BEIS committee hears evidence on the impact of coronavirus on businesses and workers

The Business, Energy and Industrial Strategy Select Committee today held an evidence session on the impact of coronavirus on businesses and workers.

Initial questions by Committee chairman Darren Jones (Labour MP for Bristol North West) revolved around the effect of the pandemic. Helen Dickinson, Chief Executive of the British Retail Consortium, estimated £2 billion per week would be lost as a result of the lockdown. 13,800 store closures were estimated, mostly in clothing and footwear.

Darren Jones noted there had been a shift towards online shopping through Amazon and other platforms, but there was a debate about food retailers who also sold non-essential goods. Helen Dickinson agreed there were many businesses aggrieved that they had to be shut. Mike Cherry, National Chair of the Federation of Small Businesses, said hundreds of thousands of small businesses had not had the same support as retailers.

Paul Howell (Conservative MP for Sedgefield) asked if there had been adequate communication from the government. Helen Dickinson stressed the importance in future of looking closely at the delineation between essential and non-essential businesses.

Replying to Alan Brown (Scottish National Party MP for Kilmarnock and Loudoun), Mike Cherry pointed out that business rates was a regressive tax and hit hardest the businesses that were space-reliant.

Mark Pawsey (Conservative MP for Rugby) raised the issue of the build-up of rent arrears. Kate Nicholls, Chief Executive of UKHospitality, said this was the biggest issue facing the hospitality and retail sectors. Without further government intervention, businesses would have to close. Helen Dickinson said the problem highlighted the need for tenants and landlords to come to negotiated agreements.

Darren Jones asked if the trade bodies had been invited by the government to discuss issues, including tweaks to the curfew policy, the definition of essential and non-essential retail, solutions to deal with the rent build-up and inequality of the business rates support scheme. Helen Dickinson and Mike Cherry agreed that engagement with government had been good but more clarity was required on decision-making.

The second panel focussed on the impact of the pandemic on workers. Judith Cummins asked about government support for USDAW workers. Tony Dale, Head of Research for the Union of Shop, Distributive and Allied Workers, said online retail had grown by a third in 12 months, taking shoppers off the high-street, which highlighted a longer-term problem beyond the pandemic. There had been an attitude that retail could take care of itself, but that was no longer the case. A government strategy was needed to avoid ghost towns. He said retail, which accounted for 11% of the economy, paid 25% of business rates. And yet online retail did not have that expense. “The time has come for us to seriously look at what an online sales tax would look like.” Such a tax of 1% would raise £1.5 billion. That could help the government cut the business rates bill in the retail sector.

Mike Brewer, Deputy Chief Executive and Chief Economist of Resolution Foundation, thought that Kickstart would not be sufficient to avoid long-term unemployment, especially among younger people, and an extension of the scheme would be required.