The high street is facing “annihilation” unless the government acts quickly to save retailers from the impact of threats such as business rates, Labour has warned.
In an opposition debate today (6 June), shadow business secretary Rebecca Long-Bailey, said 21,000 jobs had been put at risk in the first three months of the year alone, with a series of companies, including Maplin, Toys R Us and M&S, laying off staff.
Long-Bailey told the House of Commons that staff and consumers were facing an “onslaught of store closures”, including the decision announced last month by M&S to close 100 stores in the UK. Businesses that were “stalwarts of our high street” were disappearing said Long-Bailey, who accused the government of dragging its feet over a review of business rates.
She said previous attempts to tackle the problems of the high street, such as the launch of ‘Town Teams’ after the Portas Review, had fizzled out as government funding dried up.
“This is a recipe for complete high street annihilation,” she said, adding the impact on staff had “profound implications for families across Britain”.
Responding to the accusation, business secretary Greg Clark claimed the number of firms going into administration had fallen in the past five years compared with the five years before.
He said the high street was in the middle of a “revolution” caused by the shift to online shopping and said the history of the high street had always been full of companies closing, to be replaced by new challenger brands.
“The British retail industry is transforming but it’s always been the case that retailers have failed to be replaced by others,” he said.
“Across the country from time to time business may close but that has long been the case.”
Clark highlighted growth of companies such as Aldi and the Co-op, both of which are undergoing big expansion plans, as evidence the retail industry was still thriving.
He denied the government had failed to act on business rates, adding that the Retail Sector Council, chaired by former Co-Op boss Richard Pennycook, was addressing how business rates could be reformed, alongside a long-running review by the Treasury.
According to the British Retail Consortium, there are nearly 2,500 fewer retail stores in the UK than three years ago. Today it said there had been more than 3,200 retail insolvencies since 2014.
It claimed half of non-food sales could be online by 2030, and up to 40% of food. It also forecast up to a third of retail jobs could disappear by 2025.
“This has already begun to play out but at the same time new jobs are emerging. 100,000 people now work in jobs which didn’t exist five years ago.”
The consortium said it was critical the government acted to remove barriers to allow companies to innovate, and that business rates were still the biggest enemy.
“Retailers alone are responsible for £7bn in business rates annually or a quarter of the total overall. It is critical the changing dynamics of today’s economy are considered so a business taxation system fit for the 21st century is established,” said the BRC spokeswoman.