To ask Her Majesty’s Government what steps they are taking to support high street retailers and strengthen town centre economies.
My Lords, the Government are determined to see our Great British high streets thriving now and in the future. That is why my department announced that it will launch a call for evidence over the summer looking at the future of the high street. We will establish an expert panel of leaders to draw on their experience and expertise to diagnose the issues currently affecting the health of our high streets and advise on the best approach for their revival.
I thank the Minister for his response.
“An immediate overhaul of the business rates system … needed to salvage the high street”—
those are not my words but those of the expert retailer Bill Grimsey in his report today. Does the Minister agree?
My Lords, first, I welcome Bill Grimsey’s review, which contains many recommendations which the Government will want to study in detail. I do not agree that there is a single silver bullet for the revival of the high street—there are many factors, not least changes in habits as to how people shop and so on—but I accept that there is a need to look at this general area. Indeed, it was in the Conservative Party manifesto at the last election that we committed to looking at this area. It is being driven forward on an international basis at the moment because much of this, in relation to online trading, is an international matter.
Will the Minister confirm that one problem is that high street retailers are having to compete with firms on the internet that do not pay their share of taxes, such as Amazon? Should we not have a level playing field to save our shopping centres?
My Lords, the noble Lord is following up on a point that has been made. As I said, there is provision in our manifesto that we will review this area, and the Treasury is looking at this area on an international basis. Indeed, we are leading the charge because, as the noble Lord will be aware, a lot of that trading is done internationally and we need to ensure that there is the level playing field of which he spoke.
My Lords, is it not true that many commercial landlords are pushing up rents, particularly of shops, because they are taking advantage of the business rate relief scheme, which exempts businesses with a rateable value of under £12,000 a year from paying business rates? They are simply taking away what the public sector would otherwise gain.
My Lords, I would appeal to the noble Lord that, if he has evidence of that, I would be happy to look at it. He is right that we introduced business rate relief on a more pervasive basis after the revaluation so that most small businesses are not paying business rates at all, but my department would be interested to see the evidence to which the noble Lord alluded, if he has it.
My Lords, The Grimsey Review referenced by my noble friend points to a number of non-retail options for the future of town centres. A Centre for Cities report talked about converting shops to accommodation. Can the Minister assure us that the review over the summer will continue to focus on retail shops being available because, for communities to function, they need access to proper retail opportunities and shops? Will the review continue to work on that area, not just on replacing shops with other things?
My Lords, I can confirm to the noble Lord that we intend to do both of those things. We need thriving retail opportunities in the high street, but at the same time we need to recognise that sometimes, particularly in a time of housing need, it is appropriate that we seek opportunities for housing. Some town centres have made successful attempts to revive on the basis of coming together. I think of York in particular, with the Bishy Road. There are many circumstances in which, quite independently of government assistance, which is available in many cases, town centres are thriving, but they are the exception and we need to do more.
My Lords, is it not true that there will be a change on the high street, we have to deal with the reality and we should start planning for it now? Many high streets will be decimated and will not be what we have known in the past. That means that there will have to be investment. Given that we have Brexit coming and we will have freedom on VAT, are the Government, as part of their review, looking to see how they can use changes in VAT rates to ensure that we get the appropriate payments from new traders online?
My Lords, the noble Lord is right about the changing nature of the high street. There is no way, as somebody said to me, that we can stop evolution. These are changes that we have to embrace, but there are many things we can do such as, as the noble Lord hinted, ensuring there is a level playing field. VAT rates are not central to this; the important issue is international action in relation to online activities. The Treasury is seeking here to lead the charge with our partners, both in the EU and more widely.
Does the Minister agree that staying part of the EU gives us a much better chance of grappling with the problems of taxing big multinational companies, because the EU has the collective clout to do that, which we cannot necessarily do on our own?
I do not think that is the case. We need to work with our EU partners, but we are not limited to EU partners, as I have indicated. This is a global issue, which is much wider than simply the EU.
My Lords, the Minister has emphasised the international dimension and the need to co-operate, but does this not make it essential that whatever comes out of Chequers this weekend does not make co-operation with our European partners more difficult?
My Lords, as I have indicated, co-operation with our EU partners is central to this, but it is also wider than that and the Brexit issue. This is something on which we need international co-operation, as noble Lords are aware, and it is important to take it forward on that basis
My Lords, may I ask the noble Lord what is the basis of assessment for business rates of internet companies? Does it differ, and if so in what way, from ordinary high street shops?
My Lords, the basis of business rates is associated with rental values. Therefore, one of the issues is that businesses in a town centre tend to pay higher business rates than those on the outskirts of a town, online shopping or those operating via the internet perhaps with warehouse premises elsewhere. That is the level playing field to which noble Lords refer, which we are committed to in our manifesto and driving forward internationally.