Update on Shop Direct

As I have previously mentioned in my statements on Shop Direct, I am bitterly disappointed that Shop Direct failed to engage with the council, Greater Manchester Mayor, Andy Burnham, or myself about their plans to move to the East Midlands, including over the 18 months that this was being considered.

The Shop Direct distribution centre in Shaw currently employs 705 Shop Direct employees with 636 agency employees. This is devastating news for the Shop Direct staff and their families and the anticipated redundancies will have a dreadful effect on the local community.

I’ll be working closely with the council, unions and the Mayor’s office to ensure that Shop Direct management are co-ordinating properly with trade union representatives and staff, and that they keep their commitment to support staff impacted by these potential redundancies.

It was essential to bring together all parties affected by the proposed relocation to the East Midlands round the table and we met in the Mayor’s offices on Friday, 13th April. We conveyed our disappointment at the lack of prior notice from the company. Secondly, we put an offer on the table to explore whether there was any possibility that Shop Direct might reconsider its decision, perhaps relocating to sites elsewhere in the city-region. Oldham Council tabled alternative proposals of a site of a similar size, accompanied by a favourable business package, at Broadgreen Park, Chadderton. It was disappointing that there was no willingness from Shop Direct to engage on these proposals.

Given that they appeared to have made their decision, the meeting then looked into getting the best possible support for the workforce, and securing a future for the sites affected.

Many of Shop Direct’s staff have worked for the company in one form or another for many years, in some cases several decades and for a number of generations. The professionalism and commitment from Shop Direct’s employees has been second to none. The Mayor put a proposal to the meeting to establish a taskforce, led by The Growth Company, which was agreed by all parties. We will continue to do all we can to support the 1,992 people affected by this abrupt decision and to maintain jobs on the sites affected, albeit through new employers.

I have also written to the Prime Minister to demand that the Government is fully engaged in the process of supporting constituents through this difficult time. It is imperative that staff and local businesses in the area are provided with focused support by the Department for Work and Pensions and the Department for Business, Energy and Industrial Strategy including skills and re-training packages, employment advice and financial support. It is imperative that Oldham Council is also given support as part of its ‘Get Oldham Working’ project; given half of its budget has been cut by your Government since 2010, this will put even more pressure on them.

Shop Direct is not in financial trouble. It reported an increase in underlying profits before tax of 10.2% to £160.4m last year. It has seen sales growth increasing over 5 consecutive years. The decisions it has made are purely commercial. The proposed site in the East Midlands will employ fewer staff as Shop Direct moves towards increased automation. Given that automation is likely to lead to huge challenges for the UK labour market as a whole, urgent action is required from the Government. I have therefore also urged the Government to put in place measures to support workers impacted by the ascendance of automation.

I addition I have requested an urgent meeting with the Prime Minister to discuss plans to support constituents. It is important that all action is coordinated with all relevant agencies which, unfortunately, has not been the case to date.

Please be assured I am committed to do all I can to ensure constituents are not left to deal with this alone.

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