Chuka Umunna MP

Jack Dromey, Shadow Minister for Local Government and Chuka Umunna, Shadow Minister for Small Business have called on the Government to back Labour’s plan to save our high streets following today’s release of retail employment figures showing that retail employment was down by 0.4% and there are 3,100 fewer full-time jobs in UK retail than the previous quarter.

These figures follow the statistics released on Tuesday which showed an 8% increase in retail companies falling into administration to 43 up from 40 in the same period last year.

Chuka Umunna MP, Shadow Minister for Small Business and Enterprise, said:

“The Tory-led government is bystanding while people lose their jobs, businesses suffer and our high streets stagnate. The VAT hike and the squeeze on family incomes has led to fewer people shopping in our shops and these figures show there are now fewer people working in them.”

“A temporary cut in VAT would help consumers and businesses now, kick-start the stalled recovery and so help us get the deficit down.”

Jack Dromey MP, Shadow Local Government Minister said:

“These figures show the damage the Government is doing to our high streets. The Tories have opposed Labour’s plan to give local people a real say over the future of their High Street. The Tory-led Government should change course – they need to support growth and jobs by backing Labour’s four point action plan to revive the High Street.”

This Friday, 29 July, Chuka will be hosting a coffee afternoon for constituents between 2pm and 4pm at the Weir Link Centre, 33 Weir Road, London SW12 0NU.

If you’d like to speak to Chuka about a national policy issue, a personal casework matter, or anything else, please feel free to stop by at some point during the afternoon for a cup of tea or coffee and a chat. If you know anyone else in the area who might be interested, please pass the invitation along to them as well.

Chuka Umunna, Labour’s Shadow Minister for Small Business & Enterprise, commenting on the British Bankers’ Association (BBA) report on High Street Banking released today, said:

“It’s very worrying that net lending to non-financial companies fell by £2.5bn in June because those businesses need access to finance to help with cash flow and to grow, helping get the deficit down through growth and jobs.

“The most striking aspect of the report is the BBA’s finding that businesses are putting off expansion and business investment plans due to uncertainty in the economic outlook, which the government is putting at risk by cutting too far and too fast, choking off recovery.”

Today Chuka Umunna MP, Shadow Minister for Small Business & Enterprise, and Jack Dromey MP, Shadow Minister for Communities and Local Government launch Labour’s campaign to Save Our High Streets in conjunction with The People newspaper. Below is Chuka’s article on the issue, an abridged version of which appears in The People today.

School’s out and the summer holidays have started. Many will be grateful for some rest, relaxation, and time to think.

Last November Chancellor George Osborne was busily boasting that “Britain’s economic recovery is on track”. Since then it has flatlined under his watch. Like other countries we should be reducing our deficit but at a responsible pace that does not choke off growth. Because the Chancellor is cutting too far and too fast, he is putting jobs at risk.

Nowhere is this more evident than on Britain’s High Streets. Look around and what does one see? Boarded up shops growing in number, as confidence falls and people feel the pinch. Shops all over the country have been affected – from the local newsagent to well known brands. 50,000 units currently sit dormant. Jane Norman went under last month, Carpetright shut 75 stores and Habitat put 30 premises into administration. Thousands have lost their jobs.

Will Mr Osborne change tack given the circumstances? Not a chance. “There is absolutely no question of us coming off our plan” he said this week. Meanwhile Business Secretary Vince Cable has appointed Mary “Queen of Shops” Portas to look at what should be done to create more prosperous high streets. She doesn’t report until November but, in any event, it doesn’t look like the Chancellor will give the Business Secretary a chance to implement her recommendations.

So what is to be done? Today, Labour is launching a four point plan to save our High Streets – immediate action to prevent more shops being boarded up.

First, a temporary cut in VAT from 20% to 17.5% should be implemented. This would bring back confidence and put money into consumers’ pockets saving the average family £450 a year.

Second, as Labour’s Shadow Local Government Minister Jack Dromey has argued, local people should be given power to put the heart back into the high street in the Localism Bill which is currently winding its way through Parliament.

Next, a level playing field on the High Street should be promoted by putting a competition test into the planning system, ensuring big name retailers do not squeeze out the small local independents.

Finally, the government should repeat the bank bonus tax and use £200m of the money raised to boost the regional growth fund. £5 million of this could be used to fund an empty shops initiative to spruce up the high street, enabling councils to use vacant units for cultural, community or learning services, rather than leaving them empty.

Our local shops are not only businesses that provide vital opportunities and employment – they are part of the fabric that binds our communities together. The Tory led government should not be abandoning them, leaving them to struggle alone in these tough and uncertain times; it should act now before its too late.

Labour is launching a campaign to save Britain’s high streets, calling for urgent action to help retailers, protect jobs and give people a real say over their local high street.

This follows a recent spate of household-name high street retailers going under or having to close premises. Jane Norman, Focus DIY, TJ Hughes and Ethel Austin have gone into administration; Carpetright has closed 75 stores, while Habitat has put 30 premises outside London into administration. Retailers HomeForm, All Saints, HMV, Comet, Mothercare, JJB Sports and Thorntons have also been hit recently.

According to the Local Data Company, 14.6% of retail premises in the UK are now vacant, indicating that approximately 50,000 high street units are empty, with vacancy rates rising. The Javelin Group has predicted that if current trends continue, a quarter of all non-food retail outlets in the UK could be vacant by 2020.

Thousands of jobs on the high street are at risk. The British Retail Consortium’s Retail Employment monitor in April 2011 found that 29% of retailers planned to decrease staffing levels, up from 8% in April 2010.

Consumer spending remains sluggish as household incomes are squeezed and the government’s VAT hike hits consumers. Nationwide Building Society’s Consumer Confidence Index, released this week, fell by six points in June, returning to a similar level to January.

The government’s VAT hike is hitting the High Street – last year, the British Retail Consortium predicted that the increase would cost 163,000 jobs over four years and reduce consumer spending by £3.6 billion over the same period.

Additionally, many small businesses are struggling to access the finance they need, with lending to businesses contracting in the three months to May 2011 and the cost of borrowing increasing according to the Bank of England this week.

Labour has unveiled a four-point plan to save Britain’s high streets:

• Enact a temporary cut in VAT from 20% to 17.5%, giving struggling retailers a boost and putting £450 back into each family’s pocket.

• Introduce a retail diversity planning clause, putting communities in charge of the future of their local high streets. Local people and local retailers would have a say on any retail plans for their area, giving them the power to put the heart back into the high street.

• Create a ‘competition test’ in the planning system, leading to greater choice and lower prices for shoppers. The test would ensure a level playing field between small and large shops.

• Repeat Labour’s empty shops initiative, enabling councils to pursue innovative uses for empty shops and reinvigorate high-streets, such as using vacant units for cultural, community or learning services, rather than leaving them empty

Commenting, Shadow Minister for Small Business and Enterprise, Chuka Umunna MP said:

“The Tory-led government is bystanding while businesses suffer and our high streets stagnate. Consumer confidence has been badly hit by the government’s VAT hike and the squeeze on family incomes. It is no surprise that retail sales have remained sluggish.

“We are looking to businesses to provide the growth and jobs we need and to power the recovery. The government has failed to get banks lending to businesses, and has hit retailers with this year’s hike in VAT. The recent wave of high street business failures should send a signal to ministers on the real pressures which firms are under.

“A temporary cut in VAT would help consumers and businesses now and would help us get the deficit down.”

Commenting, Shadow Local Government Minister Jack Dromey MP said:

“We need to put the heart back into Britain’s High Streets. Labour wants to give communities a real say over the future of their high street and the power to make the changes they want.

“One of the things I hear from my constituents is how the character of the local high street has changed. The High Street is not what it once was, they say. And I know many other MPs hear the same – we want to put that right.”

“Healthy and diverse high streets are the heart of local communities. The Tories have opposed Labour’s plan to give local people a real say over the future of their High Street. Instead the Tories appointed Mary Portas to run their retail “review” while opposing real action. Labour backs real shops, not talking shops.”

A nationwide survey of small and medium sized businesses (SMEs) conducted by Shadow Minister for Small Business and Enterprise Chuka Umunna MP reveals the difficulties businesses are facing on the ground in accessing finance as a Bank of England publication today reports that lending to businesses is contracting.

The Bank’s Trends in Lending publication for the second quarter of 2011, released today, reports that “the stock of lending to UK businesses contracted in the three months to May…by around £4 billion” and concluded that while larger companies are able to access finance, SMEs continue to face difficulties. It said that “larger firms continued generally to be able to access bank lending if required, but opportunities for smaller firms remained more variable”.

Additionally, the publication notes that the cost of lending for small companies “continued to drift upwards” and that demand for finance had increased “markedly from small and medium-sized businesses in 2011 Q2”.

The minutes of the Bank’s Monetary Policy Committee July meeting, also released this week, articulated concerns that “indicators of the cost of bank credit to a range of firms, particularly smaller businesses, had remained elevated”. Statistics on lending under Project Merlin for the second quarter of 2011 have not yet been published, but in Q1 the banks covered by the agreement collectively missed their lending target to SMEs by £2.2bn.

Shadow Business Minister Chuka Umunna MP has conducted a survey of almost 150 SMEs across the UK, to engage with their concerns and build up a picture of the situation faced on the ground by businesses in accessing finance.

The Project Merlin agreement specifies that its targets only apply “should sufficient demand materialise” and the banks have cited a lack of demand for finance among SMEs as a reason for sluggish lending.

However, more than half of respondents (51%) said they had used personal finance such as a personal credit card, savings or a personal loan as a source of finance for their business in the past 12 months. More than three quarters (77%) said the government was not doing enough to increase access to finance for SMEs.

Of those surveyed, almost half of businesses (48%) had applied for bank finance in the past year but 37% of those had been unsuccessful in their first application.

The survey also showed an increase in the cost of new finance facilities for small businesses, with 48% saying they had noticed that the cost of new borrowing had risen in the past three months, and 40% of that group saying the cost had risen by 3% or more.

Shortcomings in the service provided by banks to SMEs were also evident, with 38% either ‘dissatisfied’ or ‘very dissatisfied’ with the level of service they had received, and an overwhelming majority (77%) responding that they would welcome more choice in business banking.

Commenting, Mr Umunna said:

“It is worrying that lending to businesses is contacting at a time when many regions and sectors are struggling and when we need them to be powering the recovery through growth.

“We have engaged with businesses across the country and found that the vast majority of business owners feel the government is not doing enough to get banks lending.”

Commenting on the Nationwide Consumer Confidence Index and ONS Retail Sales figures for June, both released today Shadow Minister for Small Business and Enterprise Chuka Umunna MP said:

“Consumer confidence is stagnant and retail sales remain sluggish. Today’s figures show that consumers are reluctant to spend, and this is hitting the high street and the businesses who we are looking to deliver the growth and jobs we need.

“The government’s approach is holding back growth. A temporary cut in VAT would help consumers and businesses now and help get the deficit down through jobs and growth.”• Today’s ONS retail sales figures show an monthly increase in volume of 0.7% in June following a 1.4% fall in May. According to the ONS’ release “the underlying pattern in the monthly retail sales growth rate was flat”.

• Nationwide’s Consumer Confidence Index fell back by six points in June, returning to a similar level to where it was in January 2011. According to the report: “Continuing pressure on disposable income may be making it difficult for consumers to drive the recovery”

Following the publication of the Home Affairs Select Committee report into phone hacking and the Metropolitan Police’s investigation of it, Streatham MP Chuka Umunna said:

“It’s a great shame that failures at the top should tarnish the reputation of London’s Met, a police service overwhelmingly made up of hard working local officers who work tirelessly to keep Londoners safe in very difficult circumstances.

“Whilst it is important the relationship between the police and the media is reformed and addressed, I hope this saga will not distract from the Met’s core tasks, not least reducing and preventing the serious gang, gun and knife crime which continues to blight streets in my constituency and others.”

Equifax has published statistics for Q2 2011 on the number of business failures across the UK regions.

Commenting, Shadow Minister for Small Business and Enterprise Chuka Umunna MP said:

“Nationally, in the second quarter of 2011 business failures have increased by more than 3 per cent compared with a year ago and are also up on the previous quarter. However, it is particularly worrying that in some regions, the rate of business failures has increased even more steeply, rising significantly higher than the national average.

“We are looking to businesses to power the recovery, providing the growth and jobs we need in all parts of the UK. The government is standing by while many businesses struggle and by cutting too far and too fast, is choking off economic growth and putting businesses’ livelihoods at risk.”

Commenting on the FSB’s Voice of Small Business Survey published today, Shadow Minister for Small Business and Enterprise Chuka Umunna MP said:

“The findings of the FSB’s Voice of Small Business survey are deeply concerning, with expectations for business conditions in the next quarter falling to almost zero.

“The government’s policies are holding back economic growth, hampering businesses and putting jobs at risk. A temporary cut in VAT would put money in consumers’ pockets now, which would boost jobs and growth and so help get the deficit down for the long-term.”