Employment and the High Street

– in Westminster Hall at 4:30 pm on 7th December 2022.

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Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs) 4:30 pm, 7th December 2022

I beg to move,

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.

Photo of Virginia Crosbie Virginia Crosbie Conservative, Ynys Môn

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?

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

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.

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 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 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.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

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.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

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.

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.

Several hon. Members:

rose—

Photo of Judith Cummins Judith Cummins Labour, Bradford South

Order. Members will see that the debate is heavily subscribed, so I ask that they stick to around four minutes initially.

Photo of Robbie Moore Robbie Moore Conservative, Keighley 4:43 pm, 7th December 2022

It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank 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.

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.

Photo of Navendu Mishra Navendu Mishra Opposition Whip (Commons) 4:49 pm, 7th December 2022

It is a pleasure to serve under your chairship, Mrs Cummins. I congratulate my hon. Friend 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 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.

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.

Photo of Yasmin Qureshi Yasmin Qureshi Shadow Minister (Equalities Office) 4:53 pm, 7th December 2022

It is, as ever, a pleasure to serve under your chairmanship, Mrs Cummins. I thank my hon. Friend 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.

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.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy) 4:57 pm, 7th December 2022

It is an absolute pleasure to see you in the Chair, Mrs Cummins. I congratulate my hon. Friend 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.

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.

Photo of Taiwo Owatemi Taiwo Owatemi Labour, Coventry North West 5:00 pm, 7th December 2022

It is a pleasure to see you in the Chair, Mrs Cummins. I thank my hon. Friend 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.

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?

Photo of Rachael Maskell Rachael Maskell Labour/Co-operative, York Central 5:04 pm, 7th December 2022

It is a pleasure to see you in the Chair, Mrs Cummins, and I thank my hon. Friend Catherine West for securing the debate.

If we were in York today, we would see that it is buzzing, which is no accident, because York BID—the business improvement district—along with the York High Street Forum and Indie York, which represents 65% of businesses in York, have worked so hard. York is thriving, but they are worried about what will come in the new year, and they certainly do not feel comfortable about that, not least given the challenges ahead. Energy is still an issue, but we are also still working through this recovery, which will take some time.

Today, I will focus my comments on some of the innovation that is happening in the high streets of York. We have the StreetLife project on Coney Street, which is looking at the future and considering what York’s high streets are going to be like, including the opening up of a new high street on the riverside that will be a new opportunity for businesses to invest. Currently, a centre is open that people can come into, and it is wonderful seeing children playing in what used to be a high street shop. People can come and just take in what our city is about.

I want to focus in particular on the Guildhall project. We are looking at new skills, businesses and opportunities in the city. The University of York has made a significant investment, as a university for public good, working to take a 30-year lease. Already, we are looking at 160 jobs coming into the city centre, giving it a new life. The university says:

“A crucial part of the University’s civic mission as an institution for public good is to support local business and community networks, and as we rebuild and recover from the pandemic the Guildhall will enable us to provide more expertise and training to help our regional businesses and charities to recover, innovate and grow.”

The Guildhall project is really exciting. The 15th-century Guildhall now has offices around it, and Eagle Labs and the University of York have come along to support new entrepreneurs in our city to accelerate their businesses and grow them, bringing new businesses into our city centre with office space, conferencing facilities, a café and co-working. There is a great opportunity there, with training and networking for existing businesses, and business leaders coming into the heart of our city. This is how we are revitalising our high streets: with the businesses for the future and the new communities for the future.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

I congratulate my hon. Friend on her positive tone. Combined with her ideas on housing, which she has talked about in the House, what she describes could be a really fantastic way forward for York, with the university, the housing and the vibrant high street.

Photo of Rachael Maskell Rachael Maskell Labour/Co-operative, York Central

I thank my hon. Friend for her comments. Of course, we are building that vision for the future of our city and it is coming to life.

There is not only the Guildhall project. Spark is a community interest company in our city centre that has now set up in old shipping containers, no less. It is a real community space where there are start-ups, support, events, a food bank, a kids’ cinema kids—you name it, it happens at Spark. It is an exciting place.

We need to ensure that the kinds of initiatives I have mentioned get the support that they need to be able to grow and create the next generation of our high streets. That is why I look to the Minister, while he has the pen in his hand, to think about how we invest in the future of our high streets. In particular, we should look at the investment funding pots that can be applied to, to ensure that we really give energy to these opportunities and see the businesses, growth and entrepreneurs flourish in the future, while ensuring that we build stability in our towns and cities for the years ahead.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health) 5:08 pm, 7th December 2022

It is a pleasure, Mrs Cummins, to speak in this debate.

I congratulate Catherine West on setting the scene so very well. We thank her for securing the debate, and thereby giving us all a chance to contribute.

It is very nice to see the Minister—the Under-Secretary of State for Business, Energy and Industrial Strategy, Kevin Hollinrakein his place. I was referred to today as a poacher turned gamekeeper. That is probably very much the case with the Minister, because he participated in and supported us in such debates when he was a Back Bencher.

Our local high streets are the backbone of not only our economy, but our constituencies. Some local businesses on our high streets faced devastation through the covid-19 pandemic—subjected to a lack of footfall, temporary and permanent closures and, more recently, struggles with payments due to the rising cost of living. In my constituency of Strangford, there are high streets in towns such as Newtownards, Comber and Ballynahinch. Villages in my constituency also have many smaller, but unique, shops. The high street in the main town, Newtownards, thrives throughout the week, especially on Saturdays, when there is a local market. Robbie Moore said that a shop in his constituency had been there for 60 years. Wardens—a family-owned firm that employs 55 people—has been in Newtownards for 145 years, and we have other family-owned shops that employ fewer people but still provide employment; for example, the butcher’s shop employs 65 people, although that is a massive store. We also have branded shops such as Peacocks and Argento. Comber High Street has a farmers’ market once a month, where local farmers can come together to sell produce made in the heart of Strangford’s farms and villages.

Coronavirus obviously had an impact on employment in our local high streets. As lockdowns lifted, the footfall was unfortunately not the same. I think that has now come back to a certain degree, although rising costs and prices have had an effect. Northern Ireland’s Minister for the Economy initiated earlier this year and last year a local high street voucher scheme. It is probably unique to Northern Ireland, although I know the Minister is aware of it. Every person aged over 18 in Northern Ireland was given a £100 voucher, and the scheme contributed some £140 million to the economy.

We also have some issues with derelict buildings, as has been the case in Court Street, just off High Street, in Newtownards, although I am pleased to say that we now have an ongoing regeneration plan. It is hoped that an area that was once housing and some smaller, unique businesses will be returned to the glory days of the past. Unfortunately, the very nature of derelict buildings brings other antisocial behaviours.

High streets and town centres have struggled in recent years as trends have changed. The hon. Member for Keighley and others mentioned online business. A few years ago, Excel Clothing in Newtownards recognised that although it had a lovely shop front on the high street, it needed to go online. The owner did that and now half his business is online. That is a good thing.

Young people today would rather find gifts online—order them and have them delivered—than go out and trek around the shops, whereas my wife, all her family and that generation love to go shopping; for them, it is part of the fun. I have to say that my wife Sandra does all the shopping; I just make sure the money is available!

We can provide encouragement to ensure our high streets are looked after and made good use of, especially coming up to Christmas. Our local economies feed into the economy of the country. I know that the Minister and the shadow Minister grasp the importance of the high street for us all, and we look forward to hearing their comments. We must make more use of the amazing businesses offered to us, the core of which has to be the high streets in my constituency of Newtownards and in everybody else’s constituencies.

Photo of Seema Malhotra Seema Malhotra Shadow Minister (Business, Energy and Industrial Strategy) 5:13 pm, 7th December 2022

It is a pleasure to serve under your chairship, Mrs Cummins. I congratulate my hon. Friend Catherine West on securing this popular debate, which comes soon after the 10th anniversary of Small Business Saturday. As someone who grew up above my parents’ small business, I was delighted to celebrate with my hon. Friend and so many colleagues from across the House.

Everyone has spoken powerfully. My hon. Friend the Member for Hornsey and Wood Green, Navendu Mishra, for Bolton South East (Yasmin Qureshi) and for York Central (Rachael Maskell), and Jim Shannon, have spoken on common themes: the need for regeneration; the need to tackle the high costs affecting local high street businesses; fluctuating prices hitting profitability and services; the urgently needed business rates review; the closure of bank branches; the loss of ATMs; the impact on families and local consumers; and the need for civic pride.

We are also here to celebrate our small businesses and high streets. Good high streets are anchors of community life, where neighbours come together. They employ so many in the local community: an estimated 14% of the UK workforce works on the high street, in civic centres, leisure centres, cafés, offices, banks, post offices and so on. Our high streets reflect and shape the character of the places they are in. They are the backbone of what Labour calls the everyday economy, they are central to our growth agenda for the local and national economy, and they are a space for local entrepreneurship and community businesses. Those arguments are made so powerfully by UKHospitality, the British Retail Consortium, the National Hair & Beauty Federation and others. We need to see our high streets thrive.

We all know that, as has been illustrated in the debate, times have been tough. But they have been made tougher because of the lack of action—speedy action—from the Conservative Government. They also do not do enough to pre-empt the impact on local communities of the decisions they make in respect of local authority spending cuts and so on.

We have also seen the issues relating to shifting spending patterns and the severe inflationary headwinds leaving consumers with less money to spend and retailers with slimmer profit margins. PwC expects Christmas spending to decline by £1.8 billion—and that is in the golden quarter, when retail traditionally recoups any losses. This matters because, as emphasised by Gordon Brown’s commission on the future of the UK, launched this week, the high street prospers only when the local community and local economy are strong, because people need money in their pockets in order to spend it.

The stress caused by the cost of living is now a major cause of abuse against shop workers. Retailers such as Tesco, representatives of which I met last week as part of its winter food-collection scheme, told me about the increase in the shoplifting of everyday items. People are struggling just to get by. The trade union USDAW, which has made powerful contributions to the wider debate, says that verbal and physical abuse is worsening. On a recent visit to Sainsbury’s I saw for myself the fortitude of staff in dealing with abuse that should not be coming their way.

The decline of the high street is a problem we have been aware of throughout the Government’s time in power. They even commissioned the Portas review, but in August Mary Portas hit out at the Government for their dither and delay while high streets faced what she called the “biggest proper crisis” she has seen. Last year, the Levelling Up, Housing and Communities Committee criticised the Tories’ current solutions, such as town deals, the towns fund and the high street taskforce, as

“too complex, short-term, and fragmented”.

They do not come anywhere near to making up for 12 years of local authority underfunding, let alone a strategy for regenerating our high streets and supporting businesses to achieve net zero.

Unlike the Conservatives, we want to see high streets that are thriving—and we have a plan for that. We will implement a robust industrial strategy, so that business owners can plan and invest with confidence in our communities. We will implement a plan for clean energy, so that by the end of the decade we are saving almost £100 billion for businesses and consumers. We are committed to the reform of business rates. The current unfair system sees high street businesses forking out a third of business rates even though they make up just 15% of the overall economy. We would level the playing field between online retailers and bricks-and-mortar shops by increasing the digital services tax. The retail sector is absolutely crying out for that—indeed, the Retail Jobs Alliance, a coalition of major retailers, is calling for that very policy.

Communities must be put in the driving seat. To put them there, we should support the growth of co-operatives and ensure that communities are given a real stake and say in the development of their town centres. That is why the Labour party is committed to doubling the size of the co-operative sector. Labour city Mayors are also making a difference. For example, the Mayor of London is funding night time enterprise zones, because opening up at night can increase footfall during the day as well. The pilots have been successful.

Labour’s plan would strengthen the high street, because we listen to those who use and make the high street on the need for an industrial strategy, the dignity of retail work and the reform of business rates. We want to see this sustained through co-operatives, assets of community value and the biggest transfer of power the UK has ever seen. I look forward to the Minister’s response to the important issues raised in the debate.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 5:19 pm, 7th December 2022

It is a pleasure to serve with you in the Chair, Mrs Cummins. I congratulate Catherine West on securing this important debate. As I knew she would, she spoke passionately on behalf of her constituents and our high streets.

We all agree about the importance of high streets. As the hon. Lady pointed out, this is not just about our local economy: high streets are crucial to our local communities. On a national scale, the retail sector alone contributes around 4% of UK gross value added and almost 3 million jobs. She referenced the impact of e-commerce, and I agree with the shadow Minister about the need for us to establish and maintain a fair and level playing field—something I have often spoken about in Parliament. I join Navendu Mishra, who called for more action on ensuring a fair and level playing field on taxation.

With 26% of retail sales taking place online, it is important to note that small high street businesses also trade online. That is about innovation but, as my hon. Friend Robbie Moore pointed out, it is consumers and consumer choice that are driving transactions online. We should not dictate to consumers where they shop, but that is nevertheless causing difficulties for our high street. I share the concerns of Taiwo Owatemi about ensuring that we protect our high streets through this revolution—and it is a revolution—but we should not forget that it is consumers driving the revolution, rather than rates or any other issue. These are additional issues for retailers, but the primary issue is the customers in the first place and the footfall through different stores.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

A shop in my high street moved from being just a shop front—an excellent and massive shop it is as well; probably four times the size of this room—to going online. It proved that by going online it could also maintain its presence on the high street. Can we do something to encourage businesses to do both—to have a shop on the high street and to be online?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The hon. Member makes a good point. I was just going to come to his experiences shopping with his family in the physical high street. My family does that too. On Saturday, I was in Malton—one of the towns in my constituency—for Small Business Saturday. I too enjoy the experience of physically going shopping, and Malton is a wonderful example, as it created a new identity for itself as Yorkshire’s food capital. This is the future of high streets: a mixture of hospitality, leisure and retail. Malton has successfully done that, and there are lots of lessons to be learned from it.

Jim Shannon rightly pointed out that there is an opportunity for businesses to be not just a physical or an online retainer, but both or either. It is about the creativity of businesses in meeting their customers’ needs, and that is what we have to facilitate. Of course, there is a multitude of opportunities for employment, from flexibility to the development of new and portable skills. We also need to recognise retail as a rewarding career—something that the Retail Sector Council, which I co-chair, is keen to do.

The high street has struggled with the pandemic, which has caused difficulties. We should pay tribute to the creativity and resilience of businesses and their ability to respond to those challenges; we have all seen examples on our high streets. It is right that part of our mission is to ensure that our high streets and the communities that depend on them receive the investment they need to properly plan and grow for the long term.

The hon. Member for Hornsey and Wood Green talked about the lack of meaningful action from the Government, which is one thing I do not accept. At a local level, we have to ensure that our local authorities have the right plans for infrastructure to drive footfall, and ensure that goods and services flow easily, and businesses and consumers benefit from decent roads, affordable parking and a clean and well-cared for mixed environment. At a national level, the Government are doing much, including through initiatives such as our £4.8 billion levelling-up fund and the future high streets fund. Last year, we published our build back better high streets strategy, which identified many changes we need, and we have already gone a long way towards delivering on that.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

My hon. Friend is right to highlight the potential benefits of wisely spending the levelling-up fund or the towns fund money that is available to local authorities. He may want to note that this has been done very successfully in Ipswich, where I helped to devise a scheme to support local shopping parades, which will see improved parking and many other enhancements. Might we be able to use that as an exemplar of what can be done to support the local high street and improve footfall?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

That is a great example. Through the different councils, we are determined to develop different best practice examples. My hon. Friend points to the leadership in his context, and I urge all colleagues to do the same and be leaders in their communities.

The Government have created a new commercial business and service use class, giving businesses the freedom and flexibility, through class E, to change use without needing planning permission. We are working to make permanent many of the regulatory easements we introduced during the pandemic that not only allowed cafes and restaurants to move the indoors to the outdoors but helped to create vibrant, bustling outdoor spaces. In the Levelling-up and Regeneration Bill, we are committed to going further to support places to tackle blight and revive our high streets, by giving new powers to local authorities to require landlords to rent out long-term vacant commercial premises to prospective tenants.

Rachael Maskell raised the important redevelopment of the Guildhall, which is a fantastic facility. I am sure she knows that the £22 million for that came from His Majesty’s Government’s growth deal and the getting building fund. The Government are doing much in these areas, including in the hospitality strategy and much more.

I will touch on one or two of the points made. Justin Madders was understandably concerned about the closure of bank branches, which we have all experienced in our areas. Banking hubs are part of the solution, which we are supporting, as are post offices. There is a banking agreement that helps our post offices to maintain their profitability.

The hon. Member for Stockport talked about his local post office. Post offices are vital to local communities. The Government provide around £50 million a year in subsidies to ensure post offices are still with us. He also raised the matter of access to cash. Clause 47 of the Financial Services and Markets Bill deals with that, and gives the Financial Conduct Authority new powers to require provision of access to cash where it is disappearing from our high streets.

I will touch on business support thus far. The autumn statement’s £13.6 billion of business rates support has been welcomed right across the sector. It would be irresponsible and undeliverable to commit to simply scrap a tax completely, when it raises £22 billion in England alone, and not to say what it will be replaced with. That tax money has to be replaced by something, and we need to understand exactly what the replacement will be. Our approach is more realistic, reasonable and deliverable, as is the energy bill relief scheme, which is hugely important, as it provides vital support for businesses through to the end of March. We have been clear that there will be further support for some vulnerable sectors. The details of that support will be announced by the end of the year. For retail, I am sure there is a very good case for many of our smaller businesses on our high streets to get extended support.

I want to give the hon. Member for Hornsey and Wood Green time to respond. I thank all Members for their contributions. It is encouraging to see that all sides of the House share a common cause to look after our high streets, and make sure they are still focal points for our local communities.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs) 5:28 pm, 7th December 2022

I thank all the Members who have participated. There is a spot of light in the amendment to the Financial Services and Markets Bill around access to cash. However, the bigger picture does not offer an encouraging outlook: a 16% increase in business insolvencies compared with this month a year ago, and 11% more than in pre-pandemic times. These are troubling times, particularly for small businesses. The loss of jobs is likely to come through the closure of shops, banks and post offices, and the general lack of strategy from the Government. I hope we can have a further debate with a bit more substance to it, perhaps with a strategy from the Minister, not just an amendment to a Bill. I look forward to you being in the Chair for that, Mrs Cummins.

Question put and agreed to.

Resolved,

That this House
has considered employment and the high street.

Sitting adjourned.