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Retail Sector: Unemployment

Volume 809: debated on Wednesday 27 January 2021


Asked by

To ask Her Majesty’s Government what assessment they have made of the impact on unemployment of any decision by the administrators of (1) Debenhams, and (2) Arcadia, not to seek deals which (a) retain staff, and (b) keep stores open; and what steps they are taking to support jobs in the retail sector.

The Government recognise the significant impact that redundancies will have on employees and their families. We have put together a far-reaching package of support for business and the economy, including the Coronavirus Job Retention Scheme, which has supported 81,900 businesses in the wholesale and retail sector, with claims worth over £7.96 billion.

My Lords, the Fashion Retail Academy works with employers to provide young people skills and practical experience to meet the evolving needs of the industry. In normal circumstances, 96% of its students—more than 1,000 a year—go into permanent jobs. Does the Minister agree that the FRA and other national academies play a vital role in supporting youth employment and that the Government should support their sustainability and expansion as part of a strategy to support young people in retail at this critical time?

The noble Lord makes a good point. I know that he has extensive experience in this sector. I am sure that we will want to do all we can to support the kinds of initiatives that he refers to.

My Lords, is not the risk that the demise of vast outlets such as Debenhams will have a domino effect in reducing footfall for other shops? While it would be completely wrong for the Government to rescue retailers that have failed to adapt, there is no reason for all retail to disappear from the high street. Is it not the case that the Government’s own measures against Covid have increased the challenge for viable businesses? Will the Government please consider measures such as extending further the business rates holiday and will they also use their urban regeneration programme to facilitate the conversion of shops to other uses, thus avoiding great black holes in many town centres?

I agree with the noble Lord. It is very important that we try to do all that we can to retain town centres and high streets. They are a vital outlet for many businesses and are well loved by the public. We have the levelling-up fund and the towns fund so we are doing all we can to assist the sector in these very difficult times.

At the Covid-19 Select Committee yesterday, both the Fabian Society and the British Independent Retailers Association gave startling evidence to our inquiry. Both said, quite rightly, that this would disproportionately affect women, who traditionally have held many more roles in the retail sector. Many of these roles are now going towards distribution centres, where, as we know, the gender balance is different. What are the Government measuring in relation to this question and what actions do they plan to take to mitigate the impact on women?

The noble Baroness is correct, sadly. We recognise that many of those losing their jobs in this sector are likely to be younger, low-skilled female workers, hence the importance of higher universal credit payments, the Kickstart programme and JETS, and, from January 2021, the Job Finding Support service. We have temporarily increased universal credit by around £1,000 a year and are doubling the number of work coaches to 27,000 in 2021.

The loss of 200,000 retail jobs is terrible news for many, especially young people. Does the Minister agree that the Government need to take immediate, practical steps to help, such as reducing the rate of VAT on sales from bricks-and-mortar shops and lowering the state pension age to enable many to retire and vacate jobs for younger people?

The noble Lord will understand that I cannot give commitments on VAT and tax changes. They are rightly a matter for the Chancellor. We need to do all we can to assist the sector in these difficult times. I have outlined some of the measures we are taking to support retail. We will continue to do that and will keep all future policies under review to see what we can do to help.

My Lords, if one of the alternative uses is housing, can we ensure that that housing is of the highest standard? Some existing conversions for that purpose have been very poor. Can we also ensure that there will be mixed tenure, with a proper segment for social housing, and that any buildings should fit the existing townscape and not be an excuse for multi-storey conversions?

The noble Lord make some good points but he is tempting me to get into planning matters, which, of course, are not my responsibility. We need to make sure that housing, when it is built, is sustainable and of a proper and appropriate quality.

My Lords, our thoughts are with the staff and their families who are affected by the closures under this deal. Is there a plan, in scope or in contemplation, for our high streets? If so, will the Minister ensure that it includes consideration of business rate levels, planning issues, investment and transport links, training and retraining? He has mentioned some of those but they need to be bound together in a coherent way.

The noble Lord makes a very point. In November, we announced the levelling-up fund, worth £4 billion, for England. This will invest in a broad range of high-value local projects, including upgrading town centres and community infrastructure.

Does the Minister agree that there are not any grounds for the insolvency practitioner to select a purchaser, as implied in the Question asked by my noble friend Lord Rose? The job is to maximise the return to the creditors. Does he also agree that now is the time to revisit the terms of the moratorium that he and I debated, so that time is given to companies such as these to find better solutions?

I enjoyed debating the moratorium with my noble friend—an area in which he has considerable expertise. The moratorium that was introduced is designed to help companies that are financially distressed, and I was very grateful for his recognition of and support for it during the passage of the Corporate Insolvency and Governance Bill. I assure him that the rules for the monitor of the moratorium, who must of course be a licensed insolvency practitioner, will not in any way impede the monitor seeking advice from other restructuring professionals and finding an alternative source of rescue.

My Lords, high-street retailers, their customers and their staff should not be prejudiced by unfair online competition, which is contrary to the public interest. To an extent, the supply chains of online retailers rely on the victims of human trafficking, modern slavery, appalling working conditions and exploitation through low pay. These issues are notoriously prominent among a number of the bigger names in online shopping. This is a scandal that must be stopped.

Like the noble Baroness, I have seen the media reports. One hopes that they will have shamed many of those companies into action, doing what they can to make sure that their supply chains are robust and sustainable and that they do not indulge in the terrible practices that she has outlined.

My Lords, I am speaking from Colne, a smaller town in Lancashire, where most of the high street consists of small, independently owned shops, many of which are in a disastrous situation. We do not want to close down our high street; we want to keep it going and expand it. What are the Government doing to make sure that these small shops, independently owned, will be able to survive and thrive after Covid?

I am delighted to hear that the noble Lord is speaking up for Colne and for many other high streets, because they play a critical role in our smaller towns. We have brought forward £81.5 million from the £3.6 billion towns fund to kick-start local investment projects of the exact kind that he refers to. Of course, we have to accept that we cannot protect every job during this crisis, but we will help people to get through it and help them get back into work at the end of it.

My Lords, I declare an interest as a trustee of the parliamentary pension fund. What action will Her Majesty’s Government take to ensure that the pensions of thousands of redundant employers, who mainly will be female and will have given years of service, will be protected and that these employees will be told exactly what is happening with regard to their pensions?

My noble friend makes a very good point. I appreciate that these will be concerning times for members of these pension schemes, but there are measures in place for these situations. We will ensure that we do everything we can to provide support for those who potentially will be impacted. The Pensions Regulator is working closely with both the company and the scheme to ensure that all prior commitments entered into are fulfilled.

Sitting suspended.