save our high streets and support smaller businesses. First, we need to replace business rates with a fairer system that supports smaller businesses, as Labour has promised to do. We must also empower local authorities with the means to invest in our high streets again, rather than cutting their budgets to the bone and failing to deliver levelling-up funds. Local councils should be in the driving seat so that they can properly support their own high streets. We must make it much easier to start up a new business and gain premises.
20 of 38 shown
In 2014, the Centre for Retail Research predicted that the growth in online retailing and change in consumer demand would result in one in five UK stores closing within five years. Sadly, its predictions were correct, yet nearly a decade after they were made, the Government have failed to undertake any meaningful action to keep our high streets alive. One respondent, Trevor, described his local high street as follows:
“Depressing beyond belief. The life and vibrancy have completely disappeared”.
Shops are not the only businesses leaving the high street. Post offices, such as the branch inside WHSmith on Wood Green High Road, and bank branches have also been closing at an alarming rate over the past decade. We must consider the damaging effect of losing these other high street services on small businesses and the welfare of our senior citizens.
At least 50 bank branches have closed each month in the UK since 2015. I look forward to hearing what the Minister has to say about that; he used to mention it quite a lot when he was on the Back Benches, so I hope he will have some solutions now he is in that powerful position. As colleagues will be aware, HSBC announced another raft of closures this week. Some 8 million adults struggle to cope in a cashless society, with 1.9 million reliant on cash for nearly every transaction they make. Small businesses dependent on local bank branches to safely deposit cash will be forced to go cashless if more branches close, further isolating those who only use cash.
Banks are closing disproportionately in lower-income areas, taking their ATMs with them, shutting off free access to cash and quality financial services from those who need them most. At Prime Minister’s questions today, I was pleased to hear my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) ask eloquently what the Prime Minister would do about the closure of banks and the lack of access to cash. I hope the Minister will address that burning question.
Shop closures are also costing jobs. Some 1,001 shops closed between January and July this year, resulting in more than 13,000 job losses. Those closures will be among the 43% increase in insolvencies in the last 12 months alone. Retail employees are facing huge instability at a time when so many people are struggling to pay their bills and put food on the table.
As the Union of Shop, Distributive and Allied Workers —USDAW—has pointed out, retail is one of the few sectors that offers employees the flexibility to balance their work alongside caring commitments, yet many small businesses report that they cannot afford to pay their staff a wage that reflects the increasing cost of living. That is true for one small hair care business in my constituency, Afrocenchix, which told me that, although it would like to pay its staff more, that would mean increasing the cost of its products at a time when customers are tightening their belts. Many small business owners told me that although they struggle to pay themselves, they would go out of business if they put their prices up.
Another matter of acute concern for small businesses is the effect of soaring energy costs. The Government claim to have recognised that, but they have failed to offer a sustainable long-term solution to provide businesses with the assurance they need. For food-producing businesses, which use a lot of energy, skyrocketing energy bills are extremely worrying. The chair of the Crouch End traders group, who owns a bakery in my constituency, told me that increases in product prices are a likely outcome of soaring energy bills. At a time when customers are tightening their purse strings, he believes that this is a perfect storm threatening many traders. The owner of the oldest family-run artisan bakery in Manchester replied to the House of Commons survey to say that their biggest fear was the totally unsustainable increase in energy costs. I hope that the Minister will address this issue when he speaks.
Where is the sustainable support for businesses terrified about their energy bills? Where is the support for businesses to become more energy efficient, to reduce bills and help the planet? One trader told me that
“offering grants for solar panels would help a lot of businesses,”
adding that
“a lot of us want to be greener but can’t afford the initial capital outlay.”
Labour would keep energy bills down by establishing a publicly owned generator, GB Energy, to guarantee energy security and a stable supply of affordable power. We would make Britain a clean energy superpower by 2030, making sky-high energy bills under the Conservatives a thing of the past. There would be an exciting role for small businesses to play, with so many of them wanting to be part of the solution.
The most pressing issue threatening disaster for our high street shops, which was mentioned by every trader I spoke to, is the major burden of business rates. I am sure that the shadow Minister, my hon. Friend the Member for Feltham and Heston (Seema Malhotra), will outline Labour’s position on business rates, which I think is quite an exciting offer that would even out the disproportionate impact on small businesses compared with huge online retailers.
The warning from small businesses could not be more stark: failing to act now to reduce the onerous costs that they face will result in thousands more closures and job losses, even between now and next April. Supporting high street businesses must be an integral and immediate part of any Government strategy to promote economic growth, as it is in London, where the Local Government Association recognises the importance of thriving high streets in its economic framework for growth. Labour has an urgent recovery plan, underpinned by a hardcore industrial strategy for retail, ready to go. I urge the Minister, once he has heard the pearls of wisdom from the shadow Minister, to take immediate action to work collaboratively to improve our local high streets.
I want to pick up on the point made by the hon. Member for Hornsey and Wood Green about the closure of a lot of high street banks. Unfortunately, in Ilkley, we have just had the announcement that HSBC will close its branch, Barclays has already closed, and NatWest has indicated that it will close too. We need to send a wake-up call to the banking sector. I would like to see the banks come together and have a proper conversation about banking hubs. Those could be implemented on the high street, utilising the same premises, and would remove the challenge that banks face keeping their customer base going into branches. We all know that high street banks can help customers who do not live purely in a cashless society. In common with post offices, it is important that we keep those vital facilities going, with a presence on the high street.
In my constituency of Ilkley, and in Keighley, one of the things that causes frustration for local businesses is parking charges. Bradford Council has brought in parking charges in Ilkley, which is incredibly frustrating to a place that is driven by tourists who want to browse our many fantastic retail offerings. When people arrive, they do not know how long they want to stay, so they are faced with the challenge of spending money on car parking and then having to rush back without feeling that they have had enough time to shop and browse. Bradford Council has got it wrong in my constituency. If parking charges have to be implemented, better and more innovative schemes could be considered.
BIDs are an important tool if they have a good culture, a good management team and a good strategy in place. I pay tribute to the Ilkley BID and its manager, Helen Rhodes, who does a fantastic job keeping the sell factor going and driving the good local stories that we have to tell in places in my constituency. On that note, I thank the hon. Member for Hornsey and Wood Green—what a brilliant debate.
The Government should really ensure that retail jobs are well paid, because a large number of people in our workforce are employed in the retail sector—as I said, I worked for almost six years in the retail sector—and retail jobs are real jobs. Retail is a key part of the economy, providing jobs and income for millions of families. We need to ensure that those people get a fair deal, especially in the light of the recent high levels of inflation because of the Government’s bad economic management.
I want to highlight the fact that in May last year it was reported in The Guardian newspaper that in 2020 Amazon had sales income in Europe of €44 billion but paid zero corporation tax. The year before that, the Fair Tax Foundation found that Amazon was—alongside other tech giants—one of the worst companies for aggressive tax avoidance. I hope the Government will take action.
A key stat for the north-west that I want to highlight is that PwC reported that 779 shops in the north-west of England—my constituency is in the north-west of England—have closed since the start of 2022. I appreciate that the pandemic had an impact, but according to the Centre for Retail Research high streets lost 177,000 jobs in 2020. As I mentioned, those jobs are real jobs, and we need a strategy to ensure that people are paid fairly and that those jobs exist.
I could go on for a lot longer, but I know that other Members want to speak and that you set an informal time limit of four minutes, Mrs Cummins, so I will end on this point. We need a clear strategy from the Government when it comes to saving our high streets and saving independent businesses. We also need to ensure that online tech giants are taxed and that we do not allow them to dodge billions and billions of pounds-worth of tax.
Labour plans to replace business rates with a fairer system and devolve power to local communities so that they can decide what they want to do in their local area. We have committed to truly invest in and level up left-behind neighbourhoods such as Farnworth and Harper Green in my constituency, and to spur regional growth. That will ensure that regions are more prosperous and create jobs and opportunities. It will make towns such as mine and others good places to grow up, learn, work and grow old in. People should not have to leave to get on, and improving employment prospects on the high street is key to that. I urge the Government to do more to help our local shops.
Some banks say that post offices can be used, but we are seeing closure after closure of post offices. In my constituency, two have announced their closure in the past couple of months. The Post Office’s flawed model means that they will reopen only if there is commercial partner. That means the great likelihood is the people of Great Sutton and Elton will not see those branches reopen. The people of Elton have already suffered: they had to wait more than a year for a commercial partner to be found the previous time their branch closed, and the people of Neston had the same problem. The Post Office needs to completely reappraise its responsibility to communities, instead of operating on a completely commercial basis.
Barclays made £2 billion profit in the last quarter, so frankly it can afford to keep open every single branch that in recent weeks it announced would close. We need to draw a line in the sand. Will we continue to accept these closures? Will we continue to accept the decline of the high street? Or will we ask these organisations to take a bit more corporate responsibility for their areas, for the communities they are supposed to serve and for people who cannot go online for many understandable reasons?
Councils are not able to offer a solution while they are restricted by ever-shrinking budget rounds and competitive bids that are not always successful. We need a sustainable, long-term strategy for our high streets that requires big anchor organisations, such as banks and post offices, to serve their communities. Without that, the civic pride that people feel in their high streets will continue to erode, and we will all be the poorer for that.
Labour is leading the way. We have pledged a review of starting up businesses in the UK. Only by levelling the playing field will we ensure that independent businesses can compete with dodgy online giants such as Amazon, the warehouse of which in my constituency continues to see my constituents treated unfairly in sub-par conditions, and which does not pay its fair share of tax. Unless we get money back into people’s pockets, bring down bills and deliver new well-paid green jobs, our high streets will continue to collapse. If we fail to provide high streets and small businesses with the help that they desperately need, none of us should be surprised if we see more businesses and shops boarded up, and many communities losing their identities.
The time for action is now. The ball is firmly in the Government’s court. When will the Government back Coventry’s high street and support small businesses?