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The Rt. Hon. Patricia HewittThe British Retail Consortium Annual Dinner |
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I'm delighted to be here. To have the opportunity to talk to you. The retail sector is crucial to our economy.
In my speech, I want to refer as much as possible to some of the many examples of excellence that exist throughout the retail sector. I think we're particularly bad in this country at celebrating excellence. It is bizarre that if someone picks up a £1 lottery ticket and wins millions, they will get public adoration, and yet if someone starts a business from scratch, with blood, sweat and tears - and creates new wealth, they won't get so much as a mention. So I want to do my bit to turn that around. Tonight I want to talk about three issues.
It is not Government's role to run business. Our role is to make sure the frameworks and structures that you operate in - both nationally and internationally -are right. And enable the very best businesses to succeed. In the first term, our priority was to get the macro-economic framework right - so business could operate from a base of stability. We now have the lowest inflation and interest rates in more than forty years. The highest employment ever - with youth unemployment virtually eliminated and long term unemployment down by 70%. We won't jeopardise this stability at any price. Now, our priority is to work with you to raise productivity and improve our competitiveness. I know, in the past, retail has been viewed as something of a "Cinderella" by Government. I remember my first meeting with the BRC when I was small firms Minister. I'm determined we'll turn this around - and I'm glad that David thinks we're making progress. We are becoming much more outward looking. We've got 22 senior external Board members at DTI; officials working in the regions; and all our Senior Civil Servants spending a week every year on secondment to industry. So, we are getting better at understanding business. But we also need to get better at listening. You said we should get better at the way we consult and I'm determined we will. More effective consultation will get us better at identifying alternatives to regulation. We need to consult more effectively - less formal, dry and time consuming. I know regulation is a very real problem for business -particularly small businesses. But, as David said, regulation does have a vital role to play in modern society, particularly in areas like food and consumer safety. In the first term, we introduced a number of measures to improve employment conditions - so we could get people back to work by making work pay. Although the critics had said this, and in particular the Minimum Wage, would cost jobs - employment's risen by 1.5 million since `97. In 2001 we grew faster than any other G7 country. And all the predictions are that it will be the same this year. We must put regulation in perspective. If you are looking at a country to invest in, we still have the most lightly regulated labour market in Europe. And in some countries it still takes you weeks to form a company -compared to just one day here. I was pleased that last week's OECD report said "the UK is at the forefront of regulatory reform in the OECD"; and that entrepreneurs face a better business and regulatory environment in the UK than in most other OECD countries. Our new approach is clear. Smarter regulation. We will only regulate where necessary – when best practice and voluntary measures will not achieve the outcomes we're looking for. And where we do regulate, we will make sure it is with as light a touch as possible. With the Better Regulation Task Force, we will also look back on the legacy of regulation - and where we uncover un-necessary regulation - we will scrap it. In this spirit, I can announce that we will use the Regulatory Reform Act to abolish the notification procedures for Sunday Trading. At the moment, every time a large store wants to change its opening hours, it has to write to the local authorities, who put it on a register. There are 300 of these registers across the country - but no-one ever looks at them! You told us it was a complete waste of time - so we're getting rid of it. We also listened on licensing laws. Although I can't pre-empt the Queens speech, I can say that we are planning to legislate to allow licensed premises to apply to open for up to 24 hours a day, subject to local authority approval. The Bill is currently in the final stages of drafting with a view to introducing it as soon as Parliamentary time permits. You also told us that it can be difficult to prove or identify a person's age. We've endorsed the BRC's proposals to establish a common standard for the various proof of age schemes that currently exist. And, from listening to you, we have backed the formation of a new industry led Retail Strategy Group. This will help industry and Government work more closer together to improve the competitiveness and productivity of the retail sector. Although he can't be with us tonight, I am delighted to be able to announce that Tony DeNunzio, Asda's president and Chief Executive, has agreed to chair it. David, you mentioned what a major issue retail crime is for you. I understand this very well from my own constituency too. We've backed the creation of retail crime partnerships and given £15 million for small retailers to improve security. 3,000 businesses benefited in the first year. 4,500 are set to benefit in the second. In Birmingham city centre, levels of reported retail crime have fallen by more than 40% since the establishment of their partnership in 1999. So there is a lot that we are doing together - in partnership with industry. Building our relationship. Making sure we get the best out of each other. The second challenge I want to highlight is how, in a tightening labour market, we must continually find new and innovative ways to get the best out of people. This is not just about getting the best people for the job, but also making sure that, once they are in work, they have the opportunity to reach their full potential. Every business knows they need the best people for the jobs. But there's still not genuine equality of opportunity for all. Women, ethnic minorities, and older people can still have difficulties getting into work. Some parts of the retail sector are leading the way in attracting these groups - for example, by providing flexible working opportunities. 51% of employees in the retail sector work part time, against 25% across the economy as a whole. Sainsburys offer term time contracts to mothers who want to spend school holidays with the kids. Littlewoods carefully consider all requests for flexible working - whether from men or women. B&Q has an active anti ageism policy. The reason they recruit older staff is because their customers prefer it -older staff have greater DIY know-how, a desire to stay in the job longer and a better record on punctuality. I recently read a wonderful story in The Times "Not Dead Yet" column - crucial reading for any politician sitting in on a late night debate. Connie Cox, 80, B&Q's oldest female member of staff, recently helped open the DIY chain's eighth store in China - in Hangzhou. Recruited at the age of 68, Connie was promised the trip to China 3 years ago on the proviso she was still with B&Q when she turned 80. These are wonderful ways of attracting untapped parts of our labour market into work. They are particularly important as the labour market contracts. I saw just yesterday the new report by Retail Human Resources saying that the retail sector is having increasing difficulties in recruiting - due to tough competition with the public sector. Between 100,000 and 150,000 vacancies in retail need to be filled in the next 12 months and they could be difficult to fill. So the challenge is to tap the whole of our labour market. Offering opportunities for all. But, also, to make sure we get the best out of our employees when they are at work. Crucial to raising productivity. Many retailers appreciate the value of winning the trust and commitment of the workforce. Tesco and USDAW have one of the biggest and most well known workplace partnerships in the country. And it's not just big - it works well too. Since they launched it back in 1998, both the union and the company have gone from strength to strength. Tesco's profits are up to over a billion pounds a year. USDAW's membership is up by 25%. John Lewis Partnership has its long standing programme of employee ownership and involvement. ASDA and Richer Sounds both came in the top three of the Sunday Times Top 100 Companies to Work For. An award all the more special because it is voted for by the actual employees. And ASDA also won a Castle award - which I presented earlier today. The Castle Award recognises employer excellence in addressing equal pay and flexible working. The retail sector is also leading the way on improving management and leadership skills. Dixons have developed a range of Management, Executive and Senior Management Development programmes in association with Henley and Ashbridge Management Colleges. The Co-op has a programme to improve supervisory training - which leads to a team leader NVQ. It is a key priority for Government to help develop management and leadership skills - as well as pushing the skills agenda more widely. Raising the proportion of workers trained in an industry by 5% means a 4% increase in value added per worker, and 1.6% increase in wages. So it's an important priority for Government and for business to close the skills gap. I'm delighted that the BRC successfully bid to own one of the trailblazer Sector Skills Councils - and that, as a result, Skillsmart was established in April this year. We need to make sure we harness the full talents of all -and give everyone the opportunity to reach their aspirations, hopes and potential when they are at work. The third challenge I want to highlight is the need to make the best out of world markets. Last week I was in China, and I saw how rapidly B&Q are growing there. They've only been out there 3 years, but already have eight stores - the latest being the one opened by Connie Cox that I mentioned earlier. They expect to open another 60 over the next five years - and turn over £100 million a year within the next year or so. I also recently saw a branch of Tesco in Korea - where they are transforming the whole concept of what a modern Department store should be. And also in the new applicant states for an enlarged EU. A couple of weeks ago I was in Poland. Tesco now have 48 stores in Poland - employing around 8,000 people. Businesses find it easier to succeed in world markets if they have experienced a strong, competitive domestic market. And a strong consumer base. We're pushing hard, through the EU, to promote free and fair trade - opening up more world markets - breaking down barriers. But we are also arguing hard in Europe to sort the Common Agricultural Policy out. Europe can't just keep coming out with the rhetoric on free markets if it's not prepared to deliver where it really counts - as the Prime Minister made very clear at the Heads of Government meeting last week. We cannot and will not accept a system of subsidies that pays out two dollars a day for every cow in Europe - but leaves 1,200 million men, women and children worldwide living on half that amount. Nor a system that leaves the consumer plainly worse off. To conclude, there's lots we want to achieve together. From the smallest shop to the largest international retailer. Servicing customers, employees and investors. I look forward to continuing to work with you as we take this exciting agenda forward. |
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Other speeches by The Rt. Hon. Patricia Hewitt
(the following are available from the archive) |
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