Michael Fallon, the new minister for business, becomes responsible for the retail portfolio at the Department of Business, Innovation and Skills at a time when retailers are gearing up for their busiest season of the year in one of the most difficult trading periods many have ever faced.
He replaces Mark Prisk, who has moved to the Department of Communities and Local Government (DCLG) as housing minister. Prisk will likely be responsible for the Portas programme to revive struggling high streets, a duty previously undertaken by Prisk’s predecessor Grant Shapps.
Fallon, deputy chairman of the Conservative party, will act as “the voice of business” said Downing Street when he was appointed. But does Fallon have the skills to be the voice of retail?
A graduate of St Andrew’s University, Fallon began his political career as MP for Darlington in 1983, which he held for nine years before starting his business career.
At present a director at leading city brokerage Tullett Prebon, Fallon may have to step down from that post in his new role, where it is likely he will have plenty on his plate.
He has business credentials too. After setting up a chain of children’s nurseries called Just Learning with the funding from Dragon’s Den star Duncan Bannatyne, Fallon remained chief executive while continuing his duties as MP. In 2001 Alchemy, a venture capital business run by Jon Moulton - who recently acquired Jaeger - bought Bannatyne out for £22m.
Retailers will hope that with such a background, Fallon will understand their concerns, such as onerous business rates which increased 5.6% in April this year. The new rate will be based on this month’s inflation which looks likely to be higher than original forecasts. The BRC is lobbying for a freeze in business rates next year. This could be Fallon’s first big challenge fomr a retail perspective.
Meanwhile, the debate between the Conservatives and their Lib Dem partners about a permanent extension of Sunday trading hours is ongoing .
Shop vacancy rates are also likely to be an issue, as the rate remains stubbornly high at 14.6%, according to the Local Data Company. The issue was highlighted by self-styled retail guru Mary Portas in her recommendations to the Government, and an improvement campaign is being led by the DCLG.
It was Eric Pickles, secretary of state for DCLG, who revealed the Government is attempting to make it easier for retailers to open pop-up shops, enabling void premises to be made use of and scrapping red tape. Fallon is likely to have input in discussions such as that and the Portas programme more widely, and retailers will watch to see how things develop, particularly since Fallon’s predecessor Mark Prisk moved to DCLG in the reshuffle.
It is yet to be decided whether he will also be involved in tackling ongoing retail issues such as crime, planning and improving car parking services in town centres, which may be led by other Government departments.
There has been speculation that Fallon’s appointment was made to try and rein in Lib Dem business secretary Vince Cable’s outspokenness and with Fallon’s experience in the party - he was a junior minister in the Thatcher Government and served under John Major - he is likely to be skilled in negotiating the corridors of power.
With such experience across Government, Fallon is seen as a go-to minister for agenda setting programmes such as Radio 4’s Today and is often put in front of the cameras because of his public speaking skills.
Retailers will hope that Fallon charms them with with his actions as well as his words.