Chuka Umunna MP

Shadow Minister for Small Business & Enterprise Chuka Umunna MP and Shadow Regional Economies Minister
Gordon Marsden MP are calling on the government to take urgent action to help retailers in seaside towns.

Coastal towns have some of the UK’s highest rates of business failure, according to research undertaken earlier this year by accountancy firm UHY Hacker Young. Seaside towns and cities including Poole, Blackpool, Southend on Sea and Bournemouth were among the lowest-ranked across the country for business creation, the research found.

Labour has recently launched the Save Our High Streets Campaign, unveiling a four-point plan to help struggling retailers, protect jobs and give people a real say over their local high street:

• 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.

This follows a 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.

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.

The Bank of England’s Agents’ Summary of Business Conditions for August highlighted the difficulties currently facing high street retailers, with many stores having to rely on discounting to drive sales and “reporting that promotions were now used almost all year round”.

The report noted that most shops began summer sales early, with “discounts deeper and across a wider range of goods than usual” and that High Streets are “losing ground to destination shopping centres, discount stores and the internet”.

Statistics released recently by the British Retail Consortium (BRC) show that in the second quarter of 2011 retail employment was down 0.4% on the same quarter last year – the equivalent of 3,100 fewer full time jobs in the retail sector.

In government, Labour launched a £5 million Seaside Towns Grant to tackle deprivation and help boost local economies hit by the downturn.

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

“This weekend many people will be enjoying a trip to the seaside, but many of our coastal towns’ High Streets are suffering badly from the government’s VAT hike and the squeeze on family incomes which have hit retailers. Last week, the Bank of England confirmed that many shops are having to run sales all year round to survive.

“The Tory-led government is bystanding while businesses suffer and our high streets stagnate. We are calling for a temporary cut in VAT, which would give struggling retailers a boost and put money back in families’ pockets.”

Commenting, Shadow Skills Minister and Blackpool South MP Gordon Marsden said:

“Local businesses and enterprises in Seaside and Coastal Towns, a high proportion of them small businesses, benefitted greatly from the money the Labour Government put in to boost their local economies in the downturn.

“In particular, the Seaside Towns Grant together with money for Empty Shops Initiative and Future Jobs Fund enabled both residents and visitors to support Seaside Economies as did Labour’s SeaChange initiative. All of these were scrapped by the Tory-led Government who have shown little understanding of either the specific needs of seaside towns or small businesses in them.”

Shadow Business Minister and Member of Parliament for Streatham Chuka Umunna is urging businesses affected by the recent unrest but without insurance cover to make claims before the deadline passes next month.

Under the Riot (Damages) Act 1886 affected businesses which are uninsured, or whose insurance does not cover riot damage, can claim compensation from Police Authorities. Normally, claims must be received within 14 days but to give people more time to submit these claims the government has extended the period to 42 days. These 42 days are counted from the first day after the damage occurred.

Businesses which have suffered as a result of the civil disturbances are being advised to obtain a crime number from the police. Businesses which have insurance covering riot damage should contact their insurers immediately if they have not already done so.

Following calls by Labour, the government set up a £20m support package for affected High Streets and commercial districts, to be distributed by local councils.

Commenting, Chuka Umunna MP said:

“Small and medium sized businesses are the lifeblood of local economies and community hubs – we are looking to them to provide the jobs and growth we need. They were also among the worst sufferers from the recent unrest, so it is crucial that those affected are able to get back on their feet as soon as possible.

“It is important that we send out a message to all affected local businesses that do not have insurance cover and have yet to seek compensation, to put in their claims before the deadline passes next month.”

Chuka recently met with Bilal Ahmed, one of his young constituents who is raising money for victims of famine in East Africa. Bilal wrote to the Weir Link Centre to ask if there was anything they could do to help, so they organised the ‘Small Hands Can Do Big Things’ fundraising event and local children donated a pound each to attend in fancy dress. The money raised was sent to the Disasters Emergency Committee – if you would like to donate, please do so here.

The Bank of England’s monthly Agents’ Summary of Business Conditions for August, released today, stresses the difficulties facing high street retailers and banks’ failure to lend to small businesses on reasonable terms.

According to the report, for many stores discounting is required to drive sales with many retailers “reporting that promotions were now used almost all year round”, and that high streets are “losing ground to destination shopping centres, discount stores and the internet”.

Most stores began summer sales early “with discounts deeper and across a wider range of goods than usual”, the report said.

Last month, Labour launched a campaign to save Britain’s high streets, demanding urgent action to help retailers, protect jobs and give people a real say over their local high street including a temporary VAT cut from 20% to 17.5% to give struggling retailers a boost.

In government, Labour enacted a temporary cut in VAT from 17.5% to 15% in November 2008 – this reduced the tax liability for both businesses and households by around £11bn and increased GDP by 0.5 per cent. According to the Centre for Economics and Business Research, the temporary VAT cut boosted sales by between £8 and £9 billion.

The Summary of Business conditions also highlights the continuing difficulties which small businesses face in accessing finance: “small companies, with weak cash flow or relatively little collateral, still found borrowing terms prohibitive”. This follows the most recent statistics on the government’s Project Merlin agreement, with the five banks covered by the deal missing their target for lending to SMEs by £600m in the second quarter of 2011.

Minutes of the Bank of England’s August Monetary Policy Committee August meeting, also published today, confirm that “indicators of the cost of bank credit to smaller businesses remained elevated and the supply of credit to them was still restricted”.

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

“The Bank of England’s latest Agents’ Summary of Business Conditions highlights the need for urgent action to help High Street retailers, who have been hit by the government’s VAT hike, falling consumer confidence and the squeeze on family incomes. A temporary cut in VAT would help consumers and businesses now and would help us get the deficit down.

“The Managing Director of the IMF, Christine Lagarde, is right to say that ‘slamming on the brakes too quickly will hurt the recovery and worsen job prospects’. The evidence for George Osborne’s claim that Britain is a safe haven has collapsed – that is why the Chancellor should take heed of the IMF’s latest advice.”

Labour today urged business as usual in Britain’s High Streets, already suffering from falling retails sales and now hard hit by the riots in London, Birmingham, Manchester and Liverpool. With decisive action having been taken by the Police to restore order, shops, pubs, bars and restaurants should remain open and shoppers should once again go back into the High Street, Labour said.

Shadow Local Government Minister and MP for Birmingham Erdington, Jack Dromey said:

“Birmingham lost £5 million a day in sales and some shops in Erdington High Street in my constituency saw their sales halved. Indeed, on Tuesday, riot rumours swept the High Street and all shops shut up shutters. Britain’s High Streets are already struggling as sales fall because of collapsing consumer confidence. We cannot allow fear to grip the High Streets because some small retailers will simply go out of business.”

“The Police have acted decisively to restore order. Now we need normality on the High Street. Our message to shoppers this weekend is you can shop in safety and, to shop keepers, it should be business as usual.”

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

“Small and medium sized businesses are the lifeblood of our local economies and lynchpins of our local communities, providing most private sector jobs and almost half of private sector turnover in this country – they were amongst the biggest victims of the unrest.

“All of us can help stop the actions of a few from dragging our economy down as a whole by getting out on to the high street, supporting our local shops and, in affected areas, helping them get back on their feet again.”

Chris Leslie MP, Labour’s Shadow Treasury Minister, commenting on today’s Project Merlin figures from the Bank of England, said:

“Securing lending to small businesses is vital to our economic recovery and getting the deficit down. But even on the Tory-led Government’s own unconvincing Project Merlin measures it’s disappointing that the banks have missed their 6 month target for lending to small businesses.

“It is becoming clear that Project Merlin simply won’t deliver for small businesses. As we highlighted earlier this week there are five significant flaws in the deal which render it almost meaningless.

“And last week’s statement by the banks themselves raised significant questions about how the data is collated and reported, which is why we have written to the Governor of the Bank of England to clarify the process.

“We need tough action from the Tory-led Government to help our small businesses but George Osborne continues to let the banks off the hook.

“Instead of giving the banks a tax cut this year the Government needs to repeat the bank bonus tax this year on top of the bank levy and use the money to build more affordable homes, support small businesses and create over 100,000 jobs.  And it should immediately introduce a temporary VAT cut to help kick start the recovery.”

Chuka Umunna MP, Labour’s Shadow Business Minister said:

“The Tory-led Government is letting small business down. We learned this week that the Government has missed its own deadline for the Business Growth Fund to begin investing in SMEs, just when the economy is flatlining and businesses are crying out for access to finance.

“And the bid threshold of the oversubscribed Regional Growth Fund remains so high that many small and medium sized businesses miss out on this potential investment.”

Dear Sir Mervyn,

Project Merlin lending targets – reporting mechanisms  

To the Treasury Select Committee on 1st March, you stated that the Bank of England would not be monitoring the level of bank lending to businesses, but publishing bank-provided data after a ‘fairly cursory plausibility check’. It was noted at the time that this differed from the Chancellor’s statement that in order to ‘ensure progress against lending targets can be monitored, the Bank of England has agreed to collect the relevant data.’

On Friday 5th August, the five Merlin banks released a statement detailing their collective business lending amounts for the first half of 2011, stating that they had lent £100.4bn to UK businesses and £37.4bn to small and medium sizes enterprises.

It is our understanding that the Bank of England is the publisher of Project Merlin lending data on a quarterly basis, with the next quarterly data due on 12th August. The statement by the banks last week throws this into doubt, and raises significant questions about the data collation and reporting process, in which there must be the utmost transparency and integrity to ensure the figures presented to the public and business are correct. We would ask you to advise us of the following:

• If the banks are able to put out their own data ahead of the Bank of England’s verified data, which data set do you believe should be considered as the actual picture of lending to UK businesses and SMEs?

• Do you believe the advance publication of data by the banks is useful for the reporting of lending commitments to businesses?

• Do you believe the banks should be going against the Merlin agreement and publishing their own figures, when it was explicit in the agreement that the Bank of England had this role?

• Has the Bank raised concerns with the Merlin banks about the publication of their own data and the confused picture this provides to markets and businesses?

• Has the data that has been released by the banks been collated and audited by PricewaterhouseCoopers?

In addition to the quarterly Merlin reports, the Bank of England also publishes its monthly Trends in Lending report, giving three month trends covering lending to UK businesses and SMEs. With now three separate sources for the true picture of bank lending to UK businesses and SMEs, it has become difficult to know which one to believe. Why does the Bank of England not use the same figures as the lending targets in the Merlin agreement?

We know your own personal commitment to ensuring small businesses have access to reliable funding from the banks, and agree that the treatment they have received in the last few years has indeed been heartbreaking. We would welcome the opportunity to discuss any further ideas you may have to increase access to finance for the millions of small businesses that are the lifeblood of our economy.

Yours,

Chris Leslie MP – Shadow Financial Secretary to the Treasury

Chuka Umunna MP – Shadow Minister for Small Business and Enterprise

Chuka was interviewed this morning on business television network, Bloomberg, on the affects of the recent unrest and violence on local businesses across the UK and on what needs to be done to help them recover.  You can watch a video of the interview here: http://www.youtube.com/watch?v=hXYnATXugkI

Our Borough awoke this morning to news of looting and violence on our streets overnight, following similar disturbances in Tottenham and Enfield on Saturday.

Last Thursday, in Tottenham, a father of four – Mark Duggan – lost his life during a police operation. As his MP, my good friend and colleague, David Lammy has said, the IPCC must get to the bottom of what happened that day. Mr Duggan’s family subsequently organised a peaceful protest on Saturday only for it to be hijacked by a few thugs leading to widespread violence in the Tottenham constituency.

I, along with my other colleagues, Tessa Jowell and Kate Hoey, represent the three constituencies covering the Brixton area. Last night, a minority of people used the tragic situation in Tottenham as an excuse to loot local businesses and wreck havoc on the streets of Brixton and along parts of Streatham High Road too. The motives of those responsible for this were completely opportunistic and their actions totally unacceptable.

There can be no excuse for such acts and the context in which the unrest occurred here in Lambeth is in no way comparable to the situation in Tottenham where the police are accused of shooting dead a member of that community in the last seven days – it would be a mistake to claim otherwise.

A number of people have also sought to draw parallels between the violence and looting of the last twenty four hours and the Brixton riots of the 1980s. Again, I believe this would be a mistake – police community relations then were at an all time low and we have made a huge amount of progress since. Police community relations in Lambeth now are not perfect (and probably never will be), yet we are in a far better place: there is frequent dialogue and partnership working; Safer Neighbourhood Teams and Panels operate in every ward; and, important institutions like the excellent Lambeth Community Police Consultative Group (CPCG) are regularly consulted.

There will be those who ask, what possesses people to engage in such criminality, to loot, to engage in violence? What is it about their circumstances that fail to inspire them to choose a different course? We should seek answers and address the root causes but this in no way excuses theft and violence.

Questions will also be asked about whether the response of the police was all it could have been and they are currently reviewing the deployment of their resources. We must remain calm and allow them the space to do this.

Finally, in my view many have been too quick to attribute the criminality we saw to young people without waiting for the full facts to emerge or for the police to complete their enquiries and determine who to charge. My understanding is that people of all ages were involved in stealing from the Curry’s in Brixton for example.

It is ordinary people’s lives who have been harmed by these events; the independent shopkeepers who have had their premises looted whom I have spoken to today, the people who struggled to get to work this morning due to the disruption caused and the people who were afraid to leave their homes last night. We stand beside them with a clear message that our community will not stand for this. We will work to bring the perpetrators to justice – they do not speak for us. We live in a wonderful community and we will not allow them to drag us down.

Chuka Umunna MP is the Member of Parliament for the parliamentary constituency of Streatham, covering Streatham and parts of Clapham, Balham, Tulse Hill and Brixton.

Thank you to everyone who came along to Chuka’s coffee afternoon last week at the Weir Link Centre – it was great to see so many residents there and a range of interesting issues were raised, including constituents’ concerns about the Government’s proposed changes to the NHS, planning policy, and Government regulation of childminders.

Chuka will continue to hold regular events like this around the constituency, so watch this space!