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Local Trading

Volume 461: debated on Friday 15 June 2007

Motion made, and Question proposed, That this House do now adjourn.—[Tony Cunningham.]

Thank you, Mr. Deputy Speaker, for calling me to speak in this debate. By happy coincidence, it follows the debate on the Sustainable Communities Bill. Mr. Speaker’s hand certainly moves in a mysterious way when it comes to the ballot.

I shall start with items under the heading “Boring But Important” to set the tone for the debate. UK retail sales average about £246 billion a year, which is more than the combined economies of Switzerland and Ireland; it is therefore a considerable sum of money. Just as important, the UK retail sector employs more than 10 per cent. of the working population, or some 3.1 million people, and half of the UK’s approximately 280,000 retailers are managed by sole traders—men and women who add to the wealth of this country.

Like most people in the Chamber, I believe that our high streets should be at the heart of our community and a focus of civic pride. They are not just a place to shop and to spend money, but a place to socialise and to spend time with our friends and family—and, I dare say, with our Member of Parliament. Vibrant high streets support vibrant local services. If we have popular high streets, we will have good bus links, schools and sub-post offices, and we will arrest the spiral of decline that we often see in high streets where local services leave to be replaced by charity shops—albeit that they do a good job—and takeaways.

There are obvious environmental advantages to having vibrant local shops and communities. Perhaps the most important advantage is that people do not have to travel miles in their car to go shopping. Local shops are an environmentally sound thing to have. I have nothing against out-of-town shopping centres, but I believe that local shopping centres also have a great deal to offer. At a time when we are worried about carbon emissions and our carbon footprint, that point should be taken into consideration in legislation and strategies.

I believe that a good high street contains a rich and diverse range of retail offerings including specialist shops, cafés and restaurants. We should try to have unique retail experiences. I hazard a guess that the people of Broxbourne do not want the same retail experiences as the people of Bath and of Burnley, and I am sure that the same is true in the other direction. We must try to guard against our high streets being dominated by national chains and takeaways. That does not encourage a café society or attract people to the town centre to spend quality time with their families and friends.

One of the key things that can be done to make a good high street is to improve ease of access, which is something on which supermarkets and out-of-town retailers have an advantage over retailers on the high street. Most supermarkets in my constituency have vast car parks that allow people to park almost at the front door. However, in too many of our town centres, motorists are prosecuted and persecuted. Yellow lines, double yellow lines, red lines and double red lines have a negative impact on footfall and restrict people’s ability to use their town centres.

I shall cite two vibrant town centres, although neither is in my constituency: Marlborough in Wiltshire, and Hungerford, which I believe is in Berkshire. Cars can be parked right down the spine of those centres, so people can park in the town centre before using the shops. Both those towns have diverse retail offerings. Although pedestrianisation is popular at the moment, it can create a barrier to people’s use of town centres and local shops. Hoddesdon, which is a town in my constituency, allows parking around the town centre, but that does not seem to attract people to it. Its town centre, which is fully pedestrianised, can lack a sense of vibrancy and buzz and feel like a slightly desolate place. I know that policy planning guidance note 6 is not part of the Minister’s remit, but let me express the hope that that planning tool can be used for positive change in our towns. It is too often seen as a tool for controlling development, rather than a force for change.

The need to support local traders and to shop locally will be met if we make our high streets more accessible and welcoming to shoppers. However, I do not want this speech to become an attack on supermarkets. Tesco’s headquarters is in Cheshunt in my constituency, and the company employs many hundreds, if not thousands, of my constituents. Like most of my constituents, my wife and I use our local Tesco. We spend a large part of our weekly budget there, and my constituents and I compete over carrots, cakes and bread. In many communities, especially in the north, supermarkets that go into town centres become a powerful factor to encourage regeneration. If footfall in a town centre is increased because people go to a large supermarket, many surrounding retailers will benefit, although that is not always the case.

It is just possible that when it comes to supermarkets, some places have too much of a good thing. The Harvester pub was recently sold off in Cuffley, which is a village in my constituency. Tesco believes that that will be an attractive site on which to put one of its Tesco Express stores. Residents and existing store owners in Cuffley are a little nervous about the arrival of that store, especially, they argue, because there are already 10 Tesco stores in a 5-mile radius of the village. The figures that those people have produced, which I have no reason to dispute, suggest that in the EN postcode in which Cuffley is located, Tesco accounts for 50 per cent. of all grocery sales.

When I meet local shopkeepers in my constituency and residents of Cuffley, they urge me to press for local planning law to take their concerns into account. As things stand, if the application to site a store at the former Harvester pub meets planning law requirements, there is nothing that the local council, Welwyn Hatfield borough council, can do to refuse it. I found it heartening to sit through the debate on the Sustainable Communities Bill because the Bill will allow the views of local residents to be taken into account when planning decisions are made.

I said that I did not want to dwell on the issue of supermarkets, but I hope that the Minister will indulge me for a minute. A matter of particular concern is bookshops, especially independent bookshops. I am sure that the Minister does not have time to read London Lite, a free paper that is handed out on the tubes and trains, but in yesterday’s paper it was suggested that there will be a price war for Harry Potter books and that people will be able to buy them for between £8.87 and £8.99 from many of the larger supermarkets. That is exactly £9 below the recommended retail price. I am particularly concerned that small local bookshops cannot access the book at anything near that price.

What happens is that small local bookshops survive off the back of, say, four blockbusters a year. That, in a sense, subsidises the specialist books that they stock. When supermarkets access books at a price that is completely beyond the reach of small book retailers, it puts the small retailers at a significant competitive disadvantage. That may push, and has pushed, many into liquidation. I hope that the Minister will take that concern on board when considering competition issues.

Although I am a great fan of independent shops and retailers, I recognise that they have no automatic right to exist. Supermarkets undoubtedly make life difficult for independents, but that is no excuse for just shutting up shop. Independent retailers need to go head-to-head with supermarkets in different ways. They need to offer their customers a quality shopping experience. They need to have committed and trained staff on hand to ensure that people who use local shops come back to them. One great advantage that local retailers have over supermarkets is that they have customer interaction—the Americans call it “face time.” Good local shops do not need loyalty cards or store cards to tell them what their customers are doing and to have a relationship with them, because they meet their customers daily. As a former marketeer, I am not convinced that small retailers are making enough of that contact to defend their position within communities.

Small retailers need to diversify their offerings. I spoke a moment ago about some of the problems faced by independent book retailers. An excellent shop in Hoddesdon called books@hoddesdon has branched out. Every month it invites an author to visit, and such visitors have included Jeremy Paxman, who came a few months ago, and Alan Titchmarsh. The shop rents out the civic hall and sells tickets—sometimes thousands of them—to people who want to meet and listen to the authors. Of course, the authors are delighted to turn up because they sell thousands of signed copies of their books.

In many communities, there are good local butchers. They always struggle to compete against the supermarkets, but although I have lived in my constituency for two and a half years, I cannot ever recall receiving a card or a letter from a local butcher saying, “We’re in the area and we have fantastic meats. Give us a call or come down and try some of our meat. Alternatively we will come and deliver it to you—yes, at a premium price, but it is of a quality that demands a premium price.”

A number of small pharmacists who are struggling to compete against supermarkets are examining ways of upgrading their offering. Some now have secure prescription delivery services. A number of them are building secure websites that allow people to order prescriptions remotely. Those are ways in which small retailers can secure their position in their communities, but I accept that even very good shops will occasionally fail. That is a great sadness, but it is the nature of the free market.

We as consumers must take personal responsibility for defending and supporting our local shops. Ultimately, it is we who decide their success or failure. We often hear about rural communities losing their shops because the people buying up second homes are addicted to supermarkets. However, those are the people who whinge the loudest when the local shops close down. If they used the local shops—if they developed the discipline to use the local shops—the very things that make village life so attractive would remain in those villages.

I, as a middle or perhaps even higher income earner, belong to one of the groups that get most agitated when things change. I am a reactionary, always manning the barricades against change. But because I am a higher income earner, I have higher rates of discretionary spend. If I want to defend my local shops in Cuffley if Tesco Express comes there, it is incumbent on me and Mrs. Walker to make sure that we set aside part of our family budget each week to spend in local shops. Signing petitions and manning the barricades is all very well, but too often people think that if they do that, they have done their bit. They have not. It is a long process. If we want to maintain vibrant high streets and vibrant local community shops everybody—Charles Walker and Mrs. Walker and all our neighbours—must get out there and spend some of their money in local shops with the people whom they claim to love and respect so much.

I thank the hon. Member for Broxbourne (Mr. Walker) for introducing this important debate in an informative, authoritative and lively manner, the basic message being that his family does not just talk the talk, but walks the walk when it comes to local traders. We had noticed, as he said, that his constituency contains the headquarters of Tesco. I was wondering beforehand, although he has given us great insight into his shopping experiences, how he makes that difficult, brave but bold judgment—the tea from Tesco, the extra virgin oil from the local shop, and the books, whatever their price, from the local book trader. I found that entertaining.

Any suggestion that I do not use London Lite is inaccurate—I do, although I find that the London Standard soaks up the vinegar more efficiently.

The Government recognise the importance of small and independent shops to the community and the sense of place that they create. All of us are trying to get the balance right between the need for vibrant town and village centres, and the popularity of the large supermarkets. Local stores are essential to sustainable communities. We are aware of the concerns about the future of the independent retailer, and there has been a great deal of publicity about the dominance of large retailers, such as Tesco and Sainsbury’s, and their relationship with their suppliers.

Let me assure the hon. Gentleman that the Government are committed to promoting the vitality and viability of town and village centres, and we will be sticking to our town-centre-first policy, while providing choice, competition and innovation. In doing so, however, we must not polarise the debate—the hon. Gentleman has been at pains to say the same thing—along the lines “big brands and supermarkets are bad” and “independent and small retailers are good”. Local areas can exploit links between brand retail and small independents, creating win-win outcomes for areas that are currently poorly served in terms of choice and affordability of shopping.

Government policy for town centres seeks to support an efficient, competitive and innovative trading sector, which will enhance consumer choice and meet the needs of the entire community, not least those communities where there are many people who are among the elderly.

Following the publication of Kate Barker’s review of land use planning and the planning White Paper, there has been a lot of publicity and concern about whether the needs test for new retail development is moving us away from the town-centre-first policy. That is not the case. I repeat that we remain absolutely committed to promoting viable town centres. The planning system has a real role in supporting thriving high streets, where small shops can succeed and provide real choice for consumers. Independent retailers add greatly to the character and vibrancy of our high streets, as the hon. Gentleman has forcefully pointed out.

We must ensure that we continue to have tough tests for new development that help us to protect and enhance our town and city centres as the bustling hearts of every community. We will require better assessment of how new developments will affect town centres, including the impact on high streets and local shops. We want to work with the industry and stakeholders to develop the best and most robust methodology for assessing the impact of new development proposals on our town centres. The Department for Communities and Local Government will consult on proposals over the summer.

Clearly though, local authorities will need to take account of regeneration, economic growth, employment and social inclusion when preparing their plans and determining applications. Those factors can be given significant weight in deciding whether to give planning permission for development. We will also need to consider how the planning system can best address competition and consumer choice issues.

Of course, the planning system is only one part of the story in encouraging local regeneration. Local traders can use innovative ways to increase their trade and catalyse local renaissance. I sympathise with the hon. Gentleman’s argument that it is puzzling that local retailers do not do more to publicise the importance of their shops. Budgens is a symbol group of shops, where the shops themselves are independently owned. Budgens proprietors actively encourage the shop owners to innovate in their use of space and product lines and in the services that they offer to customers in order to safeguard or expand their share of the local market.

Retail innovation is also being looked at more generally through the Government’s retail innovation group and its sub-groups, on which small retailers are represented. Through the group, innovation and technology is being explored as a way of harnessing improved productivity in the sector. Work includes gathering and disseminating case studies on how retailers have used innovation to trade advantage.

We have also introduced measures to benefit local shops through a new stronger code of practice making leasing shops and offices more user-friendly for small businesses. The new code will mean that small businesses get a step-by-step occupier’s guide to contract negotiations, which will help tenants to avoid the pitfalls of bad contracts.

The Government’s local enterprise growth initiative benefits local traders, too. It assists enterprise growth and improved business support, particularly in deprived areas and communities. As part of this, it can support activity to boost the viability and impact of small independent retailers. For example, in County Durham specialist retail advice is being provided to help local traders around a street market to build their businesses. Local authorities too have measures that they can use to encourage local shops. For instance, the business improvement districts initiative provides a mechanism for local authorities and local businesses to engage in additional services or projects to improve their town centres, all of which will benefit local traders.

Of course, many local traders are, almost by definition, small businesses, which are a vital element of the economy. Indeed, productivity growth in small and medium-sized retail businesses has outstripped that in large businesses. Moreover, small retailers with 10 to 49 employees have had such high levels of productivity growth that their gross value added per worker is now 14 per cent. higher than that of large retail businesses. I must admit that I was surprised when I read that figure, and I was rather encouraged by it, as the hon. Gentleman will be. Because of their importance to the economy, the Government have undertaken a range of initiatives to encourage the development and growth of small businesses, and small retailers can benefit from all those initiatives.

Let me say something about regulation. The Government are placing importance on creating the right environment for small businesses. Better regulation is key. While I recognise that regulation continues to be a topic of real interest amongst the SME community—rightly so—we should not lose sight of our success in this area. I am pleased to say that the proportion of SMEs citing regulation as the main barrier to success has fallen from 21 per cent. in 2002 to 14 per cent. in 2005, but we need to work harder on that agenda. Despite that excellent achievement, we remain committed to further reform to minimise regulatory burdens.

The Government are committed to “think small first” in developing new policies for business, and we have a clear plan to drive this programme forward. For example, we have made it clear that better regulation is an absolute priority. We have been the first Government to measure and quantify the administrative burden of regulation on business. We have published the results and committed to seek a 25 per cent. reduction by 2010. No other Government have done that. We have also ensured that there are just two annual commencement dates for new legislation to make it easier for businesses to keep track of incoming regulation. We are working closely with the Better Regulation Executive on the simplification agenda. With the introduction of the local better regulation offices, and through our work on the retail enforcement pilot, we are working to reduce the burden of inspection and compliance on small retailers.

Our achievements in strengthening SMEs and entrepreneurial activity are not just down to the regulatory environment: promotion of entrepreneurship is also critical. I will cite just a few examples of what the Government are doing. Driven forward by the Small Business Service, the improvements in the delivery of services under the Business Link brand continue to bear fruit following the transition from national to regional management. Our ongoing work to simplify the range of publicly funded business support schemes from 3,000—I must admit that that is a great deal—to 100 is making them easier to access, reducing confusion for business customers, making them more efficient to administer, thereby saving taxpayers’ money, and ensuring that they have a measurable impact on business and on the economy.

In welcoming the hon. Gentleman’s debate, let me say that through the measures that I have outlined, and others that I do not have time to discuss, we are promoting enterprise and creating an environment where small businesses, including the local traders whom he emphasised, can flourish. A thriving small business community, be it in retail or other sectors, provides the means to shift people and activity quickly into our economy. It is also the way to promote the smaller-scale sustainable communities in our town centres and village centres that the hon. Gentleman and all of us in the House wish to promote.

Question put and agreed to.

Adjourned accordingly at two minutes to Three o’clock.