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Economy: High Street Trade

Volume 771: debated on Tuesday 10 May 2016


Asked by

To ask Her Majesty’s Government whether they have plans to undertake an urgent review into the financial sustainability of high street trade in England and Wales in the light of the growth of online retail and the increase in overhead costs for shops trading on the high street.

My Lords, in asking the Question standing in my name on the Order Paper, I declare an interest in that a member of my family is a retailer.

My Lords, there is no plan to undertake a review in England. In Wales this is a matter for the Welsh Assembly. The Government have taken action. Our high streets will benefit from the £6 billion business rates support package announced by the Chancellor at the Budget. We have also given more than £18 million to fund successful initiatives such as Love Your Local Market and the Great British High Street competition, and announced a digital pilot programme.

I recognise the work that Her Majesty’s Government have done to help retailers. Nevertheless, in essence it amounts to a modest amount of tinkering. Is my noble friend aware that 36 major chains have gone bankrupt, thousands of other retailers have stopped trading and retailers are faced with ever-increasing overheads, declining footfall and increasing competition from online? Against that background, will Her Majesty’s Government review the statement that the Minister has just made and recognise that we need a fairer tax covering both retailers and online trading, and that possibly that means a turnover tax rather than a property tax?

I thank my noble friend for recognising what the Government have done. He talked about various chains going bankrupt and the declining footfall on our high streets. In fact, footfall is now increasing and some high streets have responded very well to the changing patterns of the high street. The ones that have responded well are seeing very good results; for example, in my own town of Altrincham the market has almost completely revitalised the town centre.

The questioner specifically asked about a turnover tax on online trading. What is the Government’s response to that suggestion?

I have outlined the Government’s response to the suggestion, which is that high streets have found numerous ways of responding to the different patterns on our high street. Many chains on the high street are in fact benefiting from things like click and collect.

My Lords, does the Minister agree with me that local councils have done a great deal to help to revive local high streets, which are the centres of communities and particularly important to poorer communities? Have the Government considered giving local authorities, particularly the combined authorities, more powers in revaluing and setting the business rate, as suggested by the London Finance Commission and the City Growth Commission?

First, as the noble Baroness will know, local councils will be able to retain 100% of their business rates by 2020. Combined authorities that also have mayors will have the facility to raise or reduce business rates in their combined authority area. I totally concur with the noble Baroness, because I can think of two local authorities in Greater Manchester where the councils have been absolutely at the forefront of that revitalisation of their local high streets.

My Lords, will the Minister adopt the suggestion of reducing the size of town centres to take into account the fact of online trading and perhaps make some finance available to local authorities to achieve that aim?

The noble Lord makes a good point. One of the things that councils observe is that we need more shoppers in our local high streets and not more shops, hence the expansion into some of the excellent food offers in markets now and some of the conversions from office to residential that help to revitalise the footfall in local high streets, particularly in the north of England where I am.

My Lords, there can be only one of us standing up at any one time. Thank you. We have not heard from the Cross Benches. After hearing from them I suggest that we go to my noble friend Lord Grade.

My Lords, I have been a non-executive director of Booker, the FTSE 250 company, for eight and a half years. When I started our internet sales were £50 million. Today, out of a turnover of £5 billion, they are £1 billion. Surely the answer is to help the high street to take advantage of the internet age. What are the Government doing to help retailers to take advantage of the internet, whether on payments, winning customers or dealing with their suppliers and the supply chain?

The noble Lord is absolutely right that the digital age has in many cases been to the high street’s advantage. I have mentioned click and collect. Our local high street businesses have to compete in the digital era and we have recently announced a digital pilot programme across Gloucestershire working with partners in the private sector including Argos, IBM and Cisco. This work was developed in close collaboration with the BIS retail unit.

Does my noble friend think that there is any connection between the lack of customers in the high street and the tyrannical and punitive parking arrangements that are imposed in our streets that make it impossible to go to the high street and spend money?

My noble friend is absolutely right. The Government have recognised that some of the punitive practices on our high streets have prevented or discouraged people from going shopping on their local high streets and we have done something about it.

Is it not true that online trading is going to grow notwithstanding what might happen in the high streets? Is it not also true that while online trading is welcomed by many people, there are also drawbacks, not the least of these being growth in traffic—white vans are everywhere now—that is creating congestion and poisonous air in the communities? What are the Government going to do to restrain it or at least to make drivers pay for the pollution that they are creating.

My Lords, whether it is the car going with its owner to the shop or the van from the distribution centre going to the home, I am afraid shopping does, in one way or another, create carbon in our atmosphere. The noble Lord is right that online shopping is increasing vastly. The high streets that acknowledge that, and are responding to it and creating different offers, for example leisure opportunities and markets on the high streets, are the ones that are doing well.