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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 168-ii

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Business, Innovation and Skills Committee

UK Retail Sector

Tuesday 25 June 2013

Fiona Wilson and Stephen Rydzkowski

Martin Blackwell and Sara Scott

Evidence heard in Public Questions 103 - 182

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Oral Evidence

Taken before the Business, Innovation and Skills Committee

on Tuesday 25 June 2013

Members present:

Mr Adrian Bailey (Chair)

Mr Brian Binley

Paul Blomfield

Katy Clark

Caroline Dinenage

Julie Elliott

Rebecca Harris

Ann McKechin

Mr Robin Walker

Nadhim Zahawi

________________

Examination of Witnesses

Witnesses: Fiona Wilson, Head of Research and Economics, and Stephen Rydzkowski, Research Assistant, USDAW (Union of Shop, Distributive and Allied Workers), gave evidence.

Q103 Chair: Good morning, and thank you for agreeing to answer our questions. I will ask you to introduce yourself, just for voice transcription purposes, starting with you, Fiona.

Fiona Wilson: Thank you, Chair. I am Fiona Wilson, Head of Research and Economics at USDAW.

Stephen Rydzkowski: My name is Stephen Rydzkowski. I work in the Research Department at USDAW.

Q104 Chair: Thank you very much. There are only two of you, so we do not have the difficulties that we sometimes have with multiple panel members, but do not feel the need to answer every question if the lead answerer has covered every point that you would want to make. Similarly, if you wish to add or subtract, please feel free to do so.

I am going to start with a very general question, which is an open one. The retail sector covers a wide variety of businesses, from local independent shops to major shopping centres, often in competition with each other. What do you see as the major challenges facing these businesses, and are those challenges the same for both, or are there some that are specific to the different sectors?

Fiona Wilson: Thank you very much. We would say that, across the whole retail industry, it is a mixed picture in terms of the challenges that are facing the industry. We think that there are divisions between food and non­food retail, as well as large and small retailers, and that is a point we would like to make. The food sector is doing reasonably well, whereas the non­food sector does tend to struggle a little. We feel that, overall, it is a growing sector. In the four­week period ending in May this year, £27.1 billion was spent in the retail sector, so it is a growing and profitable sector.

We feel that there are issues challenging the sector, particularly from internet sales. This is felt across the sector, but probably more so in the non­food retail sector. We are very pleased that the Committee is taking a joined­up approach, because whilst there are different issues, it is important not to try to solve more problems in one sector than the other. You cannot resolve a situation by taking bits out; you need to look at a totally holistic approach to retail. The final point I would like to make is that, as the union that represents retail workers and a union that is growing in membership, we believe that in the retail industry the workforce is the greatest asset, and therefore it is very important, from an inquiry point of view, to consider the workforce-their terms and conditions, their pay and, particularly, the skills that they need to keep the sector growing.

Q105 Chair: Do you wish to add anything to that, Stephen?

Stephen Rydzkowski: Only in the sense that, when you look at the non­food sector, it is true that that is the sector that has suffered the most. You have seen the high street casualties that make the news, but you also need to bear in mind that even within that sector, there are some very successful companies that are growing. They may be at the lower end of the market, but there are successes in non­food, as well as not­so­successful companies.

Q106 Mr Binley: May I declare an interest? I used to be a member of USDAW, so it is nice to see you. I worked in the Co­op bank at Wellingborough, so I know of the work you do. That was a long time ago, and I have no reason to believe that that quality has lessened, so it is nice to be talking to you.

You mentioned the word, "holistic"-we see the holistic nature of the problem. In many respects, for the last 40 years, we have driven retail down and, in some cases, out of the high streets. We have driven it down through poor planning. We have driven it down through difficulties with policing and with rateable values. It is a very wide problem. It seems to me that local government, especially, did not recognise the importance early enough and act on that. I think they are changing their attitudes now. Is that view of this holistic nature and of the problems being layered on top of retailers in high streets, in many respects, a fair analysis of the situation?

Fiona Wilson: Yes, I think it is. One of the issues we raised in our evidence was about what local authorities can do in terms of helping the high street specifically. I think that there has been a rush in the past to see car parking as a bit of a cash cow to bring in funding, which is understandable in times of austerity. However, that has stopped the footfall going into town centres, whereas in out­of­town shopping centres, you can park for free. That is an issue we would agree with.

Secondly-and this is being looked at, but I would ask for it to be considered further-we would ask for traders to be supported, with rate support. There has, obviously, been some assistance there, but I think that needs looking at, particularly in times of austerity. Something that is also of concern, and has to be considered, is consumer choice. It is a bit King Canute­ish to say, "We are going to stop this; we are going to stop that. We can plan it out. We will plan not to have out­of­town shopping centres, or to save the high street." To a certain extent, whilst those are models to look at, it is the consumer behaviour that is changing. If we ignore that change and try to bring it back by making measures to stop that change, I think that is likely to be unsuccessful.

Q107 Mr Binley: I have one final point. The fact that we put ring roads around our town has also not helped, because they are almost seen as a barrier. The lack of transport in town centres is seen as a barrier, particularly for the elderly coming into town to do their shopping. It is not easy, and it is that whole problem-that breadth of problem-that we need to be dealing with, is it not?

Fiona Wilson: That is a very important point, particularly if you look at car ownership. If you look at statistics for the amount of petrol sold at petrol forecourts, it has come down significantly in the last number of quarters. It is possibly a dangerous generalisation, but I would argue that that is because people are using their cars less, because they are concerned about getting around and about. Elderly people, people with disabilities and young families do not always have access to the transport that can get them to out­of­town shopping centres, and that is an opportunity for the high street.

Q108 Chair: You touched on my next question, and commented that there are still some very successful retailers, even in a difficult market and a different situation. I was going to ask: to what extent can closures be explained by changes in a business model, or by high cost and lower demand? Just to reinforce that point, I was very interested to read the Asda income tracker that has recently been published, which showed that, in most areas, retail spending is holding up. The area where there does seem to be a problem is white-goods trading, and that seems to be reflected in the performance of some of the companies. What is your perspective on the current market conditions and the differential impact it is having on different retailers?

Fiona Wilson: Current market conditions in retail are generally good. If you look at the last quarter sales figures for the Office for National Statistics, they are showing improvements in those figures. We tend to monitor closures all the time. Woolworths was a big closure, affecting a lot of our members, and it seems to be quite cyclical. For retailers, Christmas is their golden few months to get the funding in, and after Christmas the first­quarter rent is often due. That is often a time when we see business failures. In respect of those business failures, you can look at a range of different things. Some of them did not have a business model that was going to help to support them going forward. Consumers decided that they did not want to shop there anymore, because the offer there was not meeting current shopper demands. Secondly, to support that, if you look at multichannel retailers-those retailers who operate high street, internet and click and collect, where the opportunities are there to sell more products when the consumer goes to collect their goods-those retailers are doing very well.

It is a combination of things. It is the business model that has failed for some retailers, but the other points have already been made in answers about rents, rates and car parking charges. Those are an issue as well. Looking specifically at rentals, a lot of landlords are charging rents and thinking that they can go up in line with inflation or more. Those rents were set three, four or five years ago, when the economic situation was much different. We have seen with some closures, such as Blacks, a deal done with the landlords to enable the company to continue trading at a lesser rent. I suppose, from a landlord’s point of view, some rent is better than no rent and an empty shop. It is a combination of poor business models; multi­trading in terms of the internet, which I think we would like to expand a bit more on; and, also, the high costs of rents and rates that has put the nail in the coffin of struggling retailers.

Q109 Mr Walker: Just following up on your point about rent-which I think is absolutely right; I think there is a big gap between the expectations of some landlords and the reality of what retail is capable of generating-something that has been tried, particularly in America, is to have rents that are related to turnover. Do you think that that is something that UK commercial property ought to be looking at, in order to create a more sustainable environment for retail?

Fiona Wilson: That would be a very good idea, because then it is relating back to the actual trading of the company itself, rather than a rent that used to be appropriate five or six years ago when the economic situation was different. It is certainly something we would say is worth looking at.

Stephen Rydzkowski: I echo that. One of the examples that I was thinking of, which would fit in with that, was when Thorntons came to renegotiate its rent for shops. I think it went up quite substantially when its trade was clearly sinking. The outcome was that it shut down one in three of its establishments, as a way of coping with the total rent increase. If it was based on turnover, it may well have kept open more than it did.

Q110 Nadhim Zahawi: Of course, just to follow up on that question, the success of airport retailing was attributed to rents being linked to turnover. The start of the airports being transformed into retail venues was based on attracting retailers on turnover, because no one really knew what to base the rent at in the first place. Do you think there is a problem around pension funds as well? On their books, the asset value is linked to the yield, and therefore they will hold out for the higher rent, because otherwise they would have to devalue their asset base. Is there any feedback on that from your members at all?

Fiona Wilson: I do not have anything I can think of. I can see why that would be an issue, from an understanding of how pension funds work. Clearly, if you devalue the assets of the pension fund, you create difficulties going forward for the actuarial valuation that takes place every three years. I can absolutely see that as an issue, but I have no evidence to bring to you to support whether that is a problem or not. I would expect that it would be.

Q111 Nadhim Zahawi: Thank you for that. There are now several initiatives to help retail on the high street. We have got, obviously, the Portas pilots. We have the Town Team Partners and the BIDs, as well as the High Street Forum. Which of these do you believe is the most successful?

Fiona Wilson: In terms of the Portas pilots, our concern about those would be that it is reported that the funding is not getting through to the actual areas themselves, so I would say that my concern about Portas pilots would be that the money does not seem to be getting to where it should be. There were 28 recommendations in the Portas report, a number of which we have touched on in terms of such issues as rents and rates. We generally say that more needs to be done to implement the Portas pilots, particularly in the actual locales where pilot schemes are taking place.

In terms of the other two initiatives you mentioned, I have no practical experience of those from a union point of view. However, from a consumer point of view, those initiatives are being successful around where I live. I live in Macclesfield, in Cheshire, and we have a very good treacle market once a month on a Sunday. It is very, very popular indeed. Local traders and farmers, etc. come in to sell home­produced stuff. Those do seem to be bringing footfall into the town centre.

Stephen Rydzkowski: I can add one more to your list: the Totally Locally project, which has actually been funded by some local government money. Again, I am from Leek, which is near Macclesfield. Some 28 market towns signed up to this, which is being added to as the year unfolds. It is based on getting local produce into local shops, and you have the sticker that says, "We are Totally Locally", and it is quite successful. The point I would want to make is that whatever is on your list, and whatever I add to your list, there really is not one size that fits all. This Totally Locally project is great for my hometown and for the others that have signed up for it. I now live in Warrington. It would not necessarily be as successful there, because that is a town of 250,000. It is still a town, but it is a lot bigger than the other town, which has got 14,000.

Fiona Wilson: If I could add to that, if you look at Manchester and Stockport, there are also initiatives going on in terms of getting people to come into the town centres. Manchester is not really a place that has difficulty getting footfall; it is always rammed. If you know the area, it is always very, very busy, whereas Stockport is just down the road from Manchester, so you can see why people would want to go to Manchester. What Stockport has done-supporting the point Stephen was making about looking individually at the issues-is initiatives on car parking: reducing car parking charges and making car parking nearer to the town centre cheaper. That has worked, and if you look at the two initiatives, it is about looking at what is around you as well. I live in Macclesfield. Manchester is not that far away, and you can get into town very quickly, so the Macclesfield offer has to be something very different. I know we are being very parochial now, and we can talk from our own personal experience in terms of these initiatives, but we do not, as a union, get involved in those. I hope that helps the Committee

Q112 Nadhim Zahawi: It is very helpful. I think what you are saying is that, by having variety, you encourage innovation, and that there is no "one size fits all", and those are important messages for this Committee. However, let me play devil’s advocate for a second, if I may. Is there a danger that when you have got so many initiatives, they are really tinkering around the edges and confusing retailers by their very number and, obviously, diluting the level of their impact? Of course, it is great to have innovation, but are we in danger of just having a long laundry list of stuff that all absorbs a lot of resource, energy and time, but none of it is in any way strategic?

Stephen Rydzkowski: That is where the role of the local council comes into place. I support the Warrington local economy council, and it will be up to us to do the hard work with that list that you will have. The council and the councillors will know their town-Stockport, or wherever-and will know what is likely to be the most appropriate.

Q113 Nadhim Zahawi: You think people in local government have the know­how.

Stephen Rydzkowski: I do.

Q114 Nadhim Zahawi: Would it be better using, for example, the LEP-the local enterprise partnership?

Stephen Rydzkowski: We have only had three meetings, but what surprised me was that I was well impressed with how tuned in it is to the local economy and what is most relevant, and the ideas that it actually has about going to get projects financed. One of our projects is revitalising the high street. We are not just talking about a high street with shops; it is a mixed high street, which is attempting to bring back residents and getting people into the high street in the evening. If you are just focusing on retailing in revitalising the high street, you are not going to do it.

Fiona Wilson: Can I just add a further point to that? I think that where the Committee’s inquiry could also be very useful is to look at options and best practice. There is a whole range of initiatives, but there is a whole range of challenges. I think the attitude you are taking of looking at it very much in the round is the best way forward.

Q115 Nadhim Zahawi: On that point-just to finish off on this question-in what ways do your members benefit from these things? Could you, for example, come back to this Committee and say, "Out of the plethora of initiatives, we have got some concentration around these, and therefore it looks like these are the good ones?" Could you provide that sort of information, in terms of best practice?

Fiona Wilson: We would need to source that information, but there is no reason why we cannot do so.

Nadhim Zahawi: That would be very useful for us.

Fiona Wilson: We have not got it available now, but I would be happy to go and gather that for you.

Nadhim Zahawi: That would be incredibly useful for us.

Fiona Wilson: There would be a time scale on that, of course.

Q116 Mr Binley: May I congratulate you, as someone who spent 12 years on Northamptonshire county council? It is a bumpy ride, so I wish you well with it, but I am delighted to see your expertise is able to be applied to this issue. You are right: you cannot solve this problem nationally. You have got to give the responsibility to local authorities to pick and mix, to use a retail term-that is the truth of the matter. You also, at local authority level, have to recognise that there is a real opportunity for bringing smaller retailers in and giving them a new business opportunity. The problem is that, in many of our town centres, the units we built were very large units. It is a problem that local government can deal with that cannot be dealt with by a national initiative. Do you think that ought to be one of the thrusts of the report? I do not wish to guide the Chairman too much, but I wonder if that ought to be one of the thrusts-that we really have got to trust localism in this respect.

Stephen Rydzkowski: I would agree. To come back to Warrington, one of our casualties, unfortunately, was TJ Hughes. It had a massive department store in the centre of Warrington, and it has been derelict-empty. Do not ask me what it is being converted into, because I do not know, but there is work going on. It is being reclaimed. I think it is going to be residential, but the point is what you are saying. When there is a town centre casualty-and they are normally the big casualties-you have got big, empty buildings. What to do with them is probably best left to local people to decide.

Q117 Nadhim Zahawi: You mentioned the fact that only 7% of the £10 million from the Government fund set up in 2012 to help bring empty shops back into use has been spent. Why do you think that 93% of that money has not yet been spent, and whose fault do you think that is?

Stephen Rydzkowski: As far as I am aware, it is to do with the types of projects. They take such a long time to plan and to get ready to apply for the money. The Portas review is not something that we deal with daily in our work; we just know from the papers that the money is not getting through. As for where the blame lies, I would say it is possibly to do with the lack of projects that have been totally designed yet. I do not know whether we are in a state where the other money will be released, but it has taken 18 months or two years, and there is nothing to me that suggests there is suddenly going to be a release of money.

Q118 Chair: Could I just probe you a little on this? There was a bidding process, and I would assume that those local authorities that submitted bids would have had to demonstrate that they could use the money effectively. Is the problem with the delivery mechanism, or is it maybe that the local authorities have not been able to deliver on the plans that they submitted in order to win the bids? Have you any views on this?

Fiona Wilson: I do not really think we have any evidence to support or deny the questions you have asked. It is not something in which we have a massive area of expertise.

Q119 Chair: I know that I read somewhere-and I would not wish to identify the town-that having won a bid, the local councillors basically could not agree how the money was being spent.

Fiona Wilson: If I perhaps can try to help a little bit, Stockport is one of the Portas pilots, and I mentioned earlier that it did something on parking. One possible issue may well be that there are 28 different initiatives in the whole of the pilot, so there is a lot of pick and mix to choose from. Maybe there are issues where people have different opinions on what is going to work. That is a personal opinion.

Q120 Ann McKechin: You both touched on the problem of empty shops, and one of your recommendations is that there should be an empty shops initiative, using vacant and boarded­up shops for community and charity interests. I just wondered if you could perhaps flesh that idea out a bit further-about what you think it would actually mean in different places in the country.

Stephen Rydzkowski: One of the market towns that I am in is developing that pop­up shop idea, which I think is a really good idea that brings life and vitality to the high street, even if it is only for short bursts of time. That is one of the areas we would like to see developed.

Q121 Ann McKechin: That may be a temporary solution when landlords still anticipate that they will be able to rent the property out within a reasonable time to a permanent tenant. You actually mentioned an example of a major department store closing. Many towns have had a similar experience, where a key store has disappeared and the opportunity to get something of a similar size is just not really feasible. Do you consider, then, that people really need to look at different solutions, rather than this kind of temporary let?

Stephen Rydzkowski: That is right. That was what I was saying. That big store will not return as a big retail store. It will either be sublet to a number of smaller stores, or with concessions in an overall framework, it may be converted completely into residential living space, or it may be turned into a community theatre. Certainly with something on that scale, you cannot replace a big retailer with a big retailer. We tried in Warrington; unfortunately, the bombing took place outside Boots, and the big Boots store was left empty for many, many years. We have now managed to get it back into some sort of retail use.

Q122 Ann McKechin: Can I just ask, perhaps, one supplementary question on this empty shops initiative? I think many local authorities have tried to introduce these types of measures-pop­up shops or charity shops. I have got local traders in some areas in my constituency who complain about the sheer volume of charity shops and their ratio to commercial premises. Because those shops do not pay the same level of business taxes, they believe they are actually undercut in terms of their ability to market.

Stephen Rydzkowski: That is a really important area. I started looking at this issue of business rates, because I thought "Why have so many charity shops opened?" Part of it is on rates. As far as I am aware, they do not pay any, or they are certainly much, much reduced. There you have something that the Committee possibly needs to look at, because it is skewing the mix of the high street. It is almost like it is not a level playing field. This is not getting at charities, obviously, but I would certainly say that it is an issue.

Q123 Ann McKechin: One of your other proposals was for an empty retail property law-an unoccupied retail properties law-to help the retail sector. How would this actually work in practice? The problem is, then, to try to go through potentially hundreds of thousands of retail units to try to assess what a reasonable rent is.

Stephen Rydzkowski: As far as I am aware, you do not pay rates for three months on empty retail properties. Actually to pass a new law, it might be that we need to go the other way around and think about removing some reliefs, as a push. For example, rather than three months, make it one month, and then they will think, "Oh, crikey, in four weeks’ time we are going to be paying rates, so we have got to do something". Again, I am not au fait on taxation, but there is the question of whether empty retail properties count against your tax, and stuff like that. There are areas that you might need to consider, which you can use as little sticks.

Q124 Ann McKechin: Would this be primarily at the local authority level in terms of business taxes.

Stephen Rydzkowski: Yes, it would be primarily local, but there might be scope nationally. I do not know. You might need to have a look at both areas. It is just one range of things. It will not solve anything, but it might help.

Q125 Chair: Could I just raise an issue that has been brought to my attention? The head lessee of a row of shops in a particular shopping centre leased one of the shops to a major national multiple retailer, promptly putting the turnover of other shops there in jeopardy, and basically forcing them out of business. Because they are locked into leasing agreements, they obviously sustained a certain level of overheads against a substantial drop in turnover. They are in danger of going out, and you could have one successful major multiple, but a whole row of empty shops. Are there any changes to either leasehold reform or taxation that you think might discourage that sort of situation?

Stephen Rydzkowski: It is a tough one, isn’t it? When something like that happens, it fundamentally changes the situation of the original terms and conditions of the lease. That is what I would say, and I have seen it argued at local level that, because something like that has happened, they should be able to renegotiate. That might be something you may need to consider, because it is such a fundamental change when something like that drops on your trade. By the same token, I have seen it happen the other way when a major unit collapses and all the local businesses that supported it-which have been on the same leasehold and rental agreements-see their trade suddenly disappear, for completely different reasons. It is not just when a major multiple arrives; it is when something big happens the other way. If and when you do come to look at it, you need to look at both sides of the picture. It is such a fundamental change that there are certainly moral grounds for looking at it. Whether it needs to be any further, I do not know, but I would think there is an argument.

Q126 Paul Blomfield: Fiona, in your opening comments, you talked about the workforce being the greatest asset to the retail sector, and I am sure that is right. You also talked about the importance of skills. I wonder if you could develop that a little bit further, in terms of what you see the skills training needs of the sector to be, how far we are looking at those being addressed generically through general education, and how far there is a sector­specific approach. I am conscious that the British Retail Consortium, in its evidence to us, talked about the problems being soft skills, interpersonal skills, STEM subjects and IT skills. I wondered what your thoughts were on that.

Fiona Wilson: Retail is an entry­level occupation for significant numbers of workers, but it is also an occupation that people progress through. It is often a case of starting on the shop floor and working your way up. That is a very common pattern for employment and skills within retail. We want to talk about apprentices, which I will hand over to Stephen for, because he has got greater knowledge on that than I have. What we do as a union is important, in that we develop our lifelong learning work. We have funds from BIS through the Union Learning Fund, and we support our members to pick up some of the skills you have talked about. We support our members: more than 7,000 of our members last year had some skills training, such as Skills for Life courses, IT courses, literacy and numeracy levels 1 and 2, and accessing National Vocational Qualifications 2 and 3. We work jointly with employers. There are lots of situations where there are Union Learning reps, and those reps work with the employers there through formal agreements to help to skill workers who are already there. We find that the Union Learning Fund is exceptionally valuable from a joint point of view, in terms of giving workers who are already in that employment the skills to continue to work and develop themselves.

Apprenticeships are worth talking about, because obviously that is an entry­level qualification. There are some very good examples of apprenticeships in retail, but I will hand over to Stephen to cover those.

Stephen Rydzkowski: I will, in one second, but because I do think it so important, I just want to echo and stress that. I go to courses and speak to people about apprenticeships, and it is like they have become the new university degree. Everyone says, "Apprenticeships, apprenticeships; they’re wonderful, they’re wonderful." People forget this other work that is important in the workplace about up­skilling the workforce that is short of apprenticeship level. That is the sort of thing that the employers are so willing to join in with, because it is a real step forward.

You are talking about retailing, and the other thing that gets to me is that when we talk about apprenticeships, we always seem to be talking about the Rolls­Royce apprenticeship and the craft apprenticeship, and saying, "This is what it has got to be about." They forget that retailing is a low­skilled, low­paying sector of the economy, and getting to what Fiona has been talking about is a major, major step forward for some of our members. They are never going to be a Rolls­Royce engineer, but some of them have got IT skills that they did not have when they left school; they have NVQs at levels 2 and 3, and I cannot stress how important the Lifelong Learning reps are and what a good job they do throughout the union movement.

On apprenticeships in retailing, surprisingly, you might find, it is one of the fastest growing sectors in terms of apprenticeship numbers. People do not seem to think about this or seem to be aware of this. All our major companies now operate apprenticeship schemes. We do not normally mention companies, but we will talk about the Co­op group, for example. That is a really interesting example, because that is an area where there is a range of apprenticeships throughout the sector. You have got retail apprentices; you have got clerical apprentices; you have got motor mechanic apprentices; and you have even got apprenticeships in the farming industry. Again, people do not think about this sort of thing, but it is a major, major employer of apprenticeships. One of the ones I would particularly mention is Lincoln Co­op. Again, people think these apprenticeships are short: "Oh, they are not proper apprenticeships. They are six months." That has gone now. Statutorily, they have to be 12 months, and most of the Co­op’s are upwards of 18 months or two years.

Q127 Paul Blomfield: What level are you talking about for the Co­op apprenticeships? Are you talking about level 2, level 3, or beyond?

Stephen Rydzkowski: I am talking about both 2 and 3. That is the other thing: a lot of these are level 2, but we push for level 3, and the aim is to push further on. Going back to what I was saying, you have to think about where these workers are coming from, and to get to level 2 is a heck of an achievement, but it is only the start of a journey. If we can get them there and then get them to level 3, it becomes a matter of, "If we have got them to level 3, can we get them further-to level 4?" It is about establishing the culture. If you can do that-and this is what the Union Learning reps do-you have started the progress towards something.

I just want to finish with the Co­op, because it does actually-and this is quite good-try to take apprentices from all different types of people who apply for them. There is the example of a woman who applied to do one in the clothing business, but she was disabled. She had lost her lower arm, and they managed to get her on to a pharmacy apprenticeship. Again, not only are apprenticeships really important, but if you can take them down areas like that, you can open up even more doors to not just low­paid people, but disabled people and so on.

Q128 Paul Blomfield: You are right that the situation is changing, but I think you would also recognise that some retail apprenticeships-and this is something we have expressed a concern about as a Committee-have actually given the apprenticeship brand quite a bad name. Some employers have passed off fairly limited in­house training as an apprenticeship. That clearly is changing, but I wonder if you think there is enough ambition within the sector for apprenticeships? When we looked at the area as a Committee, we were conscious that, in Germany, level 3 is the norm in retail. We almost talk down expectations in retail.

Fiona Wilson: There is an issue with apprenticeships generally that the Committee might want to look into, and that is the actual careers advisory service, in terms of recommending apprenticeships to children who are at school. I was having a different conversation on a different issue with somebody at the weekend about the fact that because of the way schools are measured on their key performance indicators, they are looking at things like going to university.

Chair: If I can just intervene, one of our recommendations in our report on apprenticeships said just that.

Paul Blomfield: It said precisely that.

Fiona Wilson: I agree with you, then. I think that is an important point. Did you want to add to that?

Stephen Rydzkowski: No, I am just agreeing with you.

Q129 Paul Blomfield: Let me just pursue the question a little bit, then, and look at how the changes-you have mentioned the impact of internet shopping-affect training needs, in particular. I am conscious that if more people are buying on the internet, the high street shopping experience has got to offer something more. Probably, that is about product knowledge, and that is a feature of German retail. When I talk about level 3 apprenticeships, it is not simply about customer service, although that is clearly important, but actually being able to help customers to navigate choice by offering more than you can get online. Do you think that is an issue?

Fiona Wilson: I think that is a very important issue. If you look at the trading figures to do with internet retailing, and you look at the multichannel retailing, the businesses that perform really well are the ones that have both a click-and-collect service and a high street presence. When customers then go to collect their goods from the store they have ordered them from, there is a fantastic opportunity for good customer service to sell even further products. It is a way in which you can embrace the internet-retail issue and help that to reflect back in a positive way on to the high street.

If you look at performance with click and collect, there are areas that have been very successful, and it takes me back to the point I made at the beginning about the value of the retail workforce for retail itself. A recent report produced by the Retail Trust looks at the multichannel experience. It says that staff have to be the customer interface. An engaged workforce is vital, and good employers are moving away from a "tell" attitude towards an "involvement" attitude. Those who feel involved are happier in their roles and deliver better customer service. Employers need to recognise that better customer service and better training is needed. It is not just a "Ring it through the till; put it in a carrier bag" issue; it is making sure that people have the product knowledge and skills to enable them to have a more fulfilling job. It is about making sure that people have a better experience at work from the employee’s point of view. That is very well worth looking at, because customer service can actually improve the high street sales through the multichannel avenue.

Stephen Rydzkowski: As well as all that, there is a different skill needed, is there not? I am buying things online, and there is the "Ask the Question" feature, so you are asking a question and someone has got to respond instantly with the product knowledge. It is totally different from being in a shop. It is a different type of skill.

Q130 Paul Blomfield: Do you not need that in a shop, too? Even more so, actually, because you need to have a reason for going to the high street if you can buy online.

Stephen Rydzkowski: Everybody’s experience of shopping is different. The thing is that the person who is dealing with you online has to know the product to a much greater degree.

Fiona Wilson: If I could make a supplementary comment on that, one of the issues that retailers are concerned about is that people do what is called "showrooming"-they go to the stores, have a little look around to see what product they want, and then buy it on the bus on the way home on their mobile phone. Not all internet selling starts with you sitting at your computer and deciding what you want; perhaps in the middle of the process, you might go and have a quick look at the product that is there. Good sales support, and good skilling and training of the workers who are there, will hopefully ensure that greater sales can be achieved from that particular location, rather than people going home on the bus and ordering it on the internet. You have got to be in to have your delivery. It is not the panacea: someone has to collect your delivery for you, and that is not always possible when everyone is working 24/7.

Paul Blomfield: Tell me about it.

Fiona Wilson: I speak from personal experience. You can tell, can’t you?

Paul Blomfield: Me too.

Q131 Katy Clark: Whose role do you think it is to ensure that these new skills are acquired? Do you think it is primarily the Government’s job, the employer’s job, or the unions’ job? Who do you think are the people who have to be driving this?

Fiona Wilson: It has to be driven by all three people you are talking about. It is so important to make sure that people have the skills they need to do the job. There really is an approach for everybody here. We have talked a bit about the work we are doing from a Union Learning point of view, and that has been very successful for us in supporting our members, particularly so if there are redundancies when retailers close and members lose their jobs. Skilled workers find other work far more quickly, so I think that the union definitely has a role in that, and we very much enjoy doing it. We find a great deal of support from our members who want to be Union Learning reps because they want to help their colleagues at work.

I think the employer also has a role to play, because they need to be clear in identifying the skills that they need, and a working­together approach is always very beneficial in the workplace. If both employers and employees work together through the Union Learning Fund or a Lifelong Learning Centre, the employees see that their employer is supporting that. There is also a role for the Government, in terms of making sure that the playing field is level and that the standards are there, and helping to identify and support ways to seek to achieve a higher standard for apprenticeships-that is what we have just been talking about-to help people raise the bar a little and focus on upskilling people.

Q132 Katy Clark: Are we rising to the challenge at the moment? Are we getting it right? What needs to be done and who needs to be doing that? Is there anything in particular that the Government need to do?

Fiona Wilson: The Government need very much to continue with the Union Learning Fund. That has been an absolutely major development in terms of supporting trade union learning in the workplace. It is beneficial to both workers and employers going forward, so the key point I would make is how valuable Union Learning is. I should perhaps state an interest: I am on the Union Learning board, as a member of the TUC General Council, so I do see first hand how beneficial that is and how much unions and employers work together, not just within USDAW, but for a range of other unions. That is the first thing that the Government can do.

The second thing that the Government can do is to encourage retailers to focus on multi-skills. I think sometimes retailers want to focus on how we do it here-"This is the way we do it in this company"-rather than thinking a bit more outside the box and about helping someone to get a transferrable skill. Again, it is about encouraging people to strive to improve the standards of entry­level qualifications.

Stephen Rydzkowski: The standards part is one thing that I would say is really important. There has been bad press about apprenticeships in retailing, and there were times when they were being rammed through at six months and so on. The standard has been raised now, because it is legally 12 months. We may need to keep looking at that and have the Government focus on quality. One other thing is that there may even be some sort of further push towards national recognition of apprenticeships, and maybe something like UCAS. When you apply to university, there is UCAS; there could be something similar for an apprenticeship. I know there is NAS, but maybe there is some possibility of linking the two so that whether you are applying for a degree or an apprenticeship, it is the same sort of organisation, really to give it the status that it might not have at the moment.

Q133 Chair: Just before you ask your next question, Katy, could I just raise the issue of engagement with schools? Fiona, you touched on this. I think that it is fair to say, historically, that retailing has been looked at as an opportunity for less­qualified students to be employed. Actually, the nature of retailing is becoming so sophisticated now that I believe there is an unmet demand for students with STEM subjects. Certainly, when I go into some shops-especially those dealing in more high­tech products-you need to have shop operatives who really know their stuff. What do you feel needs to be done to recruit the right sort of people?

Fiona Wilson: Retail really needs to upsell itself, because there are far more opportunities in retail across the whole of the picture. If you look at the retail workforce, which is worth doing, it is very diverse. There is a very significant percentage of women working there-it is about 60% female. It is dominated by part­time working. To a certain extent, the demography of retail workers reflects back on the workforce that goes in there. If you want a full­time job, you would not necessarily look at retail. A lot of it is part­time work, and you have to get underneath the demography of retail workers to see how you can actually change that.

People will go into retail as young workers, maybe because they are encouraged to do that by the school because it does not perceive that there is anything else for them to do. Also, lots of young workers working in retail are at university, funding themselves to study, and they often then go on to become managers and work up through the retail structure. A point I would make about this is that upskilling is important because of the nature of people coming into retail, but of course there is a big, significant decline in young people at the moment. The development of young workers over the next number of years is going to start to decline. Retailers need to think about how they are going to respond to that.

We have made a number of points already. There is the issue about careers advisers seeing retail as being a place to work, perhaps linking in with having a clearing system for apprentices and things like that, but also recognising that the work that is available in retail often dictates the people who seek to work in retail. It is all about flexible working; it is often something where, if you have got a caring responsibility like a family, it is the ideal work for you. If you are a student seeing yourself through university, it is the ideal work for you. It needs to be dug underneath a little bit to have a look at the type of workforce and see how that can then be sold going forward. Does that make sense?

Stephen Rydzkowski: Also, if you are talking about the selling at the school, just sticking to apprenticeships, schools want you to stay on to the sixth form, so they are not going to give fair and impartial advice there. They want you to go to university from their school, because that looks really good for them. Apprenticeships are then pushed back.

Chair: I understand the point, because it is one that our Committee has deliberated on for some time, and I bang on about it considerably. However, I do want to slightly refocus, because obviously the skills agenda is part and parcel of this issue, but it is not, perhaps, the central part of it.

Q134 Katy Clark: We have already spoken about online and mobile shopping. What opportunities do you see in the development of that sector, particularly in relation to job creation?

Fiona Wilson: It is really going back to the multichannel issue, and about encouraging employers and small businesses, and maybe even collectives, to think about having a multichannel approach, so that there are then opportunities to develop the high street through that. That is one area that we think is important, so that the shopper is brought to the high street to purchase their goods, and then they are dealt with by a skilled worker, who is familiar with the products and perhaps can help them choose something else that they might find they need when they get there.

Stephen Rydzkowski: There is also an added spin-off. I know one major high street clothing retailer has just built a purpose­built distribution depot that is going to be purely dealing with the online part of its business, and it has created 400 jobs. That is not on the high street, but it is a spin­off.

Fiona Wilson: A number of retailers have what they call "dark stores"-they are like stores, but it is where they do the picking to provide online sales. All the major supermarkets now have online sales, and that is a growing area. It is more distribution centre work, but it is a growing area, and job creation is taking place.

Q135 Katy Clark: How do the skills for those kinds of jobs differ from the more traditional retail sector? What do those jobs involve, and how do we ensure that people have the skills to do them?

Fiona Wilson: Those sorts of jobs are more about picking work-the product knowledge to know where the things are, the physical ability to shift stuff and that sort of thing. It is a question of identifying, through the careers advisory service at schools, people who feel that works for them.

Chair: Thank you. Can I bring in Robin Walker? We have actually poached some of your issues, but I am sure you can find some new angles.

Mr Walker: I have plenty of other things to pick up on. Fiona illustrated very well the point about school leavers being traditionally a feeder of the retail industry. It has also provided, as Stephen pointed out, a lot of opportunities for people with disabilities to work. Do you think there is any conflict between the drive towards quality in customer service and the traditional position of the industry as being a very, very inclusive employer? Do you think, in our skills policy as a Government, we should be deliberately trying to protect that status as a very inclusive employer?

Fiona Wilson: Again, I think it does go back to the type of work that is available. Retail is predominantly part­time, so it is going to be people who are looking for part­time work who seek to work in retail, and that is a very important point that we need to keep sight of. In terms of the skills that are available and the time available to learn those skills, people will be juggling work with other responsibilities. That has got to be borne in mind. Young workers often work in retail as a way to pursue going on to management traineeships and things like that, and have their first experience with retail from a training point of view. Those are points we have covered already, really, so I do not think I am helping by taking that any further on.

Q136 Mr Walker: Particularly on the employment of people with disabilities, where retail has performed very strongly to date, have you got any figures as to whether that trend is continuing, improving, or declining? Do you have any views on that?

Stephen Rydzkowski: We have not got any actual figures.

Fiona Wilson: Would you like us to get some?

Mr Walker: If there are any available, they would be very interesting to see.

Fiona Wilson: Anecdotally, I am aware of a number of schemes that the supermarkets offer, where they do support people with disabilities to work in retail. I would be happy to do a quick questionnaire among the people we deal with who negotiate with those companies, gather together some data, and then send that in for you.

Mr Walker: I think that would be really interesting to the Committee.

Chair: That would be very helpful, yes.

Stephen Rydzkowski: You do come across these examples of people applying for certain jobs and not getting what they initially wanted, but then the company explores other avenues. If every company adopted that approach, that would help to push it forward, without any shadow of a doubt.

Fiona Wilson: We will get some data and come back to you.

Q137 Mr Walker: You mentioned the importance of flexibility in working and the fact that many people work in the industry because of that flexibility it offers. I had a retail summit in my constituency in Worcester last week, and one of the things that independent retailers in particular were pushing was the idea of greater flexibility in opening hours, so that they could compete. They felt that being able to work different hours was very important to being able to compete with online. You also mentioned earlier getting people into a high street in the evening. We have got a big problem in Worcester in that we have a high street that closes at 5.30 pm and re­opens again at about nine for the night-time economy. Trying to bridge that gap was one of the things that retailers seemed very keen to pursue. How far do you think the industry can change its ways to try to bridge that gap and to try to create opportunities for people to work flexibly into the evenings?

Fiona Wilson: The industry, overall, is 24/7 in lots of cases, in terms of the work that is done. The opening hours of the food retailers tend to be such as that. In terms of encouraging stores and bridging the gap in the high street, I would have thought that the employers would need to talk to their employees to see whether they are willing to work. Because of the diverse nature of the workforce, there are people who would work evenings, because it would fit in with other responsibilities that they have. One of the beauties of retail is that this can work, as long as you deal with making sure that the employee has agreed to it, and you do not change people’s hours willy­nilly.

We have two big issues about flexible work. The first issue is that there is not proper discussion with the worker about changing their hours, and therefore they cannot always do that, but feel that they have to because of the lack of availability of work. If you are going to start opening during those hours in town centres, the buses need to be there to take people home. There has to be a transport system that can help a shop worker to go home at nine o’clock at night, bearing in mind that if the pubs are just getting going, that might be an intimidating environment for some people. That is the first point I would make.

The second point I would make, which our members have big issues with, is over short-hours contracts, where people get a contract for between eight and 10 hours but then regularly work 20 hours a week. You will know straightaway that there is a difference in the terms and conditions if something happens and that the holiday pay is less. We have worked very successfully with those retailers whom we organise to manage all that. In the big retailers, you will find policies in place to ensure that flexible working is dealt with appropriately, that discussions take place, and that those changes are negotiated and discussed with the employer, taking into consideration family responsibilities, travelling home, etc.

We believe that there is a place for legislation and regulation to look at people who have a contract for eight hours a week, but who regularly work 20 hours a week and lose the benefit of those additional hours every single day of the week, and we will be campaigning on that. We think that should be looked at. Those are the two areas that we will be concerned about with flexibility, linked in with the transport issue. We surveyed our members about their journeys home from work. In fact, I can send that in, if you are interested. Would that be useful?

Mr Walker: Yes, it would be useful.

Fiona Wilson: A number of our members tell us that they have real difficulty with work transport in out­of­town shopping centres, which do stay open until the late hours. The stores close at 10 pm and the last bus is at 9.30. That really has got to be addressed, if you are going to look at extended hours.

Q138 Mr Walker: Especially with the rising cost of transport and some of the issues you mentioned around people driving less as well, or wanting to drive less.

Fiona Wilson: Yes. A lot of our members would not typically drive, because they would be relying on public transport. I can send in the journey-to-work stuff.

Q139 Mr Walker: I think all this additional evidence would be very useful. Just picking up on the online issue, you have made a recommendation in your written evidence that retailers-especially smaller, independent retailers-should be encouraged to build up an online presence. I think there are similar recommendations in Portas. It is something that there seems to be a broad consensus on, but how do you see that revitalising the high street? How do you see that having a positive impact?

Fiona Wilson: It is linked in with our observations about multichannel retailing: that those retailers who operate on a "bricks, clicks, and collect in the store" model actually do improve their sales, because they have a presence everywhere. Our view is that, with good training and support for workers, the person who then goes to collect their goods from the store may make some other choice to buy another product while they are there. At the end of the day, the internet is a great showroom, but if people are going into the stores to have a look and then want to order it online, and that store does not have online, they are likely to go to another provider. It is really a question of trying to look at what is successful in retail at the moment, and seeing how we could support that for the high street. You are not going to change it, so you have got to move with it and find a way of helping that model work for smaller retailers. We believe there is a place for that, particular in terms of getting people back to the high street to collect what they have ordered, because they are not going to be in at home to have it delivered to them.

Q140 Mr Walker: At this meeting I mentioned last week, we heard from Land Securities about some of the clever ways in which it is using internet access to then gather data about people’s spending habits and direct them towards the parts of their shopping centres that they might want to go to. Do you think there is an opportunity for the high street in that? If high streets are coming together, and getting independents together to establish connectivity and build an online presence, they might also be able to work together to provide wi­fi access and use some of that data and information to share among all the members of the high street, rather than having it directed by a controlling landowner in the case of a shopping centre. They could actually use that for the benefit of a much broader constituency of high street retailers.

Fiona Wilson: Wi­fi access would bring people in. Free wi­fi access is something that everyone is always looking for, and to have wi­fi access for a town centre would be something that would be very well worth considering. I also have seen evidence of where towns have used a discount card, so that if you take your discount card in, you can get discounts at the stores in that town. At the end of the day, what successful retailers do is to monitor what their customers are doing and do more of it. The technology is available for that to happen, and I can see that being very beneficial.

Chair: We are running behind time, and I am conscious that Caroline wants to ask a couple of questions on business rates. If you could make both the questions and the answers brief, I would be grateful. I think we know where you stand on business rates.

Q141 Caroline Dinenage: Fiona, you did briefly mention the subject of business rates earlier. It is certainly something that, in my own constituency, independent retailers name as one of the biggest challenges. I just wondered if you could give us a quick précis of your views on business rates, and how they stand at the moment.

Fiona Wilson: We have discussed a number of issues this morning about rates being related to turnover, haven’t we? There are concerns that the rates were set some time ago, and so in the current economic situation, they are on the high side, and that they should be reviewed if there is a change in circumstances, like a large store closing or coming in. We would ask the Committee to look at all of those initiatives to assist the high street.

Q142 Caroline Dinenage: Are there any other Government policies that you feel are deliberately, or even inadvertently, affecting both the shape of the industry and the pressures on it?

Stephen Rydzkowski: I will come back to that one in a second, but on business rates, we see that the small business rate relief is currently frozen until April 2014. We would be asking for that to be either extended or gradually phased back in. I do not think that, when you get an announcement that there will be a freeze until a certain time period, it should suddenly reverse back. There needs to be a transition period, if business rates are to go up. That is the first thing.

Fiona Wilson: There are two things I would quickly mention, which we have not spoken about already. In terms of stronger tax avoidance legislation, a lot of small retailers feel they are disadvantaged and there is not a level playing field, because larger retailers are perceived as being able to avoid taxation through schemes that allow that to happen. That needs to be looked at, particularly when you look at internet providers. They do not have a presence on the high street, so therefore they are not having that sort of cost. The second thing, which is not quite a regulation but would really help consumer spending, would be a reduction in VAT from 20% to 17.5%. If consumer spending were to be encouraged, all retailers would benefit. People would put their hands in their pockets a bit more if they had a bit more spare cash.

Chair: Can I thank you? That is very helpful. We may well subsequently feel there are some questions that we should have asked you but did not, and we will write to you. You have already committed yourself to providing us with some evidence to supplement what you have said. We would be very grateful to receive that, and of course, if there are any further observations you wish to make, again we would be very grateful. Thank you very much.

Fiona Wilson: Thank you. We will reflect on the questioning, and if there is anything we think we could helpfully provide, we will do so. Thank you very much.

Examination of Witnesses

Witnesses: Martin Blackwell, Chief Executive, Association of Town and City Management, and Sara Scott, Chair, Market Rasen Town Team, gave evidence.

Q143 Chair: Good morning and welcome. Thank you for agreeing to address us. I am sorry you have been kept waiting a little; however, there were obviously issues we needed to tease out. I will just invite you to introduce yourselves for voice transcription purposes, starting with you, Martin.

Martin Blackwell: My name is Martin Blackwell. I am Chief Executive at the Association of Town and City Management.

Sara Scott: My name is Sara Scott. I am Chairperson of Market Rasen Business Improvement Group, and we were one of the first 12 Portas pilotwinning towns.

Q144 Chair: Thank you very much. Some questions will be person­specific; that does not mean to say that the other is excluded, but there is no need to repeat what one person has said. Can I just start with a question to Martin Blackwell? In your written evidence, you describe the changing nature of town centres in terms of changes to footfall and consumer behaviour. How do you think these changes are going to affect the geographical scope of retailing?

Martin Blackwell: It is widely accepted that most town centres are shrinking in geographical terms. Some of the outlying areas-the secondary former shopping areas-may not survive as shops. What has been interesting is that more users are coming back into town centres. Over the past 20 years, we have been entirely focused on shopping as the important thing for high streets and town centres, and perhaps lost sight of the fact that actually, historically, our town centres have had much broader uses. The Portas review, for example, focused almost entirely on retail and shopping, and ignored, for example, the evening economy, which is a very important part of business. So I think that they are not shrinking, but we may need more flexibility in the uses that we allow these buildings to take part in.

Q145 Chair: That is interesting. How do you think the Town Centre First approach aims to change this?

Martin Blackwell: The Town Centre First policy has been there for many years and has probably been effective in reducing the overall scope of out­of­town development. We are getting towards an American or a Japanese situation, where they have a doughnut effect. We are not there, but in some of those large cities in those countries and others, almost the entire centre has become almost ghettoised. We are not there, but we do have to be very careful that the Town Centre First principles are strictly adhered to, and they are not at the present time. I think there are large numbers of retail businesses and others that would invest in their town centres if they felt confident that a Town Centre First policy would be strictly adhered to.

Q146 Chair: Do you think that parades and non­high street sub-centres have a future?

Martin Blackwell: Absolutely I do. What is interesting is that we have been doing work with both the Portas pilots and the 320 other Town Teams. We did a survey of just over 100 of them, and we asked them what was important to them. Sara is one of those we asked. We were amazed to find that the most important thing, they felt, was about getting people to live in town centres. I was talking to one MP recently who asked me to estimate how many voters there were in his town centre, and the answer was four. There may be some issues there around how important town centres are perceived to be, but from our point of view, there has been a growing number of people moving back into town centres.

Without giving too long­winded an answer, there are also some dangers around this. Government policy at the moment is to relax the need for planning permission to turn what was termed "vacant offices" into residential. However, as there is no way of making sure that this only applies to residential, any office space can now be turned into residential without planning permission. The ATCM offices are by St James’s park. We have been in those offices for over 20 years, and two weeks ago I was given notice to quit, as were the entire contents of our building. All the offices have been given three months’ notice to quit, and we suspect that it is because it is going to be turned into residential, which would be very valuable in Westminster.

Q147 Chair: That is ironic, yes. You pointed to the fact that town centres needed to have a far wider offer than just shops, but they also need to have people living there, and you can certainly see big advantages, given the cost of transport, environmental issues and so on. However, do you not think there is a slight contradiction there, in so far as if you have a town centre that offers a vibrant night­time economy, it is often incompatible with civilised residential living?

Martin Blackwell: There are conflicts there, but if you take the examples of most European countries, the densities of town centre living are much higher than here. Your colleague earlier referred to the evening economy in Worcester in joining these things up. There are three economies here-the daytime economy, the evening economy, and the night­time economy-and they are very important. We have done some work recently that suggests that we have underestimated the importance of the evening and night­time economy. If I might give you some figures, the motor industry in the UK is worth about £10 billion, the fashion industry is worth about £20 billion, and the telecoms industry is worth about £30 billion. The evening and night­time economy is worth all those put together and more, and it employs 1.3 million people, but Mary Portas did not mention it. It is a very important part of our economy, but it has to be managed very carefully. We have an accreditation programme called Purple Flag that enables places to look very carefully at how their place is managed to minimise those opportunities for friction. They do exist, and you cannot get away from it.

Q148 Chair: This is to Sara: can you just tell us how Market Rasen has changed as a town centre?

Sara Scott: Certainly. When I first got involved in the Town Team, there was not a Town Team in Market Rasen, 18 months ago, and it fell out of the beginning of a neighbourhood planning group. A group of business people came together and, after having had a neighbourhood planning meeting, suggested that that process would take too long to make any changes on the high street within a reasonable time frame, because we felt that our high street was dying. Our vacancy rates were up at 20%. Our high street is quite small; we are a small rural community, and so out of 100 shops, one in five was shut.

We formed a Town Team to try to reverse that trend, and we bid for the Portas funds. We did not know much about it, but we took the report at face value and made our bid, and we were fortunate enough to be successful. We have just completed a year. Our Portas anniversary came up some time last month, and in that time, we have managed to halve our vacancy rates on the high street. We run a very successful monthly market with upwards of 60 stores, which brings massive footfall into the town, and we have opened a couple of community shops. There is a general air of confidence on our high street. For us, certainly, the Portas principles that we selected have had a big impact on our high street and a positive impact on the trading businesses, which are predominantly independent, up and down that high street.

Q149 Chair: There have been some dissenting voices, I believe. What is the nature of those dissenting voices, and how would you counter the points they make?

Sara Scott: We have faced dissent on two levels. We have had a fair bashing from the national media. The national press seems to have complained heavily about the speed at which the funds have been spent, how they have been spent, and the results that have been delivered. All I can say on that level is that we did not have a constitution at the point at which we won the funds. It was five months after the date of our win before we had a bank account in place and funds in that bank account, so in terms of spending, we did it as quickly as we were able, and we certainly are on plan to spend the cash and fulfil the promises that we made in our bid. That would be my answer to the national media.

We also get dissent on a local level. Our high street, as I said, is mainly independent, and our challenge is to try and get those independent retailers to do some joined­up thinking. They do not like it, and in a lot of instances it is very uncomfortable. Really, for us, it is all about staying true to some very simple principles: understanding what our customers want at a very local level, and trying to work together to deliver that. It is a bit like banging your head against a brick wall some days, at a local level, but nothing happens overnight.

Q150 Chair: I think we have all experienced those sorts of tensions. Could I just pick up on something? Would you say, based on your experience, that one of the reasons for the relatively low take­up of the actual moneys that have been awarded has been the speed at which the decisions were made, before the detail of the plans and the spending profile has been worked out?

Sara Scott: It is probably different for each one of the towns. Our Town Team is completely independent. We are not joined to our district authority or our local town council; we are an independent group of volunteers, and very commercially­minded. Where we have decided to commit to various areas of spend, we have gone on and done that within our constitution. I think that, in a lot of towns, there are a lot more stakeholders involved and a lot more red tape and bureaucracy, and for a lot of towns that has slowed people down. The other thing is that it is a movable feast. What you laid down in a plan 18 months ago might not be directly relevant to the high street today, because things are changing so fast. We are at the back end of a really, really long period of tough trading, and whilst, as ever, we are working really hard to ramp up and fill vacant premises on our high street, there are traders dropping away all the time, because they have just hung on as long as they can, and the businesses go broke.

Q151 Chair: Martin, you looked as if you wanted to supplement that.

Martin Blackwell: If I could add something to that, we have got some experience across the piece. From April this year, we have been asked by the Department for Communities and Local Government to support the Portas pilots and the other Town Teams. One of the things that is apparent is that there has been terrific progress in some areas, but very little progress in others, across the piece. Perhaps the reason for that is that these were groups of committed and like­minded people coming together, but nobody was there to say, "Actually, these are some of the steps you need to take in forming a partnership," and explain some of the logistics of how partnerships work and their legal status. We have just produced a guide called A Firm Foundation, which is useful for these entities, to say, "Would you like to become a community interest company," which I think Sara is, "or a trust, or a company limited by guarantee?" Once you get these foundations in place, you are then able to handle money, to put plans in place and to develop a business plan. That support was not there last year; it will be this year, and I think that that will speed things up.

Q152 Katy Clark: What do you think can be done to incentivise and support the use of mixed-use developments, for both retail and residential?

Martin Blackwell: Retailing, as a term, is actually pretty broad. We need to think of retailing in a wider sense, and I hope the Committee will do so. For me, if you are selling a drink or you are a restaurant as part of the evening or night­time economy, that is a form of retailing to me. As I said in my opening remarks, we have been very focused on a narrow definition of retailing, and have actually been dominated by a relatively small number of large chains. Some of those have disappeared, have gone altogether and have created voids, as we know. However, as some of those have gone, it has created opportunities for new and different types of businesses to come in.

I can give you an example that was put to me recently, where a chain that runs fitness studios wanted to put in a series of personal trainer studios. These would go into smaller units, and they would be one­to­one fitness training. They wanted to roll out a chain of these around the UK, because they thought there was a market for it. It was an ideal thing for high streets, but every local authority said, "That is not retailing. You cannot have planning permission." There are quite a lot of people who would invest in our town centres if there were some freeing up, and I think these decisions are best made locally.

In terms of incentivising-coming back to that element of it-local authorities do have the ability to give business rate relief and business rate holidays. The Scottish Government have a programme called "Fresh Start", which I understand has been relatively effective, and also operates in Northern Ireland. However, very few local authorities in England have used that power, because they have to pay for it themselves. We have yet to see whether things like business rate retention will help, but finding the wherewithal and the money to give business rate holidays and incentives is difficult. I am sure we will come on to business rates, because that is one of the impediments to new start­ups and new businesses coming in.

Q153 Katy Clark: If I think of my own constituency, we have all these schemes from the Scottish Government, but we also have lots of towns where there are lots of empty shops. Do you not think that, given the rise of out­of­town developments and so on, there will be places where we just have to accept that maybe there is not going to be retail? Whatever definition you give of retail, maybe that is no longer the way a particular town centre is going to be. How do we quicken up that process so that we do not have voids?

Martin Blackwell: That is really interesting, and I agree with you. Again, I do think there will be some contraction. The general consensus is that there is too much retail space, but you cannot just undo space, so you have to use it for something else. If too much prime space went to retail, that would damage the business offer, so I would like to see in core areas the space being used for business. There is almost an element of "back to the future" here. If we go back to the 1970s, our town centres were much more diverse in terms of the offer they had for businesses, so we do need to think about that.

If I could just touch on the issue of voids and empty space: there are different figures out there, but probably the national average is around 12%. If we actually looked in detail at that, I would suspect that quite a lot of that space is actually not available for somebody to rent. They could not go in if they wanted to. A lot of premises are in administration at the moment, and I think there is almost a silent conspiracy to keep them in administration. When a business is in administration, nobody is responsible for the business rates. The landlord does not want it back, because they would be responsible for empty business rates if they have not got somebody to take it on. There is a problem at the moment that people do not want to free up this space, and it suits them to keep it in administration, which means that it cannot even be used for community uses, pop­ups, meanwhiles, and all the other bits and pieces. It is a problem.

Sara Scott: I can elaborate on that. We have got about three anchor properties within our town that are in that exact situation. They are eyesores, apart from anything else. In a small high street, properties that are effectively locked out of use are a long­term issue that does not seem to be going away. We have tackled the owners in question, but you just get absolutely stonewalled. My perspective on mixed use is a little bit narrow, to be honest, because our town is so small and a lot of our buildings are listed. A high street is a high street when it is just a parade of shops. We are taking a really open­minded view: anybody who wants to come and have a go at a business, and thinks that it is viable-whether it is a retail business, a service business, or something more health and lifestyle­based-and who is prepared and has a strong business plan can of course have a go. However, again, it is about matching what they are offering to what the customers in our area want.

Martin Blackwell: One of the things that could make a significant difference is if there was an open national land registry. Very often, people cannot find out who owns these buildings. That was a Portas recommendation, and would make a big difference.

Q154 Mr Walker: I recognise the point you are making about businesses in administration. There is a prime unit on Worcester high street at the moment that is a closed­down Jessops. We could really do with getting that back into use, and I am sure people would rent it if it was available, but there is that issue, and there is certainly a perverse incentive there. I spent my Saturday morning delivering leaflets to flats above shops, and there are, in our city centres, a certain proportion of flats above shops, but when looking around and walking around the high street and raising your eyes, you see an awful lot of empty space as well. Do you think there is anything the Government should be looking at to reduce the administrative burdens on landlords to bring properties into residential use? I accept your point about there perhaps being some perverse outcomes when you change the planning system, but one of the things, anecdotally, I hear back from businesses locally is, "Yes, we do have space above it, but we cannot be bothered to go through the process of separating that space between residential and commercial." Do you think there is anything that we should be looking at on that front?

Martin Blackwell: I hear that, too, all the time. I do not profess to be a property expert. I think it is acknowledged that there is a problem, but I do not think I can suggest to you what the solutions might be. I am not qualified.

Q155 Mr Walker: In Market Rasen, I do not know how you break down, in terms of the commercial-residential split. Is there a significant amount of residential space in the centre?

Sara Scott: There is in the town centre above shops, but also after the high street, you are immediately into housing, so it is not really an issue that we tackle.

Q156 Mr Walker: It strikes me that we are dealing with this twin problem of trying to keep the high streets going and also a shortage of affordable housing. If people can be encouraged to live in those spaces in the city centre that are currently unoccupied, it has got to help.

Martin Blackwell: I am aware of a study done some years ago by the East Midlands Development Agency. It is no longer there, but it did a piece of research looking at all the towns in the East Midlands to work out how much brownfield space-as it was called-was available in town centres, and it was a vast figure. It is just not utilised.

Q157 Mr Walker: How do you think local organisations like BIDs and LEPs can support the retail industry? We have heard some suggestions. Obviously, BIDs have tended to be in the larger town and city centres, but there is some idea of mini­BIDs that could be supporting some of the smaller areas and some of the smaller towns.

Martin Blackwell: Can I deal with BIDs and LEPs separately? Business improvement districts are a good thing, generally. There are over 120 in the UK. ATCM actually introduced the concept to the UK; we took Ministers over to the States more than a decade ago, and 18 September this year is the tenth anniversary of BIDs legislation in England. They are business­led. They are a mechanism for sustainable funding, and they work very hard to support their town centre businesses, because the majority are in town centres. There are some in industrial parks and other areas. There are some, actually, in some quite small locations. However, it does create a problem in a smaller location, because you have a smaller number of levy payers, and therefore it generates less money, or you have to have a fairly high percentage that you collect.

There are a couple of issues around BIDs that would be very helpful to look at at the present time. One is that you cannot have cross­boundary BIDs, in terms of local authorities. If you wanted to have a tourism BID that covered, for example, the Lincolnshire Wolds, that would probably cover too many districts and would be very difficult. The other major issue around BIDs at the current time is that the levy payer is the occupier, not the landlord. There are some very large property­owning organisations-pension funds, etc.-that are not legally part of a business improvement district, because they are not a business rate payer. Having property­owning elements in BIDs would be a good thing.

One of the situations that BIDs face relates to the fact that they are funded entirely by the local businesses, and a lot of those are retailers. My background is retail. It was interesting listening to your earlier speakers, because I started off on the shop floor of a national retailer, ended up managing stores, and find myself here. I went through that process. The issue with BIDs is that they are focused on delivering things now. A retailer is interested in, "How much money did I take today?" BIDs are becoming more shortterm focused, so having property involvement in BIDs would give them a longer­term focus, which I think would be beneficial.

In terms of LEPs, with the odd honourable exception-places like GFirst in Gloucestershire-most LEPs do not even recognise that a town centre exists. Of the 40 LEPs out there, you could count on the fingers of one hand the number that have recognised that their town centre is economically important, and they are economically important. They are a huge driver of the local economy and employ huge numbers of people, but they seem to be concentrating on big investments and high growth. How many jobs do they actually create? If we could do more to sustain our town centre businesses and our retailers, and work with indigenous businesses to help them survive, thrive and grow, I think that would give us more sustainable growth in the long run. LEPs, I think, are really not thinking about town centres.

Mr Walker: They are missing a trick.

Sara Scott: In terms of BIDs, we considered that structure for ourselves and decided against it, purely on the basis that we did not think the businesses would actually pay the levies. If you have no membership, you have no engagement, so how do you actually influence any change under those circumstances? To put that in context, a lot of our retailers do not even have card readers in their stores. Just that bit of cost, which would seem a natural thing to do to build their business, is just a cost too much for them at this point in time. If we start talking about charging them £30, £40, £100 or £150-whatever it might be-it is just not going to go anywhere. For that reason, and to encourage engagement, we formed the community interest company for our town, and the membership was set at £2, so all comers are welcome. That has worked for us in terms of engagement. It does not answer the problem of how we are going to fund our activities going forward, but that is a different challenge.

My perspective on the LEPs, having been invited to a couple of their things in Lincolnshire-I was canvassed yesterday to get my opinion on certain issues around growth-is that I just see that as a very top­down approach. The event that I attended was big representatives from big businesses. There was not much talk of the high street; there was not much recognition that growth can happen from the bottom up, too. Between us at grass roots and these LEP people at the top, there is a bit of a void in the middle, and no apparent mechanism for us to do any joined­up thinking.

Q158 Mr Walker: The picture you both paint of the LEPs is one I recognise. I mentioned that I ran an event in Worcester last week. We invited our LEP along, and it did say that it realised from that event that it needed to engage much more with the retail sector, and that in future it would try and have a retail member on its board. However, it is extraordinary, really, that that should come to it so late in the day, and that that is not a starting point, given the percentage of employment that is created by the retail industry. That leads, really, on to my next question, to which I think we all probably know the answer: is the retail sector receiving sufficient attention from policy initiatives such as the Regional Growth Fund?

Martin Blackwell: No. I would like to give a plug to the retail sector at BIS. I think they try very hard to do a good job with very limited resources. At BIS, there is a recognition-linking up with things like the Technology Strategy Board-that retail can be a driver for the economy, but resources are an issue for everybody.

Q159 Chair: Could I just supplement that? You said, "No", but is that because the bids are not coming in, or because the bids are going in and they are not being accepted?

Martin Blackwell: I am not close enough to see what bids have come in. My only involvement there was to join up with the National Skills Academy for Retail and put an application in to the Regional Growth Fund, and it was, we understand, hugely oversubscribed. I am not aware of any Regional Growth Fund initiatives that are targeting town centres, but they may be there. I am not aware of them.

Q160 Caroline Dinenage: Martin, you are a member of the BIS Retail Policy Forum-correct?

Martin Blackwell: No.

Q161 Caroline Dinenage: You are not a member of the Retail Policy Forum. Do you know anything about the work of the forum?

Martin Blackwell: I am aware that it exists, but we are not a retail organisation and we do not represent retailers. Therefore, that is probably why we have not been included.

Q162 Caroline Dinenage: Have you had any dealings with it in the sense of how it supports retailers?

Martin Blackwell: I am afraid I do not know.

Q163 Caroline Dinenage: You do not. Sara, have you had any dealings with the forum?

Sara Scott: To be honest, the first time I had heard about it was yesterday, so I have absolutely zero awareness, and that is having attended quite a lot of national forums now as part of the whole Portas experience. I am really not aware.

Q164 Caroline Dinenage: Are you aware of any other retail­specific business support schemes that BIS runs?

Martin Blackwell: No. There is a very small team at BIS that would like to do more work, and there is some work being done about putting a new strategy together for the UK and beyond-a local, a national and an international strategy, which is very helpful. The Portas work started in BIS, but then moved over to DCLG, because of the large community aspects to it. I think that was probably the right thing to do.

Q165 Caroline Dinenage: Sarah, you are not aware of any retail­specific organisations?

Sara Scott: No.

Q166 Ann McKechin: I just wondered if I could ask you a few specific questions about the Portas initiative. We heard from the USDAW representatives earlier this morning that overall only about 7% of the total funding had been spent. I just wondered what your own experience was in Market Rasen.

Sara Scott: We have spent about 50% of our funds, but as I was saying earlier, it was five months into the year before we had any funds in place. We managed to get a lot of our programmes moving without spending anything. There was no actual deadline for spending it, either, so in that respect it is very difficult to know whether we are on track or not on track. Certainly, as a set of volunteers, there is a rate at which you can tackle projects, so that has kind of dictated where we are at.

Q167 Ann McKechin: It is a capacity issue, okay. How much support from the Government have you had over this period? Do you think you have had additional support or advice from them as a result?

Sara Scott: We have had a representative all the way through the process, so there has been somebody who we can get in touch with and get advice from. As for how much actual practical support there has been for the initiative that we have undertaken, there has perhaps been less, but we carved out a very unique plan for ourselves.

Q168 Ann McKechin: Has it been one person who has been your point of contact with the Government?

Sara Scott: Hilary who is sat there, yes.

Q169 Ann McKechin: How often are you in contact?

Sara Scott: We have met at the various events, and then we have e-mail contact in between and we pick up the phone occasionally. Hilary has been to visit us in Market Rasen, so it has been as much as we have required, really.

Q170 Ann McKechin: That is good. Now, obviously, there have been contradictory reports about the Portas Review. The Guardian reported that, since becoming a Portas pilot, your own town has seen an increased number of empty shops. Is that correct?

Sara Scott: It is absolutely not correct. We were made aware of those statistics on the day before they were published. Their period does not match our period of reporting, and certainly for us, with a high street of 100 shops, one or two variations in terms of the period can make a massive difference. We raised those issues with the various reporters that got in touch, but it did not appear to make a difference.

Q171 Ann McKechin: So has the number of occupied shops increased since you started the initiative?

Sara Scott: Substantially, yes. We had 20 vacants at the start of the period, so that was a case of physically walking down the high street and counting them. At the point of the anniversary, we had halved that. It was good for us, but obviously it varies with the figures published.

Q172 Ann McKechin: That is promising news, and no doubt as a result of your hard work.

Just a question for both of you now on a slightly different subject: business rates, which we have been discussing throughout this morning. Can I ask both of you what your views are on business rates, and particularly the delay in the business rate revaluation until 2017 now in England? Could I also ask you about the point that Nadhim Zahawi raised earlier this morning about whether we should try to rate this more in terms of turnover and other changes in rent, and whether we need to look at rent and rates together, in terms of readjusting where the retail market now is?

Sara Scott: Purely from a grassroots level, in terms of engaging with businesses that are thinking about coming on to our high street to start up, set up or trade, business rates is the one thing they all mention. It is the difference between being able to do it and not having the confidence to start up, so in that respect, it is certainly a big issue. In terms of the way they are set, it does not seem over-fair to me. As for what the appropriate structure is, all I would say is that for a town like ours, where we are trying to stimulate growth, some kind of free period for start­ups would be something I would absolutely campaign for, because it would give some people the confidence to make the start. If we can give them the start and then help them to develop, that would certainly make a difference in our town.

Q173 Ann McKechin: Do your members consider that if there was a revaluation at the original date, actually they would be paying a lower rateable value?

Sara Scott: I do not really understand the mechanics of how that revaluation would work, but I think the perception is that they would benefit.

Martin Blackwell: Fundamentally, the system is no longer fit for purpose. To have a system that is based on fixed capital and fixed premises is no longer current in today’s world. The world has changed hugely in the five years since the last revaluation in 2008. Earlier, you were talking about things like the digital high street. All these things are having an impact, and most of those retailers have fixed premises and fixed capital costs, and business rates are currently based on that building. Since 2008, we think rates have come down by about 30% across the board.

We recognise that with business rates, this is a zero­sum game-if there are some winners, there will be some losers-but we would think that in most places for retail in town centres and high streets, it would come down. It will not come down by 30%, because of the winners and losers. The Government need to end up with the figure that they first thought of, if you like. However, the sense is that it would be a benefit to retailers in the high street, but it has to be looked at in the context of those retailers that have mobile capital, and that trade largely, but not wholly, online. They have a huge unfair advantage. It is not a level playing field. The system of property tax based on property in town centres is no longer valid in today’s world, but it is a global issue.

Q174 Ann McKechin: It is quite difficult to think of a solution that would allow a fairer playing field, given that the increase in online shopping each year in the last five years has been really significant. It is clearly a trend that has still some way to go.

Martin Blackwell: Absolutely, and I am by no means a tax expert, but the system currently is not fair and proportionate. It is not linked to genuine economic performance.

Q175 Ann McKechin: The Government have indicated that they want to postpone this revaluation to 2017. Perhaps I could put this question the other way around: would that present an opportunity for the Government to start looking at this area in some depth, to consider whether the tax system, as you have said, is not fit for purpose, and whether alternatives need to be considered?

Martin Blackwell: There is damage being done every day, and postponing a revaluation was taken very badly by the retail industry. You are right that it does, perhaps, give an opportunity of an extra two years to look at this in detail, because if we do think the system is not fit for purpose, what is going to replace it? That will require a lot of detailed thought and consideration.

Q176 Rebecca Harris: We have touched a little bit on planning policy, whether it is about changing use to be more residential, but there are also obviously things like the whole area of out­of­town centres, and there might be a change of use more generally in terms of things that more support the night­time economy, for example. My first question, really, is: do you know of examples where BIDs or Portas pilots have had to address the planning policy area?

Sara Scott: The only experience we have had in terms of planning has been related to standards on the high street, so getting people to maintain their properties and improve their appearance. Fortunately, among our group, we have a couple of people who understand how that works, and we have worked with our district council to serve a lot of notices. While it is taking a while for that to flush through, we have had some success, although it is difficult.

For example, we have quite a big listed building, and it is right where the traffic lights are in our town. If you were driving through, it would be where your car stops, and it was empty for five years with squatters in there, and semi­derelict. We served special notices on it, and it has taken a while for that to flush through, but it has been repainted and it looks much better. In terms of giving a first impression to visitors to our town, it is a massive tick in the box. However, my understanding is that all the moneys that were spent on that property are now held against it, so if somebody actually wanted to purchase it, they would end up paying the bill for the works already done, which means that in effect we have just shunted the problem forward in time. It just makes it that much more difficult to crack. For us, it has been a bit of a double­edged sword, and it has certainly been one of the areas where, as a kind of naive group, we do not really understand the frameworks. There certainly have not been experts we could pull in to understand how we might apply that, but in some respects, it is a little bit outside our remit.

Martin Blackwell: In planning, if we had not had Town Centre First, we would, as I said, be in a very much worse state than we are. It does seem to be almost optional now as to whether you pay attention to it. Town Centre First should not be about restricting economic growth, but it should be about restricting economic displacement. If we have an oversupply of retail in town centres, that is because there has been massive growth in out­of­town retail. We probably need to ask ourselves why it is cheaper, quicker and easier to develop out of town than in town. It is: if you give a retailer an option, they know that they can do it quicker, cheaper and easier out of town, so why would they not?

You asked for an example, and I can give you a positive example through DCLG’s High Street Renewal Fund. It was called the X-Fund; it is now the High Street Renewal Fund. One of the examples there was Ipswich. Ipswich lost a major anchor; I think it was TJ Hughes, but I am not absolutely certain. Of course, losing that anchor in a shopping centre had a knock­on effect, and the vacancy rate went through the roof. The owner of the shopping centre-and it was made easier because it was a shopping centre-came to the local authority and said, "Can we have permission for change of use from A1 retail to leisure?" It was completely against the local plan, and after a long period of discussion, the officers recommended it and the local authority have passed it. That unit, as I understand it, is now going to become a cinema, and all the surrounding vacant shops are going to be evening leisure opportunities. That is an example of a very pragmatic stance by a local authority that is creating new businesses and new jobs.

Q177 Rebecca Harris: In your experience, are they all being so pragmatic and sensible, or are some of them more likely to stick to the letter of their planning policy?

Martin Blackwell: Pragmatic and sensible is the unusual, not the norm.

Q178 Rebecca Harris: That brings me on to the DCLG initiative you talked about and what more can particularly be done to promote town centre development. Who should be taking the lead? Should it be DCLG, the local authority or BIS? Where do we need the push to come on?

Martin Blackwell: Depending on different circumstances, I spin one way or the other. Regarding finding the right balance between what should be allowed at a local level, I will give you another example, but without naming the location, if I may. Planning permission came in for a town centre development from a major retailer, and planning permission was given. The development was going ahead, and once it got to the point where they had got so far they could not stop, permission was then given for a major out­of­town direct competitor. Through the Freedom of Information Act, they found out that this was actually planned all along, but they had held it back until the first development had got beyond the stage where it would be uneconomic to pull the plug. I think that is deceitful in planning terms. There are some strange things happening out there, so finding the right framework that gives enough scope for local decisions to be made is a really difficult balance.

Q179 Rebecca Harris: In terms of this Committee as the BIS Committee, and the work we are doing, do you think that the BIS Department itself can actually deliver retail strategy without, for example, having more direct influence on things like the planning process?

Martin Blackwell: Absolutely not, no. I think there has to be joined­up thinking across Government. Town centres are complex things. We are talking about retail, but retail will not thrive unless we get policies around living and everything else in place. It cannot be looked at in isolation.

Q180 Rebecca Harris: I have got two more questions. One is to go back again to the balance of the residential to retail in town centres. It is a big issue in my local area; we are having to regenerate one of our town centres, and some of the pay for that will be housing. It was, really, just for you to talk a bit more on what you think the right balance and the risks are, in terms of change of use.

Martin Blackwell: There should be designated primary areas for commerce. When you are looking at change of use for the question of what is a late­night venue quite often, we have also seen it the other way around, where permission has been given for residential and there has been a long­standing late-night use there. The residents then complain, so it is a question of what came first. I do not think these are decisions that can be legislated for at a national level; it does need local political decisions to be made about what to allow where. The use class system at the moment is pretty restrictive, in that if it is A1 retail use, any retailer can go in. The local authority cannot say, "But we do not want a pound shop or another branded coffee shop," because most coffee shops are A1 retail. They do not make anything; they just warm things up. The ability of the local authority to say, "We want this type of business and not that one," just really is not there.

Q181 Rebecca Harris: That might lead to less of the sort of 1970s high street, which some people are harking back to in any case.

My final question, which we touched on with our earlier witnesses, is on access, strictly speaking: parking, and the risk of councils treating parking as cash cows. You will hear the argument, "Well, actually, we are helping the shops. We are stopping the commuters parking there all day." I just wondered if you had any comment you would like to make on that, and how we can improve.

Martin Blackwell: Oh, yes.

Rebecca Harris: Please do.

Martin Blackwell: Thank you for the opportunity. Mary Portas called for free car parking. It is not going to happen, is it? In fact, it should not. Sara and I were talking about this earlier, and there is free car parking in Market Rasen. It is said that there is no such thing as a free car parking space, and there is not, because it has to be paid for somewhere; it has to be managed, etc. We did a major piece of research-I would be happy to supply some copies to the Committee and the Library, if you wish-that tried to look at whether there was a relationship between footfall, the quality of the offer in a place and car parking.

The example we came up with, just to try and bring it to life, was Birmingham. If you wanted to park by the Bull Ring in Birmingham and walk to Harvey Nichols and Selfridges, you would expect to pay a premium price for car parking. If you went to Solihull or Worcester, where there is still a pretty good offer, you would expect to pay a reasonable price, but maybe not as much as to park in the Bull Ring. If you wanted to park in Sparkbrook, which is a suburb of Birmingham, you might not wish to pay at all. When we did this analysis, there was a line that said that the price comes down as the quality of the offer comes down-the number of opportunities and the number of key places you have, etc. There is a recognised quality index, if you like.

However, it is not a straight line. What the study suggested was that the medium­sized and smaller market towns were over­charging for what was there. You can charge a premium price if you are in central London, central Birmingham, or elsewhere, but if you are a market town, you need to look very closely about what you are charging. That seems to be the opportunity to free up some of the spaces. We do not think making them free is the right answer entirely. There could be a free period-say, two, three or four hours-but experience suggests that if you make it free parking all day, all the spaces are filled by nine o’clock by people who work in the town centre and there are no spaces left for customers. You have to get the balance right here.

The other key thing that came out of this piece of research was that we found that very few local authorities-who do not own all the car parking spaces, by any means, because there are quite a lot of private operators out there, but who quite often have quite a bit of stock-have a car parking strategy. They have not asked themselves, "What is it for?" Car parking could be to generate revenue for the local authority, it could be a service to their local customers and residents, or it could be part of their economic development strategy; but they have not asked those questions. Generally, the feeling we have is that quite often, car parking policy is set by the engineers and the accountants, and not by those people who are trying to create business. Sorry that it is a long answer.

Q182 Rebecca Harris: No, it was a very good answer. Thank you. Do you want to add anything to that, Sara?

Sara Scott: It is a happy accident that we are working in a town that has free car parking and no intentions to do away with that. It works really well for us. To my mind, if you want people to come to a place, you have to make it easy and convenient for them to do so, so slapping big charges on them or having difficult car parking schemes is not good for that. It certainly would not work in our town; it would just put the nails in the coffin, so to speak.

The only disadvantage to the free car parking scheme is along the lines of what Martin said. Because we are in a commuter area, some people use our town centre parking as parkandride for the big cities, so they park up there, jump on the train, and of course those car parking spaces are then full for the day. Something that makes it time­limited would work for us, but it is very specific to our market town form, if you like. The geography and the physicality of the space influence how it works for us.

Chair: Thank you. That concludes our questioning. Can I thank you and the previous panel? Again, I think you have offered to provide us with some further evidence; we would be very grateful to receive it. Similarly, if you feel there is anything you would like to add to anything we have asked you, we would be grateful to receive that as well. Thanks very much.

Prepared 1st July 2013