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Covid-19: High Street Retailers

Volume 804: debated on Thursday 2 July 2020


Asked by

To ask Her Majesty’s Government what assessment they have made of the impact on high street retailers of the COVID-19 pandemic.

My Lords, the global Covid-19 pandemic has resulted in unparalleled falls in retail sales and high street footfall. We have provided unprecedented support to high street businesses. Pubs, shops and hotels will pay no business rates for 12 months. Eligible retail, hospitality and leisure businesses have received cash grants of up to £25,000 and businesses that cannot pay their rent because of coronavirus will be protected from eviction.

My Lords, reports today suggest that more than 6,000 jobs were lost in one day in the retail sector. As we emerge from lockdown, we need a plan to regenerate and save retail jobs on our high streets. What further steps will the Government take, including a revamped city centre revitalisation programme and fiscal measures, to ensure that our high streets can thrive now and into the future?

The noble Baroness is right to highlight the extent of the challenge that we face. On 30 June, the Prime Minister announced a new deal which puts jobs and infrastructure at the centre of the Government’s economic growth strategy. This includes £900 million for a range of shovel-ready local growth projects in England, as well as £96 million to accelerate investment in town centres and high streets through the Towns Fund this year.

My Lords, small avenues of shops close to town centres and in estates have always had a difficult trading environment, but the lockdown has demonstrated their importance to community cohesion. They offer the opportunity to shop locally, a bulwark against panic buying and a promise of normality. In view of these important community assets, what plans do the Government have to protect these assets and enhance them?

My noble friend is absolutely right to highlight the important role that many of these local shops play in our communities. As I said in the previous answer, we have announced £96 million to accelerate investment in town centres through the Towns Fund. This will provide all the towns selected with between £500,000 and £1 million that they can spend on local initiatives to help their areas.

My Lords, I declare an interest in a retail unit in the Royal Avenue, Belfast, and in 10 other town centres in Northern Ireland. The Government are to be congratulated on their furlough scheme, which has been of great assistance to retailers and, consistent with health advice, the reopening of hospitality and shops is welcomed. But can the Minister make it clear to us whether any consideration is being given to the reduction of VAT and, secondly, the return of staff to offices in our town centres in Northern Ireland and the United Kingdom, because that would certainly increase footfall in town centres?

I thank the noble Lord for his supportive comments. He will of course understand that I cannot make any commitments on what the Chancellor may or may not do in his next announcements.

My Lords, in a week that has seen the loss of tens of thousands of jobs, as the noble Baroness, Lady Ritchie, said, to the high street, the Government keep mentioning CBIL and CLBIL schemes, which are clearly welcome. However, a number of large retailers I speak to are being denied access to these funds because of the way that EU state aid rules are being applied. When will the Government get the European Commission to change the way it determines an undertaking of difficulty, so that we can ensure that we do not lose further retailers, employers and jobs on the high street?

The noble Lord raises an important point. The CBIL scheme has been unprecedented and extremely successful. We are aware of difficulties that some companies have in accessing it, for various reasons to do with either problems with the bank or the state aid rules. We are urgently looking at this problem.

High streets were in decline before Covid-19. In fact, the House of Commons report on high streets and town centres last year talked of significant reform in planning and taxation policy, including the options of an online sales tax and reforms to business rates. While the money the Minister has outlined is clearly welcomed and valued, can he assure us that this fundamental, significant work is still being carried on, because this is where the future success of the high street really lies?

The noble Baroness raises an important point. We announced a review of the business rates system, which is ongoing, and I am sure we will have more to say on that shortly.

Retail is facing a complete revolution with the move to online, added to which there is a fear factor among consumers against spending at the moment. Should we not, first, ditch the “Stay at Home” message and get everybody back to work? To take one example, why cannot the beauty sector go back to work? It has 200,000 female employees, and what honestly is the difference between them and hairdressers? Indeed, while we are about it, why not allow physiotherapists to open, too? Does not the Minister think that it is time to trust all retailers, so that they can make the decision to open safely, within the boundaries that we have set?

My noble friend is right to highlight these issues. I can only tell him that we have studied the health advice very carefully: we are following the scientific advice from Public Health England and others. It is our wish to get every sector reopened as soon as possible, but he will understand that we need to do that as safely as possible.

My Lords, some of the hardest hit are small retailers in country and sparsely populated areas, and many of them are in Northern Ireland. What consideration have the Government given to such particular cases of hardship?

We recognise the vital role played by retailers operating in sparsely populated and isolated areas in the UK, including those in Northern Ireland. As I said, they have benefited from cash grants of up to £25,000, for rateable values of between £15,000 and £51,000. Many rural retailers have also benefited from the business rates holiday, and the doubling of the small business rate relief and changes to thresholds, but we keep these matters under constant review.

My Lords, does the Minister agree that we face a fundamental change in behaviour? The survey figures for future use of the high street make grim reading, with data pointing to a near halving of physical visits post pandemic. What plans do the Government have to anticipate this new normal?

The noble Lord is right to highlight the difficulties that many retailers are facing. There has been a big shift to online retailing as well—of course, many high street retailers do both—but we need to keep these matters under review. The high street is vital to many local communities, so we want to offer them as much support as possible.

My Lords, does the Minister agree that a high street business rates system based on open market rental value is no longer fit for purpose? When will the new system be introduced? Will it be in the next financial year, because it is urgently needed?

The terms of reference for the review were published on 11 March in the Budget. On 28 April, the Treasury set out the timelines for the tax policy consultations in the light of the crisis, and the call for evidence for this fundamental review will be published in the coming months.

Does my noble friend agree that shopping locally, not online, helps not just those struggling retail businesses but the environment, by reducing transport emissions and excess packaging?