Retail Trade: Online Suppliers Question 3.07 pm Asked by Lord
Naseby To ask Her Majesty’s Government what
discussions they have had with the Competition and Markets
Authority about the impact on the United Kingdom retail trade of
online suppliers, such as Amazon. The Parliamentary
Under-Secretary of State, Department for Business, Energy...Request free trial
Retail Trade: Online Suppliers
Question
3.07 pm
Asked by
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To ask Her Majesty’s Government what discussions they have
had with the Competition and Markets Authority about the
impact on the United Kingdom retail trade of online
suppliers, such as Amazon.
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The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy (Lord Henley)
(Con)
My Lords, Her Majesty’s Government want all parts of the
retail sector to thrive. As such, we engage regularly with a
range of retailers’ associations and the Competition and
Markets Authority. If competition is not working effectively,
the CMA has powers to investigate and to take action.
-
(Con)
Is my noble friend aware of the extent of the dominance
of Amazon and the threat that it poses
to the retail trade in general and, soon, the grocery trade
and pharmaceutical trade? Amazon already controls, in the £1
billion market, 39% of the UK and 57% of the States. Against
that background, will the Government level the playing field
and consider what France, Germany and so on are looking at in
terms of digital taxation, a special sales tax like the USA
or indeed a higher rate of VAT, which is possible under our
legislation? At the very least, bearing in mind that figure
of 39% of today’s £1 billion market in our country, will they
set up a monopolies commission inquiry? If they do not, our
retail trade as we know it will disappear.
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My Lords, It is a matter for the CMA to look at these
matters. As I said in my original Answer, it has the power to
look at that. With regard to some of the aspects of taxation,
I believe that Her Majesty’s Government have led the way on
this issue internationally. HMRC continues to work with the
online marketplaces to ensure effective action against
sellers who are, for example, breaking United Kingdom VAT
rules and to prevent new non-compliant sellers joining the
market. We believe all those multinationals in that world
ought to be paying the taxes due and we will not settle for
anything less. Other than that, I think my noble friend
should accept that many of the changes that are happening in
the marketplace are being driven by what the consumer wants,
and our job is to ensure that the marketplace can adapt to
that.
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(CB)
Does the Minister consider it acceptable that a company that
delivers its goods from a warehouse in the UK to a customer
in the UK but has its headquarters in, for example, the
Channel Islands should pay less VAT than a company that
delivers its goods from the UK to the UK and has its
headquarters in the UK? That is what is happening.
-
I do not think I can take the noble Lord much further than I
have at the moment. Colleagues in the Treasury and in Revenue
& Customs are aware of some of these problems and are
looking at them, and he will be aware of commitments that
were made in our manifesto. I cannot take it much farther
than that.
-
(LD)
My Lords, the Minister is very sanguine about what is going
on in our high streets, but today, Toys “R” Us went into
administration, putting about 3,000 jobs at risk and Maplin
has called in the administrators. There is a crisis on the
high street. What are the Government doing to recognise the
pressure that the digital economy is putting on the physical
shops on our high street?
-
We recognise this. As the noble Lord will be aware, we have
made changes to the rates system to provide some help to the
high street and will continue to do so. We have also
established the Future High Streets Forum, which is chaired
by my honourable friend the Minister for the Northern
Powerhouse and Local Growth, . That will look at what we
can do with retailers, but it is obviously up to retailers,
as I said, to adapt to a marketplace changing as a result of
consumer demand.
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Lord Deben (Con)
Is my noble friend aware that this is a dangerous situation
and requires urgent action? I refer noble Lords to my entry
in the register of interests. Retailers have to pay business
rates, which means that they start off at a significant
disadvantage. They have to contribute to the producer
responsibility levies—another disadvantage. They have to pay
the proper apprenticeship levy—another disadvantage. We
cannot wait for a general statement; we must act now. The
latest proposition is that retail trading may decline by 22%
in the next year. It is time for the Government to move
urgently.
-
I made it clear that we have made changes in the Autumn
Budget, with measures worth £2.3 billion by cutting business
rates and trying to bring a degree of fairness to the system.
There are limits to how far one can go and one must accept
that a lot of what is happening is a result of what consumers
want. It is obviously up to the retail sector itself to adapt
and change in the face of changing consumer and social
trends. The Government are doing what we can. That is why I
mentioned the Future High Streets Forum, chaired by my
honourable friend and why we have announced changes to rates.
Thereafter, it must be for the retail sector itself to see
what it can do to change.
-
(Lab)
My Lords, is the noble Lord aware that a couple of years ago,
a sub-committee of your Lordships’ EU Select Committee—under
my chairmanship, as it happens—produced a report on online
platforms? We found that the apparent consumer advantage was
taken advantage of by the big online platforms, and the
competition authorities at the European level were finding
that difficult to come to terms with—witness the ongoing
problem with Google. Is it not now important, post Brexit,
that the competition authorities here tackle the domination
and abuse of competition by the online platform giants?
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My Lords, that is why we set up the CMA in 2013. That is why
it has the powers it has and the ability to investigate abuse
when it sees it.
-
(Con)
My Lords, has the Minister seen the story in the paper about
Airbnb wanting to become as big as, or bigger
than, Amazon? If that happens it will obviously
threaten all the high street tourist agencies, which have
said that it would take over tourism completely. Will the
answers he has given today apply equally to Airbnb, if it
becomes half as big as Amazon?
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My Lords, again it is a matter for the CMA to look at that,
but the Government will obviously keep these matters under
review as well. These are social changes happening in the
marketplace, and very often because that is what consumers
want.
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The (CB)
My Lords, I declare my professional and LGA interests. Does
the Minister agree that, in addition to the challenge of
online retailing, rental levels, underinvestment in retail
streets and the business rate system, which imposes one of
the highest recurring taxes of its kind anywhere in Europe,
conspire collectively to damage profits prospects and the
public experience of many traditional shopping environments?
Furthermore, does he agree that trying to shift the burden of
reliefs for business rates on to hard-pressed billing
authorities is not the right answer?
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The noble Earl makes some valid points. These are matters
that can and will be looked at. The important point is that
we have done what we can to help with rates, and we hope that
that significant help will make it easier for the retail
sector.
Extract from
Delegated Legislation Committee motion to consider
the Draft Passport (Fees) Regulations 2018
The Minister for Immigration (Caroline
Nokes):...We now score alongside organisations such
as Amazon and John Lewis on
customer satisfaction. We are the only public sector body on
the list, and we scored higher than Prudential, Debenhams and
Hilton. I welcome those accolades as testament to our
hard-working officials across the UK...
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