Summary

The BRC team were in Liverpool this week for the annual Labour Party Conference, the first time in fourteen years Labour have met as the governing party. We were out in force to call on the new government to Buy Into Retail - shining a light on the industry’s huge contributions to the economy, society and the environment – and how retail’s scale and reach can help government achieve its goals.

Retail is the Everywhere Economy and if government works with us to shape an enabling policy, regulatory and tax landscape, it can make the most of the industry’s potential to deliver growth, better jobs and a greener future.

Following a fantastic Sunday evening reception to celebrate the industry, we convened a stellar panel of industry leaders and policy experts to explore how the government can ensure that business rates reform – one of its manifesto commitments – encourages retail investment and growth. We were delighted to be joined by the Retail Minister Gareth Thomas, Exchequer Secretary James Murray, a number of backbench MPs – and, of course, plenty of members – for the two events.

We were also delighted to join Usdaw’s fringe, as they launched their new plan for the future of retail and explored the areas government should prioritise to ensure the industry thrives into the future, and Demos and Just Eat for an in-depth discussion on restoring pride in high streets.

Whilst new detail on key policies, from employment rights to Apprenticeship Levy reform, was lacking, perhaps unsurprisingly, it was great to hear Ministerial recognition of retail’s contributions to the UK and the need for closer partnership between government and industry.

Read on for more details.

BRC Events

Buy Into Retail Reception

We kicked off conference with our Buy Into Retail reception on Sunday evening, with members, MPs and faces old and new gathering to celebrate the industry. It was a great opportunity to meet and mingle with new policymakers.

Helen Dickinson, CEO of the BRC, and Simon Roberts, CEO of Sainsbury’s outlined how much retail matters to the UK – from the 5.7m jobs it provides in total to the £100bn it contributes to the economy every year – and how government can grow these contributions by working with industry.

Gareth Thomas, the Retail Minister, said that if government is to succeed in its mission to grow the economy, an “even more successful UK retail industry will be needed.” He outlined some of the issues government has committed to address to make that happen, including reforming business rates and Apprenticeship Levy, tackling retail crime and easing trade frictions.

Whilst the Minister was unable to share more policy detail than what has already been made public in Labour’s manifesto, his comments on better government working with businesses will be welcome – although it remains to be seen how government will turn words into action.

Encouraging Growth Through Business Rates Reform | Fringe Panel Event

Helen was joined by Jo Whitfield (CEO, Matalan), Nick Stowe (CEO, Adena Brands) and Giles Wilkes (Specialist Partner, Flint Global) for a discussion on business rates reform which was adeptly chaired by the Sun’s Business Editor Ashley Armstrong.  

Exchequer Secretary James Murray introduced the session, reiterating Labour’s commitment to replace the business rates system with one which “levels the playing field” but raises the same amount of money within the current envelope.

He added that the government recognises that retail has a role to play, given its reach and scale. But, with retail’s rates impact higher than any other sector, panellists were quick to note that the government should be looking outside retail if it needs to raise additional revenue, addressing how the tax burden falls across sectors and levelling the playing field across the economy instead of drawing arbitrary lines within retail.

James was unable to say much ahead of the Budget but said the Chancellor will set out further details on 30 October. He came back to this point in response to questions from the audience. He did, however, note that government is aware of concerns around the end of the Retail, Hospitality and Leisure Relief next year, and made comments on government plans to tackle retail crime.

Helen set out the disproportionate business tax and rates burden on retail and our headline Budget ask – the introduction of a retail rates corrector (a 20% adjustment to the rates bills of all retail properties to correct the disproportionate burden on retail).

• Retail pays 7.4% of business taxes (£33bn), which is 1.5x its share of the overall economy (5% GDP)
• £33bn equates to 55% of retail’s pre-tax profits. This is highest proportion (alongside hospitality) of all main business sectors.
• 11% of the retail total tax bill is made up of business rates (highest of all sectors)
• The UK lost 6,000 shops over past five years (with two-thirds of closures down to rates) and could lose another 17,000 in the next decade without action on rates

Jo and Nick discussed this burden and shared their experiences of how it has affected their decision making as retail business leaders – in one example where units have been offered rent-free, the rates bill was still so high that it nullified the business case to open a new shop. Their stories – of closed stores and lost investment in people and places, including new stores – will be familiar to many members. Giles spoke to the link between retail and society, in terms of local economic activity but also the provision of secure jobs and a sense of community.

Policy Announcements

We didn’t hear much new detail on government policy at Conference, with Ministers and backbenchers reiterating manifesto commitments.

Discussions on business rates followed the manifesto language to the letter: that the government will replace the current system with one which will “level the playing field between the high street and online giants” whilst “raising the same revenue but in a fairer way.” The new system will also better incentivise investment and tackle vacant properties. It remains to be seen exactly what a “level playing field” looks like in practice, but we anticipate more detail at the Autumn Budget and when the Chancellor publishes her accompanying business tax roadmap.

On retail crime, Home Secretary Yvette Cooper said that street crime is corroding the fabric of communities and outlined government’s mission for safer streets, which will see new powers introduced to tackle antisocial behaviour and shoplifting, 13,000 more neighbourhood police officers and a standalone offence for violence and abuse against retail workers. All these manifesto commitments have been welcomed by retail.

Apprenticeships and skills were hot topics at Conference this year, with several fringe events dedicated to the issues. A little bit of new detail emerged on government plans to turn the Apprenticeship Levy into a Growth and Skills Levy, with news that the latter will include new foundational apprenticeships and funding for apprenticeships which are shorter than 12 months. That was accompanied by the publication of Skills England’s first report, looking at skills shortages. More detail on the Growth and Skills Levy and Skills England’s structure is expected shortly.

Other policy issues which featured in Ministerial speeches and fringe events included the circular economy and resources and waste regulations. The government will establish a Circular Economy Taskforce (this was announced just before Conference but spoken by the Environment Secretary Steve Reed) and Small Ministerial Group to oversee a Circular Economy Strategy.

What Happens Next?

The next big milestones will be the Autumn Budget on 30 October – which will be accompanied by a business tax roadmap and followed by the publication of the Industrial Strategy – and the laying of legislation including the Employment Rights Bill, Crime and Justice Bill and Skills England Bill in Parliament. Once published, we will be scrutinising the detail of legislation and engaging with government and the parliamentary process.

We’re continuing our engagement with the new government on a range of fronts, including direct policy engagement with Secretaries of State, Ministers and SpAds and officials across departments: a steady drumbeat of constituency visits to retailers for MPs (backbenchers and Ministers); Conference follow up meetings; and at our Buy Into Retail Parliamentary Reception on 29 October (contact tom.mccarthy@brc.org.uk for more info).