That this House has considered the future of the high street.
There is no shying away from the fact that this pandemic has clearly had a devastating impact on the great British high street and on the businesses that occupy it. I have great sympathy with anyone whose business or job has been endangered by this pandemic, and I want to reassure the House that this Government are unwavering in our commitment to support our high streets and town centres in the weeks and months ahead. I am personally very passionate about our high streets and town centres. They are so much more than places to shop. They are where we meet our families, friends and neighbours, and where communities come together to work and to socialise. They are a focal point within our local areas. They are, of course, also home to thousands of people who are just as keen as the local businesses that occupy them to see their high streets bustling and thriving.
Prior to the pandemic, our high streets were already going through a significant evolution, with changing consumer habits and changes to what people are wanting to see on their high streets. People are shopping online more frequently, and our high streets are having to adapt to the 21st century to become more than just retail hubs. Since March, we have seen an acceleration in the trends that our high streets were facing. Online shopping has risen from pre-pandemic levels of about 20% to a high of 33% of total retail sales in May. Footfall has also decreased as a necessary consequence of the effort to protect public health, which is why businesses have been unable to trade as they normally would. We are proud to see so many businesses and communities coming together to support their local high streets. In my own constituency, independent retailers, businesses and local groups have come together in co-ordination with the business-led Rochester city centre forum to provide a covid-safe experience in the run-up to Christmas. Although closed, some outlets have created fantastic window displays and decorations and are offering click-and-collect services and working together to support the high street.
I know that a lot of people are keen to speak, so I should perhaps continue a bit further.
We value the support of trade bodies and representative organisations that are working with their members and the Government to plan for recovery. It is clear that covid-19 has dealt a major blow to the high street, as evidenced all too clearly by the well-known retail chains—including Debenhams and Arcadia Group Ltd—that have gone into administration.
The Government have put in place a range of support measures to assist businesses on the high street. We have provided a comprehensive package of support worth £200 billion, including the eat out to help out initiative to help to protect 2 million jobs in hospitality. We have also provided 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; the coronavirus job retention scheme; and the deferral of income tax payments.
My constituency is extremely grateful for the moneys that have been provided for the high street, but does my hon. Friend agree that when consultations are taking place and project developments are being created, people in the high street in places like Cheadle in my constituency require proper consultation and should get proper consultation before matters are taken any further?
I agree with my hon. Friend that local high streets are a valuable asset in our local communities and it is absolutely right that local businesses and stakeholders should be consulted and that we should get their buy-in. Any high street development should always be supported by local businesses and stakeholders.
We have acted quickly and our package of economic support is one of the most generous and comprehensive in the world. The Government announced in the spring that the business rates retail discount would be increased to 100% and expanded to all eligible properties across the retail, hospitality and leisure sectors for 12 months. We have sought to bring a much needed breathing space to business tenants by bringing forward a moratorium on commercial evictions and restrictions on statutory demands, and by winding up petitions.
The use of commercial rent arrears recovery has provided landlords and tenants with time and space to agree reasonable adjustments to rents and lease terms, including terms for the payment of accumulated rent arrears. I am pleased that so many stakeholder bodies have signed up to the voluntary code of practice to encourage constructive dialogue between tenants and landlords. We will continue to work urgently to identify further measures of support that can be put in place to assist them during this time.
We recognise that our high streets and the businesses located on them need to adapt to the changing way in which consumers are using high streets, so we are supporting areas by funding investment in infrastructure and place. Our £3.6 billion towns fund and the future high streets fund competition will create jobs and build more resilient local economies and communities as we begin to recover from the impact of coronavirus. We are now in the final stages of assessing the proposals from the shortlisted future high streets fund applicants and expect to announce the outcome of the competition soon. We have brought forward £81.5 million from the towns fund for investment in capital projects that will have an immediate impact. Each of the 101 towns selected to work towards a town deal has received accelerated funding dependent on their population.
A considerable number of Members have put in to speak, so I am afraid that we will start with a time limit of three minutes for all Back Benchers. If any Back Benchers who are on the call list wish to withdraw, they should get a message to the Speaker’s Office or come to the Chair and inform me. Please do not assume that the list is exactly as it was, as a number of Members have withdrawn already, and if you miss your place, you will be put to the very bottom. I call Steve Reed.
As today is the first day of Hanukkah, I would like to wish everyone in the Jewish community chag sameach.
I am afraid that the Government are standing by as Britain’s high streets decline. Footfall on our high streets was down by 10% under the Conservatives even before the coronavirus hit, and about one in 10 high street shops were already standing empty. Since 2010, the Conservative Government have presided over the closure of 773 libraries, 750 youth centres, 1,300 children’s centres, and 835 public toilets. This Government are devastating the vibrant high streets that are the heart of our communities and of our British way of life.
Mary Portas, who led a Government review of the future of British high streets, now has this to say about the Government:
“They need to wake up. It’s shameful that they have still not readjusted their thinking on how Amazon and the delivery giants should be paying equivalent rates of tax online. It’s shameful they’re not doing anything about it. Their slowness in understanding, their tardiness, is ridiculous.”
She is angry because the Government have done nothing to address the massive disadvantage that high street businesses face compared with online retailers. Labour has repeatedly called for a root-and-branch review of business rates to make the system fairer and help high street shops to compete with online tech giants. Debenhams has recently gone into liquidation, with a potential loss of 13,000 jobs. Arcadia has gone the same way, putting 12,000 jobs at risk, with the loss of leading brands like Topshop, Burton and Dorothy Perkins from our high streets. Retail is clearly changing as shopping moves online—a process speeded up by the pandemic—so it is all the more astonishing that the Government have done so little to level the playing field between bricks-and-mortar shops and online retailers.
We all owe a debt of thanks to retail workers for all they have done to keep the country going through the pandemic. They have put themselves at risk to keep our shops open and the shelves well stocked, so what a disgrace it is that the Government are rewarding so many of them with job insecurity and job losses. The covid-19 pandemic has deepened the emergency on our high streets. Since the economic crisis began in March, up to 20,000 shops have closed and 200,000 people have lost their jobs in retail and hospitality, but instead of offering the help that is needed, the Government are refusing to properly support businesses under the highest tiers of covid restrictions.
It is a pleasure to speak in this debate. Such is the depth of feeling on this issue of many right hon. and hon. Members that it has been well over-subscribed. Many may get up to talk about their high streets, but no high street has the international repute of my main high street, Lord Street in Southport, which was the basis on which the Champs Élysées was built—the most glamorous street in the world.
Before I go into further detail on that, may I just add that we have great shopping high streets: Ainsdale, Churchdown and Birkdale. You know that, Mr Deputy Speaker, because you have shopped there yourself and took away some great gifts for the people whom you know.
I would just like to thank the Minister and the Government for all the support that has been given throughout the covid crisis. It has been invaluable to many businesses in enabling them to stay open, and we need to move into the future with more sustained support. One thing that we all know—this is absolutely clear—is that the internet is the biggest challenge to our high street. It has already been said that a fifth of sales and a third of retail sales during the pandemic have been online. If we were to reverse that trend, there are things that we need to do. We need to have a look at business rates. Business rates need recalibration because it is absolutely clear that, under the current model, businesses will not be sustainable. If we get to grips with business rates, that will give businesses on our high streets a thriving chance.
When we look at the future of our high streets, we have not only to look at business rates, but to increase footfall. Getting people into our towns, villages and cities is absolutely vital to their survival. The mess that we see in London, where roads are closed and people are prohibited from going down some streets, is happening elsewhere. It is happening in my local area as well. I point out to the hon. Member for Croydon North (Steve Reed) that my local Labour council is stopping people going down some streets, getting to the high street and getting into the places that they want to get to. People want ease of access. Having worked in retail for 20 years, I know that ease of access is the best way to get people into our towns and cities.
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 also 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 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 get about. Everything must be within easy reach and as accessible as it possibly can be.
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?
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.
The hon. Gentleman is making a very important point, which I intend to follow up in my speech. Does he agree that the withdrawal of the VAT rebate will affect all parts of the United Kingdom, particularly in Scotland, including firms such as Johnstons of Elgin, where manufacturing and retailing will be affected?
I absolutely agree with the hon. Gentleman, and I look forward to hearing that aspect of his speech. I believe the change could affect anything up to about 33% of sales for the company he mentions, but overall, as well as imperilling the opportunity to develop routes from regional airports, a total of about 40,000 jobs and over £1 billion of investment could be at risk. It is little wonder that the French financial newspaper Les Echos has argued that the UK is in danger of shooting itself in the foot here.
Earlier I talked about business rates, and wholesalers have also been missed out. They are absolutely critical to the supply chain for many of our smaller communities. They have been given some direct support from the Scottish Government, but have missed out on support from the UK Government. I encourage the UK Government to look at including wholesalers in the support available to that part of the sector.
In conclusion, high streets in communities of all sizes face challenges on a number of fronts. We have heard some from the speakers so far; no doubt we will hear new aspects as the debate continues. But with the right Government support, at local government and national Government levels, our town centres have the opportunity to thrive as places where we work, rest and play, and effect the necessary transitions in how land and buildings are used. In Scotland, we would obviously rather the Scottish Government were able to do all that is necessary in that regard, rather than just some. Following some of our earlier debates, it would be far better if, instead of grabbing powers from Holyrood through the United Kingdom Internal Market Bill, the UK Government were instead transferring powers to the Scottish Government, particularly financial powers and borrowing powers, so that they can get on with doing all that is necessary, instead of having to wait for it to happen elsewhere.
Order. There will now be a three-minute limit on all remaining Back-Bench contributions.
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The new £4 billion levelling-up fund for England that was announced in the spending review will be open to all local areas and allocated competitively. To support levelling-up opportunity across the country, we will prioritise bids to drive growth and regeneration in places in need—those facing particular local challenges and areas that have received less Government investment in the past.
A call for evidence was published on 21 July for the fundamental review of business rates, inviting stakeholders to contribute their views on ideas for reform in all elements of the business rates system, including future reliefs. Government are now considering the responses to the call for evidence, and the review will conclude in the spring.
We are also ensuring that our planning system is ready to support our high streets and communities in recovering from this pandemic and changing consumer habits. We have introduced reforms that create a new “commercial, business and service” use class, which encompasses a wide range of purposes, allowing businesses to attract people to high streets and town centres. That includes offices, shops, cafés, gyms and other uses that are suitable in town centres. The new class also allows for mixed use, to reflect changing retail and business models. The reforms also create new “learning and non-residential institutions” and “local community” use classes, ensuring that valued local assets such as community shops and libraries are protected. Businesses will have greater flexibility to adapt and diversify more quickly to meet changing needs and circumstances.
However, the success of a high street is about more than just funding. It requires local people to be empowered with the tools and resources they need to help their town centres and high streets adapt for the future. It is about having an ambitious vision for the future that the whole community can buy into. That is why Government are supporting local leadership through the high streets taskforce, which is doing this in four ways: building local authority capacity by providing on-the-ground experts; improving place-making skills through access to training; improving co-ordination nationally and locally, to ensure that high street plans reflect the needs of their communities; and improving the use of data and best practice.
The taskforce is being run by a consortium led by the Institute of Place Management. Over the next four years, it will provide expert guidance to those working in local authorities and business improvement districts, while supporting town centre managers and community groups to help their high streets adapt. In response to the pandemic, the taskforce published a covid recovery framework to inform local places in planning their response to the pandemic. I know that a number of high streets have found this useful and that St Helens, Norwich and Solihull have been among the early users of the framework. The taskforce will be providing in-person expert support to those high streets that need it most, offering expertise on subjects such as planning, design and place making. We continue to explore what more can be done to help our high streets and town centres quickly recover and adapt.
While covid-19 has posed huge challenges for our high streets, we have also seen some inspiring examples of businesses adapting and communities rallying round to support their local independent shops through the pandemic. For some communities, this lockdown has led to a reconnection with the local. We know that footfall has returned to our district centres at a quicker rate than it has in our larger town and city centres, with people wanting to shop and socialise closer to home. Research from PwC and the Local Data Company also suggests that independent shops have fared better than chain stores over the course of the pandemic. That may give a glimpse into the future of our high streets as places of commerce but also unique spaces that reflect the needs of the local community.
That has been underscored by my Department’s experience of running the Great British High Street awards. What linked all our winners was a unique offering and sense of belonging, and it is this sense of local community—this intrinsic link between our high streets, our town centres and our society—that we will re-establish and strengthen as we emerge from this pandemic. I believe that we can renew our mission to help our high streets adapt, not only to support their recovery from the effects of covid-19 but to help them continue to evolve and flourish for generations to come.
Hospitality businesses and their supply chains are in particular trouble. Some 5,500 pubs and bars have already closed in the 10 years since the Conservatives came to power—that is one pub gone every 14 hours that they have been in government, for a full decade. This sector now urgently needs support to survive; otherwise our high streets will be further blighted with the closure of more pubs, bars and restaurants. After struggling to survive the pandemic for nine months, businesses are now in a far weaker financial position. For many that rely on the Christmas period, trade is dramatically down this year.
It is astonishing that in these circumstances the Government have chosen to cut business support compared with what was available earlier this year. Analysis by the House of Commons Library shows that 99% of hair and beauty salons are receiving less support than in March, along with 95% of cafés, 92% of gyms, and 77% of pubs and restaurants. Do we really want to emerge from this crisis with so many of these vital small businesses closed down or boarded up?
The Government’s planning reforms further threaten the viability of our high streets. Earlier this year, they forced through changes that give developers sweeping powers to permanently remove shops from our high streets, creating dead zones by converting retail units into low-quality flats that can then never reopen again as shops or community spaces. Back in March, the Government promised to fully compensate councils for getting communities through the pandemic, but they broke that promise. That breach of trust leaves councils less able to support the economic recovery in our high streets. According to the independent Institute for Fiscal Studies, councils face a £1.1 billion covid funding gap, leading to in-year cuts and job losses right now, and there is worse to come next April, with a £4 billion funding gap that means more cuts, more job losses, and less support for economic recovery for struggling businesses and struggling high streets.
If that was not bad enough, the Government appear to be on the brink of the greatest act of vandalism ever inflicted on the British economy in peacetime, with the chaos and catastrophe of a no-deal Brexit pushing up costs, cutting off supplies, and closing down exports. The abiding image of this Government will be a boarded-up shop on a rundown high street. The Prime Minister was not joking when he said “eff business”, because that sums up this Government’s entire approach. The Conservative-led Local Government Association estimates that the Government have cut £15 billion from council budgets over the past decade. The towns fund puts back less than a quarter of that devastating loss. It is better than nothing, and we welcome the funding for towns that have received it, but what is less welcome is that many deserving towns have not benefited at all. Those high streets, and there are hundreds of them, have been left to slide further into decline because Conservative Ministers deliberately carved them out of receiving any funding. Towns such as Heywood, Halifax and Sunderland surely deserve better than this.
There is a better future for our high streets if only the Government would seize it. The British people want their high streets to be vibrant, lively and thriving places that they can feel proud of. There is a better future where high streets can take advantage of the change in shopping habits to break free of the straitjacket of uniformity. We could encourage more small local businesses by levelling the playing field on business rates. We could create more community spaces, instead of forcing the closure of libraries and community centres by continually slashing council funding. We could work with developers to create more shared work spaces and touchdown desk spaces that reduce the need for commuting, instead of creating dead zones where the shops used to be.
In all the darkness of the pandemic, one of the bright spots for many people has been the rediscovery of a strong sense of community. What an opportunity we have to build back better, to reinvent our high streets for the future as the beating heart of those communities, but instead we are stuck in a cycle of levelling down under an incompetent Government without a vision that matches the ambition of the people of this great country.
I say to the Minister that we need to intervene when it comes to parking charges. The biggest issue for every retailer in my town is parking charges. The Road Traffic Regulation Act 1984 says that parking charges should be proportionate, and not undermine the vitality of our towns. In my town, those charges do just that, and I want this Government to intervene on that.
We have a town deal, which is great. Not just Conservative towns, but Labour towns, too, will benefit from this significant funding stream. In our town, this will be matched by the private sector, which has committed more than £300 million if we get the £50 million that we put in for.
Last week, we all went out, I hope, to celebrate Small Business Saturday. That should not be an annual celebration; it should be a way of life, and we should all support our local businesses weekly.
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 at 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.