7. Statement by the Minister for Social Partnership: The retail sector — Contributing to Wales's economic mission

– in the Senedd at 5:03 pm on 11 June 2024.

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Photo of Elin Jones Elin Jones Plaid Cymru 5:03, 11 June 2024

(Translated)

Item 7 is our next item, a statement by the Minister for Social Partnership: the retail sector—contributing to Wales's economic mission. I call on the Minister to make the statement—Sarah Murphy.

Photo of Sarah Murphy Sarah Murphy Labour

Diolch, Llywydd. Last year, in partnership with the retail forum, we published the retail action plan. It provided a clear focus on action and engagement, enabling clarity of contributions towards our shared vision for retail and our economic mission. With our social partners, we have made good progress in delivering against actions outlined in the plan. We have focused our energy on measures to support people who work in retail, the physical place retail inhabits in the wider town-centre landscape and ways in which retail can build its resilience.

Retail is one of the largest private sector employers in Wales, with 121,000 people employed in diverse roles and businesses, from major stores to the wide and varied mix of smaller, convenience and independent retailers across Wales. This is why the sector is important to me and why the Welsh Government is invested in supporting the social partnership to develop, bringing retailers, retail representative organisations, trade unions and Government together to collectively agree how to support this sector in Wales.  

Admittedly, the path is not always smooth. There are no quick fixes, easy solutions or infinite budgets. What we do have, however, is a willingness to work together and a forum that offers a space for members to hear each other’s points of view and reach consensus in agreeing a way forward, benefiting workers and employers alike.

Despite the challenging economic and consumer landscape, which has seen inflationary pressures and other issues impact retail, I am pleased to provide an update 12 months into the plan.

Photo of Sarah Murphy Sarah Murphy Labour 5:05, 11 June 2024

So, what have we done? The last year has seen a particular focus on the people actions in the plan, which aligns with the economic mission's key national priorities about skills, young people and the everyday economy. I believe the adoption of fair work principles will provide a significant pathway to addressing some of the issues faced by the sector. A better deal for workers is one of the keys to unlocking the door to a stronger, better, fairer and more sustainable future for the retail sector. This is why the theme of 'people' is a prominent part of the retail action plan.

In the last six months, we have seen average wages across the retail sector improve compared with Wales averages, which is good to hear, although we do recognise there is still a great deal of work to do to ensure those who work in the retail sector have access to fair, safe and secure work. Welsh Government is working with Cynnal Cymru, the living wage foundation accreditation partner in Wales, to better understand the barriers facing businesses in terms of real living wage adoption and accreditation. We will use the networks convened around the retail forum to share what we have learned. The retail forum has been active in discussing and interrogating the employability, skills and careers offering to the sector in Wales, and we will be publishing new web content to help stakeholders understand the skills landscape across Wales. This will enable members of the forum to engage with employers on the recruitment, retention and skills development of workers in the sector. A retail job should provide equitable access to learning and development to those who choose to pursue the opportunities and a career in retail.   

Retail crime and any abuse of retail workers is abhorrent, unacceptable and should not be tolerated. In the Union of Shop, Distributive and Allied Workers 2023 'Freedom from Fear' survey of UK shop workers, seven out of 10 respondents reported verbal abuse, and nearly 50 per cent reported that they had been threatened with violence in work. No-one should fear going to work or face physical or verbal abuse for simply doing their job. Although criminal justice is a reserved issue and the responsibility of the UK Government, I am committed to working with policing partners and using the levers at our collective disposal to prevent retail crime and ensure staff feel safer in their roles. That includes working with police and crime commissioners and local leaders in the retail sector and encouraging the Home Office to drive forward improvements. We had welcomed the UK Government's move to make a specific retail abuse offence through the Criminal Justice Bill. Although the Bill was discarded following the announcement of the UK general election, we will push for UK legislation in this space to proceed at pace once the election is concluded. 

Crucially, we are investing in retail. In 2024-25, we invested an additional £78 million to provide a fifth successive year of support for retail, leisure and hospitality businesses with their non-domestic rates bills. This builds on the almost £1 billion of support provided through our retail, leisure and hospitality rates relief schemes since 2020-21. Since the plan was launched in 2023, we have been able to roll out an extra £20 million through the futureproofing fund, which will help up to 2,500 businesses in the retail, leisure and hospitality sectors to invest in renewable energy technology, improvements to their premises and upgrades to systems or machinery to reduce energy use in 2024-25. This has been deliberately targeted at hospitality, leisure and retail as it confirms our commitment in the resilience element of the retail action plan. I expect to share news on how retail businesses have benefited from this in the coming year. We anticipate funding to help further advance the retail vision and deliver on the resilience chapters in the plan.

The retail sector is vital to the changing face of our town centres. The town centre position statement, published last year, sets out the challenges faced by town centres and how we will help to reinvigorate them. It connects strongly to our vision for the retail sector, and the actions in the position statement will enhance those in the retail action plan. We need to ensure both support and complement one another. I will be working closely with my Cabinet colleagues to ensure a joined-up approach is taken. I want to see more positive news about this sector, building on great examples that I have witnessed recently on a visit to Blaenau Ffestiniog, and what is happening in Treorchy, bringing together all the different agencies and interested parties so we can replicate this good work across Wales. 

Finally, what next? I look forward to continuing the good relationship with the retail forum and working together in social partnership to take forward and deliver more actions in the plan, specifically shining a light on the actions around place and resilience. I'm committed to working across the Cabinet to collaborate where there is opportunity to improve the retail environment for workers and customers alike, using our influence wherever we can to promote trade union access as the foundation to more collective voice and representation across the sector, and encouraging greater security on pay and working hours by promoting guaranteed hours and the real living wage.

I recognise that this sector is continually dealing with change, whether online, rising costs or shortage of labour, and I acknowledge that there is more to manage in the years ahead. I am appreciative of this sector for its continued engagement with Government, and I will continue to provide opportunities for open dialogue and close working. I am deeply committed to ensure the workers at the heart of the sector and the physical infrastructure of retail remain a key feature in our communities. We have more work to do, but I am confident that, by being at the table, listening and acting together, we can develop a retail sector in Wales that is vibrant, a good place to work and continues to contribute to the Welsh economy now and in the future. Diolch.

Photo of Joel James Joel James Conservative 5:10, 11 June 2024

Thank you, Minister, for your statement. As you have quite rightly said, the retail sector in Wales is vital to providing so many jobs across the country, and of course providing vital skills that are transferable to other industries. Although you haven't mentioned it in your statement, I believe that, in order to improve the retail sector and help improve footfall to high-street businesses, there needs to be a greater scrutiny of what is missing on the high street and what is needed to support shoppers.

One of the issues that I am deeply concerned about, but seems to be repeatedly not included in future plans or even mentioned, is the need for more public toilets. Many shops across Wales are small independent businesses who rely on passing trade and tourism for a majority of their customer base, and a major limiting factor for people accessing the high street and purchasing from many of these shops is the availability of toilet facilities. This is particularly true for older people, those with disabilities, and those with young families. Though there are toilets in some shops, it's not all of them, and those shops that do have them are usually the big national chains. Smaller shopping areas almost always never have public toilets.

Indeed, Minister, there are only seven listed public toilets in the constituency of Cardiff North, four of which are in large supermarkets, one is in a cemetery, and two are in libraries. One only has to walk along St Mary Street late on a Saturday night to see the impact of this. Surely, it is plain to see how investing in public conveniences is essential to helping the high street and many of these small businesses. Therefore, Minister, what assessment has the Government made of the impact of so few public toilets on the retail sector, and what measures are you taking to encourage councils across Wales to improve the provision of public toilets?

Sadly, Minister, Wales has the second highest number of vacant shops in the UK, according to new figures from the Welsh Retail Consortium, with just over one in six shops lying empty. The problem with vacant shops is that they create a feeling of a shopping area being run down, and it has a knock-on effect of fewer people coming to that area, which in turn leads to fewer and fewer shops being opened.

With this in mind, one of the single biggest contributors to reducing footfall for shops is the availability of car parking. Councils and private car parking businesses are squeezing every penny from their parking charges and they are, in many cases, extortionate. They're also becoming few and far between, with many roadside spaces being taken out to make way for cycle paths. In my own council of Rhondda Cynon Taf, the council car parks in town centres are cash only, which causes added issues, as most people now predominantly spend on card and very rarely rely on cash. All of this is making it easier and easier for online businesses to take away trade from the high street. So, with this in mind, Minister, what are your proposals to ensure that there are affordable and accessible car parking facilities available for people to utilise on our high streets?

Finally, I would like to mention the role of architecture in helping businesses to attract an increased footfall. It has been known for some time that architecture plays a key part in encouraging people to visit an area, promoting better social interaction and making people feel happier. Council planning has a big part to play in this, because allowing developments that are not aesthetically pleasing or in keeping with existing designs has actually been proven to put people off visiting. Thus, I would be very interested to know your thoughts on how the retail sector can work with planning departments to encourage better urban design and architecture of buildings that encourages rather than deters people. Thank you.

Photo of Sarah Murphy Sarah Murphy Labour 5:14, 11 June 2024

Thank you very much. Some excellent questions there, which I think many of us probably recognise in our own town centres as they're going through a huge amount of change. So, I think what I'd probably point to in response to many of the issues that you raised with me then is the Transforming Towns programme that we have. That was initiated in 2020 and that is what we're aiming to use to revitalise and sustainably develop the town centres across Wales, and it's underpinned by the placemaking principles that I referred to just last week when we were doing questions to the economy Cab Secretary, and it fulfills the key programme for government commitment, which is £100 million allocated over three years between 2022 and 2025 for various eligible activities. So, that's partly the development fund, that's the placemaking grant, that's the strategic funding as well. 

In relation to what you were saying about public toilets, Joel James, this is something that I'm extremely worried about myself. What's been really sad is that, usually, it's town councils who've come up with the money—because there's such a need, isn't there—within their own budgets to find a place to have a public toilet, which are not cheap to run. And then, when there's a change then to the town, that kind of gets lost, and that's why I think it's absolutely crucial to have really key voices, our voices and Members of the Senedd voices as well, and councillors' voices there, always ensuring that all of the funds and the grants that I've just mentioned, that public toilets are always at the heart of this. We need more of them, I absolutely agree with you, and I will take that on board going forward. 

When it comes to the car parks, I know there are a number of councils who have set aside money in their budgets so that they can have some free hours, at least, maybe three free hours or a certain time of the day, to try and help the town centres and the retail sector. Unfortunately, I know that due to the pressures on budgets at the moment, many have had to withdraw that, but that is something that I know that they do listen to the retailers about and try to recognise that having that place to just be able to drop in and do a few things and buy a couple of things makes a huge difference.

In terms of going forward, though, I'm very hopeful for the upcoming bus Bill. I would ultimately like to see, and many people tell me that they would like to see, more bus links going towards the town centres, and hopefully then going on to our train stations and having that link-up as well, so that you can get out and about and go even further and visit other town centres and retail across Wales. 

And I think a lot of what you were talking about as well comes back to the regeneration that we have going on across a lot of our town centres and leisure facilities across Wales. I think that the retail sector is really crucial to this. Every discussion that I've had with them, they're really alive to this. It is about making sure that they're not overshadowed by the new and shiny that comes in, or even the new units that are put in. We have to make sure that everybody has a voice. But thank you ever so much for your contribution, especially on the free public toilets. I will absolutely incorporate that into my future discussions with the sector. Diolch.

Photo of Luke Fletcher Luke Fletcher Plaid Cymru 5:17, 11 June 2024

I don't believe I've had the opportunity to formally welcome you into your new post, Deputy Minister, so I'll take that opportunity now. I want to start by just saying, actually, I think the focus on people and skills is a really important one, and I think potentially the right one to start with, because I think what we often forget about with the retail sector—and I also include hospitality in this as well—is that we have a sector of the economy where there's some incredibly skilful people, often unrecognised as well. And I think that speaks a lot to the cultural change that we need to see when we deal with retail workers and hospitality workers.

A number of people in this Chamber used to work in hospitality and retail, and we've all experienced it. I was just thinking now about some of the stuff that used to be said to me when orders weren't done right on the bar: 'You're useless', 'You're a waste of space', 'When are you going to get a real job?' I suppose that has been good grounding for this job, Llywydd, because I seem to be still getting some of those things now, but that's no way to treat anybody in any job, especially when people are there to help. So, I'd be really interested to understand where the Government is going now in terms of trying to change that culture in retail and hospitality, because it's a stark difference to how people in hospitality, for example, are treated on the continent. It's seen as a proper job and it's seen as somewhere where people are able to thrive and get on in life, and to go up and work their way up through some of the businesses that are present there.

I think, actually, when it comes to the retail sector, it's one of those sectors where there's a need for cross-portfolio work and I think cross-sector link-up as well. So, what do I mean by this? Well, for example, if I come back to hospitality, when hospitality is doing well, retail generally is also doing quite well; it's highly likely that that would be the case. And when it comes to cross-portfolio, there's a number of policies that need to be put in place to create that environment for both of those sectors to succeed.

Now, we know it's a tough time for the sector with the cost-of-living crisis. It's been called a perfect storm, and that can be seen, I think, and reflected on the high streets, with the number of empty shops that we're seeing. So, what is the Government's strategy to enable retail to take up some of those spaces, because the retail action plan seems to have had little effect in that regard? I point to business rates, and you mentioned it in your statement. The loss of the 75 per cent reduction has hit high-street businesses quite hard, so I'd hope that there's been some work to look at whether there's potential for that decision to be reversed. But if not, then what—? It could be done around varying the multiplier, to take some of that pressure off the retail sector and the hospitality sector. I know that would be very much appreciated by the sector.

The Deputy Minister will be aware of the situation in Bridgend town. I think there are actually two positives we can take from the approach of the council, to be fair. So, Bridgend County Borough Council seem to actually get that link that I mentioned between hospitality and retail. They've focused on getting more food businesses into the town, to bring people back to the high street, thereby increasing footfall. And high-quality places have been brought into the town with high-quality experiences. I mean, I challenge anybody in this Chamber to go to Marble Steakhouse and tell me that it can't compete with places in Cardiff, and you might be able to tell by my waistline that I'm a regular there.

But they've also, so I've been told, made available grants to convert commercial space into residential, like above shops. Now, if that's true, then that's great. We tackle two issues there: we tackle housing and then we tackle that footfall issue on high streets. You end up getting, actually, that in-built footfall, who will be looking for those services. They'll be looking for retail opportunities and they'll be looking for some of those experiences that hospitality provides. So, I'm really trying to get an understanding here about how your strategy actually looks at these joined-up approaches that essentially go on to benefit retail. And how do we actually make it easier, as well, for councils to implement some of the stuff that BCBC are doing, that places like Caernarfon have done?

I think in this particular part of your portfolio, you'll have a lot of support from across the Chamber. I mean, we all live in our communities, we want to see them thrive, we want to see the high street thrive, we want to be able to go into our towns and have a good time. So, in that sense, I think there's a lot of support, but I'd be really interested just to understand now where we go from here.

Photo of Sarah Murphy Sarah Murphy Labour 5:22, 11 June 2024

Thank you very much for all of those questions. You started by saying that the people first was a good place to begin, and that came up through the forum. That came from everybody working together, and that's what they wanted to focus on. When you talk about the labour force, this is something that came up at the retail forum yesterday. It was probably the first thing that we all touched on. There is some data that seems to be coming out from ONS at the moment that's saying that 18 to 24-year-olds at the moment seem less likely to be in the labour market in general. Obviously I say that very tentatively; there hasn't been much digging in to that. But because of that, as you said, how many of us worked in those sectors when we were younger? That's when people tend to come into it, find a love for it, a passion for it, because, as you said, you're talking and dealing with people face to face, and, you know, there are so many skills that you have, personable skills that you have in particular. But they seem to be missing a little bit from the workforce at the moment. I think that that's probably having an impact on it, so that's something that we're going to explore a little bit more, and so is the Cabinet Secretary for Economy.

I think also there's a piece of work there to do with Careers Wales. I know we say this for a number of different sectors, but I think that that's really crucial. But one of the things that I will reiterate on that is that, if you want it to be a sector that people want to train and work in, and work in for a long time, the real living wage, the skills and employability, other things around mental health and well-being; it needs to be a place that is embedded in fair work and that people want to go and work in and work in for a long time.

In terms of the empty shops, I mean, we're starting to see now—. The second part of this now is going to be moving on to the place and the resilience. I'm seeing some excellent examples of places being used as incubators, as places where people can go in and work communally, being used for pop-ups. I think what it needs, really, is that—. Local authorities, as you said, are doing some wonderful things; it's just about working with them, so that they have that confidence. Because, at the moment, when budgets are really tight and the funding pots are kind of there, but you kind of have to figure out how to fit into them and get the most out of them, I think that they just need a little bit of confidence and that working together, to see where things can work.

You mentioned Bridgend and the night-time economy, you know, you can't get a table in some of these towns on a Friday and Saturday night, and that's wonderful. But I think it also highlights that we don't want each town centre to become an identikit of each other; we want each one to have its own personality, so special things and uniqueness that people go there for, so that's what I would like to see each town centre have; I think we all would like that. I recently went to see Siop Inc in Aberystwyth, and that's an incredible store run by a family, and people deliberately go out of their way to go there, just to see her and her family because it's so wonderful. So, I think the sharing of best practice, that's going to become now part of the next strategy.

And just to say on the rates, this is of course coming through; these are questions that I've been asked across the Chamber. Tough choices are being made right now because of budgetary and inflationary pressures, but I will say that only one in five properties are liable for their full bill this year, and we have committed £384 million for non-domestic rates support next year as well. I hope for better days, and I hope that that will be able to change in the future because it is something that's coming through, so I take that on board as well. Diolch.

Photo of Jenny Rathbone Jenny Rathbone Labour 5:26, 11 June 2024

I represent many people who don't have a car and they rely on public transport to get them to their local shops, so they're particularly vulnerable to not being able to get hold of the things that they need just for their weekly shops. I think this is really key to people's well-being, because of course people can buy things online, particularly predictable things like heavy goods, tinned goods, but it cuts out all the interaction—the incidental interaction that takes place when you meet your neighbours in the streets—and I just think this is such an important issue. If fresh food isn't available locally, home delivery is some sort of an option, but it doesn't enable you to choose the things that are best value or the things that are on sale if it's a clothing item. So, how does placemaking fit into the Welsh Government priorities here to strengthen the emotional as well as the economic resilience of communities, celebrating local skills and local businesses to ensure that the profits stay in that community, as opposed to being some huge multinational and all the profits going elsewhere?

Photo of Sarah Murphy Sarah Murphy Labour 5:27, 11 June 2024

Thank you very much. I know you're very passionate about this and especially the access to fresh food and also just to the variety and the equality aspect of this, and fairness, that people should be able to have access to everything that everybody else has and not have to pay over what they should be paying, just because they can't get out and about and get further and get those deals, ultimately.

Your question, though, really reminds me of the visit that I did to Blaenau Ffestiniog. I thought that was incredible, how the community had actually come together, and when their tourism information centre was going to go and the building was going to be left empty, a couple of the businesses around there, some of them retail businesses, got together and they have a community share now in the building and they have a community cafe. It's absolutely fantastic.

Also, recently, the hardware store was going to close because the two people who had run it all their lives were going to retire. The community got together and they were like, 'We cannot lose this hardware store', and they got together to find somebody who would be able to run it in the interim. They're now buying up the empty properties and looking for things that they feel the community need, like, for example, they're going to create a space for youth homelessness shortly.

So, what I would say is—and I can share this with you—I've seen some fantastic working where the community comes together like this and it's like, 'What do we actually need as a community, and can we actually get together and do it on a co-operative model, where everybody kind of benefits from it?' So, if you'd be happy, I'd be really pleased to share that best practice with you. I think that this is a model that could really work, especially in parts of your constituency.

Photo of Elin Jones Elin Jones Plaid Cymru 5:29, 11 June 2024

(Translated)

Thank you, Minister. That brings today's proceedings to a close.

(Translated)

The meeting ended at 17:29.