Member Article

Government will not save failing shops

The demise of the UK high street is largely down to an extraordinary surge in online consumer purchases, according to Business Secretary, Vince Cable.

The Secretary said economic weakness is at the root of the domino effect British retailers have suffered, with a series of big names falling in the past 12 months.

He added, however that it is not for the Government to save these stores.

Dr. Cable, during Tuesday’s annual report and accounts for the Department of Business, Innovation and Skills (BIS), also identified an unexplained trend in the UK for online shopping, which he argued was also a major factor in the downfall of stores like Woolworths, La Senza and JJB Sports.

He was questioned by Conservative MP for Worcester, Robin Walker, during the House of Commons Select Committee meeting, on how much support the government gives to the retail sector.

Mr Walker said retailers provide 11% of the UK’s GDP and employ around 4m people, and cited the large amounts of help given to the financial sector, which accounts for 10.4% GDP and employs just over 1m people.

Dr. Cable said: “I don’t think we feel there is an argument for giving financial support on any scale.

“I don’t want to minimise the effect of people who are losing their jobs, but I’m not sure I’d describe it as a crisis.

“In the sense of what is happening in the retail sector, […] the main reason we’ve had this spate of companies going into administration is primarily because of technological change and changes in consumer purchasing habits.”

The Government launched a strategy in October to work on ways of helping the retail sector, which included an investigation into potentially opening up the European single market in the digital area to help online retailers.

For the English high street, Mary Portas published a BIS review in December that called for a level playing field, and recommended that town centres should be run like businesses.

This report resulted in a “small pot” of funding, however Dr. Cable indicated that it wasn’t the Government’s place to save failing retailers.

He added: “[There has been] a very, very rapid switch to online downloading of music and film, and online shopping. We don’t quite understand why Britain is a leader in this field. These are things government should not be in the business of trying to stop.”

This was posted in Bdaily's Members' News section by Miranda Dobson .