[Mr Mike Weir in the Chair]
It is a pleasure to serve under your chairmanship, Mr Weir, and to have secured this debate on so important a subject. I welcome my hon. Friend the Minister to his position—this is my first opportunity to do so on the Floor of the House—and I know he will fill it with considerable distinction. When occasionally I give the odd, not criticism but constructive prod, I hope he will forgive me and take it in the spirit in which it is intended.
This afternoon is an opportunity for friends of the Government—those who support them—who represent market towns and town centres all around the country to draw to their attention the important predicaments, problems and issues that business people, particularly small business people and independent retailers in high streets and town centres, have confided in us. A great deal of hope is reposed in this Government.
On Monday, I attended a business breakfast with the Tavistock chamber of commerce. Broadly speaking, my experience is that local business people in my constituency—I would expect this to be replicated throughout constituencies in the south-west and beyond—are understanding of the Government’s economic policy. They perceive that dealing with the financial crisis that we inherited was the overwhelming priority for this Government. They understand that the necessity of controlling the deficit and getting on top of it was all-consuming, and that for the past six months Ministers in the Department for Business, Innovation and Skills, the Treasury and throughout the Government have been concentrating on that essential task.
Business people in my constituency are now looking for what the Government will do to stimulate growth. What will they do in terms of the range of measures available to them, given that they are hedged in by economic circumstances? What can they do to foster prosperity and to enable businesses to get going, which they will if they are given the means?
In respect of the high street—which I intend to concentrate on this afternoon, specifically high streets in market towns, four of which I represent—I want to have a word or two with the Minister and recommend several things. In doing so, I shall crib shamelessly from the Conservatives’ commission into small shops in the high street, on which I had the privilege of sitting, and which reported in July 2008. I am delighted to see in his place its distinguished chairman, my hon. Friend the Member for Northampton South (Mr Binley), who presided so expertly over that meticulous examination of all the issues that affect independent retailers. The commission included many people of great expertise, and I commend it to the Minister as a template for Government policy on this important subject, at least at the beginning.
The distinctive character of a town—its sense of place and individuality—is substantially created by the diversity and quality of the retailers on the high street who provide personal service and much of the town’s variety and interest to visitors. Empty shops, an increasing number of charity shops and dilapidated town centres affect the morale of a community. They deter visitors and lead to further decline. Last year, 12,000 independent shops closed.
I unashamedly declare that my focus today is on the market town. I have four of them in my constituency: Tavistock, Holsworthy, Great Torrington and Bideford, each with its own unique identity and traditions, and strong communities. Their business people are resourceful. In Holsworthy, they have joined together under the banner of the chamber of trade to create the Holscard, a loyalty scheme that entitles members who sign up and obtain the card free of charge to discounts and special offers.
Each year, the Tavistock food festival attracts a large number of local food producers who show off the extraordinary variety, sophistication and quality of food that our area has to offer. The chamber of commerce and other business organisations are active in supporting events that enhance the vitality of the town’s appeal to visitors. This Friday, Tavistock will have its Dickensian evening, which I strongly recommend to the Minister. It is great fun, and it heralds the real start of Christmas festivities in the town. The main streets are closed to traffic, all the shops are open until 9 pm, and the chamber of commerce organises a vast range of different activities: choirs, brass bands, a woodwind band, a fire eater, jugglers and morris dancers, to name but a few. Many of the shopkeepers dress up in Victorian costumes and hand out mulled wine to their regular customers as a way of thanking them for their custom throughout the year. There is a serious purpose to the evening. It attracts 12,000 visitors to the town who spend money in the local shops, and many return throughout the year. The town is also in the process of setting up a business improvement district.
Great Torrington’s rich civil war history provided the backdrop for its community development trust to set up Torrington 1646, a fascinating historical “time machine” which takes visitors, including schoolchildren, back to the days of the civil war and allows them to experience life in the town during that era. The trust has refurbished the Victorian pannier market to create a modern retail space and has enhanced the appearance of the town centre.
The Bideford 500 project to rediscover and promote the proud history of the town is well under way. It was in and from the port of Bideford that Grenville built his ships and set sail on his Elizabethan adventures, and some of the first settlers in America also started from there. The project complements the Bideford regeneration initiative that will redevelop important sites around the town.
I mention those few examples of the initiative, ingenuity and activity of local business people to demonstrate to the Minister that those communities have not sat back and declined to take responsibility for their own future. They are not without the will to seize control and to take into their own hands the initiative and responsibility for improving their lot, but they have not always felt that the Government, both local and national, have been on their side. It is to that end that I urge the Minister, after just six months in government, to bend his intellect and the resources of Government.
Times are tough. Small independent retailers and many other small businesses face increasing competition from the internet. They face often unfair competition from supermarket giants with their free out-of-town parking, and their ability to sell below cost to persuade customers through the door while they recoup the cost on other products. The Office of Fair Trading reported in 2006 that 1.8% of grocery lines were sold below cost. That sounds a small amount, but shrewdly shifting discount offers from product to product is a powerful commercial tool that represents a major disadvantage to independent retailers in the high street, as my hon. Friend the Member for Northampton South noted in the small shops commission report. In addition, of course, businesses cannot escape the inevitable difficulties of the prevailing national economic situation. Next year, VAT will rise to 20%, fuel prices are high, and shoppers are drawing in their horns and spending less.
As I said, I attended a business breakfast with members of the Tavistock chamber of commerce on Monday. I found a ready recognition of and support for the Government’s compelling priority of mastering the unprecedented peacetime deficit left by Labour. Not a single voice was raised against that Government policy in this crucial regard. The overall direction of our national economic policy is fully understood and supported by small business people.
I know that the Minister, together with my right hon. Friend the Chancellor of the Exchequer, is now concentrating on the measures necessary to stimulate and facilitate the private sector growth that will be essential to our economic recovery. The Minister’s Department will be central to that mission, as will others, and I venture to suggest to him that there needs to be concerted and co-ordinated action, in which all Departments, as well as local government, play a part.
In respect, however, of the vital need for leadership and the critical importance of local and national Government co-operating to support small businesses in town centres and on high streets, I have found apprehension, based not on the abilities of our Minister or on the willingness of our Government, but on experience of the previous Government. Small businesses are apprehensive about the necessary leadership being there to support the work they are doing to improve the situation. One local business man joked that the best way to start a small business under Labour was to buy a big one and wait. I am confident that the Minister and this Government will not be found wanting in that regard.
It is a great pleasure to serve under your chairmanship, Mr Weir.
Does my hon. and learned Friend agree that local government has, in fact, a major part to play in aiding small businesses? We have seen parking charges increase to the point at which they are stopping people coming into town centres, and there is no ability to stop and shop for a short period. There is piecemeal planning, which cuts out small units for people to start up, and there is an unrealistic attitude to rateable values, which is not directly related to local government but related to government more generally. Out-of-town development has become a much more valuable area in which to do business than many of our town centres, and yet town centres are still rated very highly. I could go on, but do we not need to draw to the Minister’s attention the import of local government, and the fact that it has hampered small and medium-sized businesses in our town centres for a considerable time?
As ever, I, regard my hon. Friend’s points in this, an area of expertise for him, as compelling and significant. There is no doubt that local government has a very important role to play, but national Government must give the lead, and I urge the Minister to act on that. We do not often talk about big measures but we often talk about small ones, which cumulatively can become a powerful support to high street shops and businesses. Planning is one example. Less than 40% of new retail space planned for the next 10 years is for town centres. The abolition of the need test for out-of-town supermarket developments in planning policy statement 6 was a retrograde step. I fully support that test and I urge the Government to consider restoring it, and I urge the Minister to discuss the matter with the Secretary of State for Communities and Local Government.
We should go further and consider inserting a diversity test into retail planning guidance. Small shops might have their own use class, so that they could receive the special consideration that their function on the high street deserves. Changes to the planning system regarding the need test, sympathy shown to small shops via the creation of their own use class, and a diversity test that would impose on planners the need to consider the balance between local independent retailers and vast out-of-town supermarket businesses and to give weight to the need for diversity on the high street, would be a positive step forward.
I am listening to the hon. and learned Gentleman with great interest, and I congratulate him on securing the debate. What he says about planning is absolutely right, and it is not just about large out-of-town supermarkets. In Milngavie in my area, we face a potential Tesco Extra right in the middle of the town, with another massive supermarket possibly in Bishopbriggs, and the small traders in those areas are very concerned about the potential impact on the viability of their businesses. The hon. and learned Gentleman might find that that is also the case in other parts of the country.
My hon. Friend’s experience is, I think, replicated in dozens of constituencies around the country, and I fully understand her concern. What I am asking for is a co-ordinated approach. The Departments for Communities and Local Government and for Business, Innovation and Skills, and the Treasury, need to get together and think about the high street as a separate issue. That would include looking at planning decisions and guidance, and considering what we could do about charity shops, for example.
I, too, congratulate the hon. and learned Gentleman on securing this very important debate. I also congratulate the Government on producing their document about a health check in town centres and on the high street. It is a valuable document, and of good use.
On charity shops, I had a look at the hon. and learned Gentleman’s website before I came here today. It rightly says that charity shops are better than empty shops, and I agree, but the proliferation of charity shops in my constituency of Rochdale has reached the point at which they become a problem. So in respect of planning regulations, I urge the Minister and the Government to consider giving local authorities the power to determine the number and location of charity shops in their areas.
I agree with the hon. Gentleman, to a large extent. The main issue that I have heard is that charity shops are selling new goods. More and more charity shops are setting up on the high street, and instead of selling the donated goods of many hundreds and thousands of well-wishers, they are selling a whole range of brand-new goods—often sports goods and clothing.
It is not hard to understand the chagrin, confusion, dismay and disappointment of a shopkeeper, selling the same product lines, on hearing that the charity shop next door has been given not only the mandatory 80% relief, but the other 20% that the local authority can give. The charity shop might, therefore, be paying no rates at all. Its waste is treated as commercial, but the private shopkeeper is unable to have their waste treated thus, and it would seem to the struggling shopkeeper—who, after all, will be here in many years and is supplying a vital service for the community, bringing about a sense of well-being and contributing to the local economy—that the playing field is not even.
I do not suggest, as the hon. Member for Rochdale (Simon Danczuk) noted, that we should be anti-charity-shop, but I do propose to the Minister that we need to look at a protocol for local authorities, which would allow them to consult local shopkeepers about the product lines that might be sold in a charity shop. Such consultation would help, but equally we need to look at whether charity shops that are selling brand-new goods should receive the rate relief that they currently do.
Does my hon. and learned Friend not also agree that on the non-regulatory side there are things that the Government could do, simply by using their influence? For example, there is the established practice of upward-only rent reviews, which informs the rates charged in town centres. I urge him to highlight that issue and, on the regulatory side, to ensure that the free parking from which out-of-town retailers benefit is properly valued, because of the consequences that it clearly has for their competitors in town. Free parking gives out-of-town retailers an enormous advantage, and that is not properly reflected in their rating levels.
My hon. Friend has, with uncanny empathy, predicted my next set of points, although he did not express them with the same eloquence as I would have, and probably not the same passion. I shall, therefore, go on to make the points, and a few others besides.
Rents and rates are a vital issue for high street shops and independent retailers, and my hon. Friend makes a very powerful point about upward-only review clauses. I would welcome the Government’s investigation of that issue, because the Conservatives’ commission into small shops in the high street recommended that we examine it to see whether we could make inroads into the unfairness. I want, however, to come on to rates.
I hear about planning, rates and charity shops, and rates come up time and again when I talk to small businesses in my constituency. The system is byzantine; it is incomprehensible. Walking into a local business, I sometimes find that the pub or petrol forecourt, for example, has had its rates lifted by thousands of pounds in the past year or two. In 2009, there was a 5% rise for inflation. A transitional relief scheme came to an end, so shopkeepers and business people were hammered by large rate rises.
However, the small business rate relief has not kept pace. Many businesses that are regarded as small—we would all regard them as such—are no longer covered by the relief. I urge the Government to consider raising the threshold for that relief. The Government could, importantly, immediately and urgently, translate the Conservative manifesto commitment, with which I have no doubt my Liberal Democrat friends will agree, to make small business rate relief automatic. It should not depend on an application. The rate authorities are able to see whether a business complies with the conditions necessary for small business rate relief, so why do they not simply apply it?
I implore the Minister to lend impetus to our examination of this issue. If we can raise small business rate relief, increase its threshold and make it automatic, we will do a lot to cause a sigh of relief up and down high streets.
I congratulate the hon. and learned Gentleman on securing this debate. I share many of his concerns. Does he believe, as I do, that many small businesses in our town centres face a double whammy when a national chain locates in the town centre, often selling the same products as smaller companies, but at a lower price? The rates for those smaller companies increase because the big national has come into town and allegedly increased the footfall. So those smaller companies lose both ways: their rates go up and their ability to sell cheaper goods goes down.
I do not want this debate to appear a depressing, gloomy litany of problems for the high street. I prefaced my remarks with the kinds of initiatives that communities throughout the country are showing—business improvement districts, taking on regeneration and community trusts—as they fight to sustain their towns and town centres. All communities will have a similar interest.
I agree with the hon. Member for Vale of Clwyd (Chris Ruane). The small business in the high street needs special consideration from the Government. That is why I make my proposal to the Minister today and ask him to reflect on it.
On Monday, I met representatives at the Tavistock chamber of commerce and one trader said to me, “Mr Cox, 25 shops in Tavistock are currently unoccupied. Why should we not grant a rate-free period for a small business that is willing to take on one of those shops, with phased gradations up to the full sum, say, over three or four years?”
The Minister could adopt that measure, which would greatly benefit businesses setting up in our market towns throughout the country. Nowadays, they could probably get a rent-free period, but why not enable the local authority to grant a rate-free period? If we did that, it would be a small measure, but its overall effect would be disproportionate and would impact on the confidence of businesses to enter the high street, off-setting some of the difficulties that the hon. Member for Vale of Clwyd mentioned a moment ago.
May I thank my hon. and learned Friend for securing this debate? The gist of his speech is specifically about market towns, but my constituency is particularly marked by the number of empty shops. The point that he mentioned has been raised by shopkeepers, entrepreneurs and landlords in the centre of Wolverhampton. Giving relief on empty shops when new tenants are coming in would be a constructive way to take the issue forward.
I agree with my hon. Friend. In fact, I would go further and place in the hands of local councils the ability to grant a temporary rate relief for new businesses.
My right hon. Friend the Chancellor of the Exchequer has already introduced in the Budget a number of measures for new business and start-ups. It is a critical priority for this Government. But we could help shops setting up specifically in the high street. They are so valuable and important to the overall welfare and well-being of the towns that we represent. It would be a simple measure that would, cumulatively with others, have a powerful impact. I want to mention other measures, but I want to sit down soon because I am interested in hearing the experiences of other hon. Members.
The measure that I have proposed is consistent with the overall philosophy of this Government, which is to place into the hands of local communities’ councils the power to do something about the fabric and infrastructure of their communities. I urge the Minister to consider that measure.
Whenever one mentions high street shops, issues arising always include parking. I am dismayed and disappointed at how often local authorities, particularly county councils, seem to use parking as a generator of revenue. Time and again the national Government have urged local government—often with a measure of disingenuousness, given the fact that they have starved local government of the means with which to do its work, while piling extra responsibilities on it—
This is not meant to be a partisan point. I am not, on this occasion, having a jab at the previous Labour Government. I apply this point to all Governments.
So often, Governments say to local government, “You should be doing this and that”, but do not provide the wherewithal for local government to do it. Local government has to understand that it is no use proposing new and ever-increasing parking charges and not expecting to deal a blow not only to the morale and confidence of traders, but to their economic interests.
Good parking, easy access and quick-stop parking, as the commission headed by my hon. Friend the Member for Northampton South called it, are vital to the health of the high street. It is essential that, in our constituencies, local government consults traders, stands by their side and designs parking and transport systems in a way that helps traders and does not simply generate cash from the consumers and customers on whom they depend. That is an easy statement to make.
I am dismayed that Devon county council, a Conservative council, proposes parking meters throughout the county towns even though that is inappropriate in some towns. Towns are struggling on the edge—the precipice—of economic viability, and to add extra charges for parking when people could go down the road to out-of-town free parking, as the hon. Member for St Ives (Andrew George) mentioned, is an extraordinarily crass, clumsy action. I urge Devon county council to think again or at least ensure that its consultation is real and that it tailors any parking schemes to the economic interests of the high streets in the towns on which it intends to impose those charges.
It is vital that we get parking right. Not only must we have a sensible parking regime, with different structures for times of day and the ability to park free for up to an hour, which are vital, but it must be enforced sensitively. How many times, when one goes to the local town council—hon. Members may have heard this—does one hear them say, “If only we could just enforce these things relatively flexibly and intelligently”?
The memory of getting a £40 or £60 parking ticket in a town stays with the visitor. They are not likely to look favourably on the town if, after a few minutes, they get a parking ticket for overstaying. It is crucial that local governments understand such things, and I believe that the national Government can set a lead with advice and guidance.
To that end, I agree with the hon. Member for Rochdale, who mentioned the high street health check issued by the Department for Business, Innovation and Skills. That is an interesting innovation; I do not believe that it is anything more than a start, but it is certainly worth doing and I urge the Minister to follow it up. I have read the document with interest and it touches on some important issues. We need that kind of leadership. We need local leadership supported by local authorities and underpinned by encouragement and leadership from the Government.
This should be a crusade. I want to paint for the House a picture of the Minister on his white horse, dressed in shining armour and shouldering his lance.
He does not have the hair to be Lady Godiva, although he has a fine head of hair none the less. Picture him riding out on his white charger, shouldering his lance and flying the flag for the high street. I know that the Minister is a Cornishman, and speaking as a Devonian, we look across the Tamar river with admiration, regard and not a little envy. The sum of £132 million is being spent on the good people of Cornwall—and by Jove they deserve it—joining up every village, town and community to super-fast broadband. The people of my constituency are like small children pressed up against the window of the pie shop, envying the sight of the riches within.
Broadband is important, and in Cornwall people are getting access to that wonderful opportunity—as a Cornishman, the Minister will be delighted with that. In market towns, high streets and small businesses in the wider area, broadband is crucial. However, in parts of my constituency, people can barely get half a megabit, and the best speed is about 5 or 6 megabits. We will look at speeds of 100 megabits in Cornwall. I do not know about Devonwall; we might even apply to join. Tremendous advantages can be conferred by broadband, and I urge the Minister to remember the Government’s commitment.
On that important point, is the hon. and learned Gentleman aware that more than half of small businesses rely on the internet for up to 50% of their annual turnover? It is crucial for the Government to bear that in mind.
We can join across the House in the nicest possible way and agree that that is a critical issue for small businesses, not only in the high street but in the rural areas that I represent and in cities and towns across the country. It is a particularly important issue in Torridge and West Devon, where the broadband service is poor. Across the border, however, there will be a wonderful broadband opportunity. We are committed to rolling out fast broadband by 2015, and I urge the Minister to accord that due priority. A combination of those things will make the difference to the high street.
My hon. Friend the Member for Northampton South, who is no longer in his place, recommended in the Conservative commission into small shops in the high street that we should look at a community hub enterprise area that brings together all partnerships and schemes under one simple banner, thereby enabling the Government to support them. I commend the recommendations of that 2008 commission to the Minister. I humorously referred to him as a white knight, riding out in support of the high street. In his response, I hope that he will make it clear that that is what he intends to be.
Order. Several hon. Members are seeking to catch my eye. I hope to start the winding-up speeches no later than 3.40 pm, and I hope that hon. Members will bear that in mind. Those intervening should remember that interventions should be brief. Some have been pushing the envelope a wee bit.
Apologies for my late arrival to this important debate, Mr Weir. As I said in my intervention, I share many of the concerns that have already been expressed.
Eight years ago, I convened a meeting on improving the retail sector within my constituency. I asked Professor Michael Carley of Edinburgh university to address my local retailers. He had just conducted research into 14 successful town and city centres around the UK, including market towns, seaside towns and inner cities. The meeting heard that a successful town centre needs three crucial things: first, it should feel safe; secondly, it needs to be clean; and thirdly, it needs affordable and accessible car parking—that point has been addressed in full by the hon. and learned Member for Torridge and West Devon (Mr Cox).
We have had 13 years of a Labour Government, but those issues have not been addressed in my town. It does not have a Labour local authority but an independent Conservative local authority, and although we have had the Welsh Assembly Government and 13 years of the UK Labour Government, the problems were not resolved. I hope that they will be resolved under this Government, although I fear that they will not.
Absolutely. One reason is that local government faces a 40% cut to its budget. Many issues that need addressing, such as those of having a clean, safe environment, are functions of local government. In my area, Denbighshire, the funding will not be there. The local government is already offloading those functions to the town councils, but they do not have the funding either. If the environment is not clean, visitors will not be attracted.
We have made great strides over the past two or three years in my constituency. I could see the quality of the environment declining, so I put my town forward for “Wales in Bloom.” That was before the big society was mentioned, but we got 60 local organisations such as schools, Churches, banks, businesses, Nacro and the probation service. They all pulled together, and we came third last year and second this year—hopefully, we will be first next year.
However, people will not actively take part in improving their local environment if they think that the local authority is passing the buck and saying, “Will you do this for nothing? We are not going to pay for it anymore.” We cannot engage and have the big society if people feel that they are being used. A clean environment is essential, and the engagement of the public, private and voluntary sectors is key.
Let me pay tribute to the work of the probation service in my constituency. The community payback team has probably done as much work as local authority workers to improve the quality of the town. That is a great way to go about things. They are young men, and a few young women, who would perhaps have been sent to prison or an approved school. Instead, they were told to pay something back to the community where they committed a crime. Those people are tending the gardens, making the flower beds and engaging with the community.
If we are to reduce the number of prisoners, we need to get offenders working in the communities in which they committed the offence. I support the Government on that. I would not like to see people who have committed offences in poorer communities being taken away and made to work in a leafy suburb or town. I pay tribute to the community payback team that has done so much in my constituency to improve the quality of the environment, and to the local government workers who, on diminishing budgets, year after year, pulled out the plugs—indeed, planted the plugs—to make Rhyl the second best town for its size in north Wales according to “Wales in Bloom”.
The second issue is that of a safe environment. The west ward in Rhyl had 900 houses in multiple occupation and a high crime rate. Over the past 10 years, that has come down dramatically and of the 376 crime and disorder reduction partnerships in England and Wales, the county of Denbighshire, in which my constituency is located, was the third best performer. That was done by adopting a neighbourhood approach to crime and disorder reduction partnerships, with everybody getting around the table together and saying, “This is not just a policing issue; it is about social services, education, prisons and getting people back to work.” That is how we got on top of crime in my constituency and reduced it dramatically.
I do not want to be too party political, but we may be facing 20% cuts in policing. Last week, my hon. Friend the Member for Wrexham (Ian Lucas) joined me at a meeting with North Wales police. All the AMs and MPs in north Wales were invited, but I am afraid that no Conservative MP or AM attended. We were told that the number of police officers in north Wales will be cut by 200, from 1,600 to 1,400. The number of support staff, including police community support officers, will fall by 250. We cannot have cuts of that calibre without affecting front-line policing. I fear that the cuts will fall hardest in the poorest communities, where crime rates are highest. If we have these huge police cuts, that will make my task of helping to regenerate my town centre more difficult.
The third issue that I want briefly to address is affordable and accessible car parking. Again, the person in charge of the county’s finances is a Conservative councillor. They control the purse strings and thought that it was a good idea to stick up car-parking charges, which grew and grew over 10 years. The authorities use them as a milch cow, but I fear that they have killed the goose that laid the golden egg. Statistics from my local authority show that car parking increased until about five years ago, but then steadily decreased. I would not mind if the authorities ring-fenced some of the money from the huge car parks in Rhyl to improve the environment in the car parks or the town, but they do not; they cream the money off and do not put it back into the community to improve the shops or the retail offer.
We have such things as loading bays. I am not sure whether anybody knows what a loading bay is—I do not. I do not know how long someone is allowed to stay in one, whether they have to put their lights on or whether they have to put a message in the window. However, people get fines time and again. As the hon. and learned Member for Torridge and West Devon said, they leave the town very disappointed. Local councillors have said, “These are seaside towns. We need to sting the visitors rather than the locals for the car parking.” I do not think that we should be stinging anybody. We should look at car parking as a way of enhancing the retail offer in our communities, not as a way of punishing people or taking money from one area and gifting it to another.
That was just my short contribution on the environment, policing and safety, and car parking. If we can get on top of those issues, we will be doing well. I congratulate the Government on their excellent document, which I have only just seen and browsed through. It is a great little document, and I will take it back to Wales to see what we can do with it. Once again, I congratulate the hon. and learned Gentleman on securing this important debate. I hope that the Minister is listening, because we will be watching.
After such a bravura performance by my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), it is with some trepidation that I contribute to the debate. This is a very worthwhile topic, and I would like to contribute my view that the solution is a matter not just of what local authorities can do or what the Government can do—as has been said, many of these issues are within the hands not of the Minister, but of a number of his colleagues. The solution is also in the hands of people. In that respect, we can look at the role that the big society can play for small business, because I think it has a place.
In the south-west, we have a high number of small businesses; indeed, 91% of businesses employ fewer than five people. This debate about the small retailer is therefore crucial to us. Unlike my hon. and learned Friend, I will include the small villages in my constituency —there are 30 of them alongside the four towns—because these problems also exist in those villages. Small retailers, particularly in those small villages, are the lifeblood of their communities. They can be like the local pub, which is too often long gone. They can also be like the local post office, which is, again, too often long gone. I am therefore pleased that local residents in Stokeinteignhead have come together to found and now run a volunteer system to keep the local shop in their community. That helps elderly residents, who will come in—perhaps a little confused—to do their shopping. The shop also produces newsletters. It does all sorts of things that mean that that small retailer is at the core of the community. I reinforce the points that have been made about colour, diversity and, indeed, identity, which we need to retain not only on the high street, but in villages. That is a key issue.
The Independent Retailers Confederation has looked at the issue and come up with a number of thoughts, which I can perhaps share with the Minister. The confederation represents 100,000 small businesses, which is no small number. It has categorised its findings into five key areas. I will not spend a lot of time on each area, because hon. Members have already covered a lot of these points very well. In fact, there are six areas, and I want to explain what they are. They include planning, which we have touched on; skills training, which we have not touched on, and which I will come back to; regulation, which we have touched on in part; crime, which we have also touched on in part; and access to finance. To that list of five, I would add taxation. Business rates must, of course, be key. I will go briefly over each of those subjects.
On planning, there is clearly an issue about the power of the supermarket. There is also the issue of charity shops, which has been well rehearsed. When the Secretary of State for Communities and Local Government begins to look at the overall shape of planning, I want him to consider localism and the power that he intends to give to local communities to make proposals for plans and for what they should look like. I would encourage him to ensure that the plans consider not only housing, but businesses. We will help to shape the planning of our communities if those plans look at businesses as well as residential. If they do that, they will say, “We want one supermarket here, not two.” In one town in my constituency, Dawlish, we have an ongoing battle between Tesco and Sainsbury’s, which is a waste of taxpayers’ money and deeply frustrating for local residents.
I would also commend the greater use in our communities of the community land trusts. We look at them just as vehicles for residential, but they are equally appropriate in this context. I would encourage the Government to market such things better and to explain to local communities what they can already do.
On parking, which, if I may, I will envelope within planning, there are a number of very good schemes in other parts of the country—I regret that they are outside Devon—that combine the idea of a loyalty card with the idea of sharing parking. I absolutely take on board the point that local authorities will often use parking as a milch cow. However, there are schemes that allow shops, working with the local authorities, to increase the revenue and put some of it back into the local community. I commend those ideas.
Does the hon. Lady agree that of all the six critical factors that she is speaking about, parking is the most important, because it shapes what happens in the town? There is not a one-hat-fits-all approach, whether we are talking about out-of-town, out-of-town-centre, in-town-centre or off-town-centre parking. The chamber of trade must be involved in these issues. There is also the issue of the connection between the centre of the town and the edge of town and the issue of regeneration. There are many things to be done, and the same hat does not fit everything when it comes to planning.
I thank the hon. Gentleman for his contribution. I think that that is an issue, but it is not the most important one, as I will explain.
The second issue is Training Access to training for retail skills is pretty rare. I am pleased that South Devon college, which is in my constituency, has a course on retail skills, and I would like the Government to encourage more such courses.
Let me move swiftly on to the third issue, which is regulation. As I am sure many Members are aware, it is estimated that it takes the average retailer seven hours a week just to deal with regulation, and that can cost them anything from £100 to £10,000 a year. This is about not just employment regulation, which is clearly one of the most onerous issues, or health and safety, but issues such as the minimum wage and how pension schemes will change. We need to look at the perhaps unintended consequences of the new shape that regulations will take when the Government put them forward.
The fourth area is crime. This is probably a well-known statistic, but crime and theft cost the retail sector £2 billion a year nationally. Two issues have been raised by the Independent Retailers Confederation: one is antisocial behaviour, which has been covered by the hon. Member for Vale of Clwyd (Chris Ruane); the other is theft. The challenge in dealing with the problem is that a theft does not happen until the culprit leaves the premises. How many small shopkeepers wait until the individual has left the shop to apprehend them? The answer is that they do not. They keep the individual there and call the police. The result is that there is no prosecution and police time is not particularly well used. There must be a better reporting method, and it must be possible to find a legal approach that is a better deterrent than the system we have now.
I am saddened that only two of the large banks are making significant progress with the lending guarantee scheme, and I look to the Minister to encourage more on that front. However, something that the banks suggested, which I think is very helpful, would be the introduction of a new mentoring system that would ultimately replace, in a way, much of what Business Link, which is being phased out, used to provide. That would provide excellent support for the retail sector. I suggest that such mentoring should be something we can see—the big society for small business in action. In my constituency I have considered getting local businesses together and asking them to help each other. Business surgeries are being set up, and local business men and women, as well as local banks and others, will be involved.
We are also setting up a group of individuals who will act as one-on-one mentors—not expensive, paid-for, qualified mentors, but local business men next door to other local business men. For example, the other day a business man wanted to become VAT deregistered and did not know how to go about it; a colleague had the answer. There are all sorts of things that we can do, and politicians can play a role in our communities. I am pleased to say that I have a great deal of support from my local chambers of commerce.
I am pleased to serve under your chairmanship, Mr Weir, and congratulate my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) on securing the debate. Given that banks are not lending as much as before, and small business is being starved of cash, does my hon. Friend the Member for Newton Abbot (Anne Marie Morris) agree that stricter regulation is needed in relation to corporations having to pay suppliers within a very short time? Often, smaller businesses get penalised much more for delays in paying tax and VAT. Does that need to be reviewed?
That is a valuable contribution on an important issue, and I am sure the Minister and his Treasury colleagues will take it into their thinking.
My hon. Friend’s intervention leads me neatly on to taxation and business rates. I take on board the points that were made earlier about timing, and the fact that we have revalued at exactly the wrong time, when the market is in recession, with figures from when the market was at its peak. I am sure that the Minister and his Cabinet colleagues have taken that on board and will consider it. However, I offer congratulations to, I think, the Treasury team, on thinking about a holiday—100% relief—between October this year and next September from business rates where rateable value is less than £6,000. That is an excellent thing to do, and I commend it. I would like that to be extended, if it works well.
Hon. Members will be pleased to hear that I have now covered my six areas.
Many retailers, especially in my constituency, which is very dependent on small businesses and retailers, feel frustrated because when Governments—of all colours—decide to help them, they often do it by promising to reduce corporation tax. However, small businesses are often sole traders and partnerships. There is great frustration because, when corporation tax is reduced to help small businesses, they face increased national insurance contributions.
I thank my hon. Friend for that intervention, which follows on from one I made in the House yesterday. I agree that small businesses need some help. I should like the holiday that has been extended to new businesses to be extended to what I would describe as micro-businesses—those small businesses with one or two employees that find it a significant challenge to take on a third employee. I entirely understand his point.
There is much to be done. The sector is a very valuable one. May I commend to the Minister the idea that there is such a thing as the big society for small business? He might want to consider how to promote that. Finally, micro-businesses deserve particular attention, and the retail sector provides a good example. There is a very large number of such businesses, and whether the issue is tax or regulation they need special care and consideration.
I, too, congratulate my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) on securing the debate, and on a vibrant speech.
Adam Smith, the father of modern economic theory, asserted that Britain is a nation of shopkeepers.
The Opposition may disagree about who said it first, but I assure them it was indeed Adam Smith.
It remains widely recognised that the small and medium-sized enterprise sector today will play a pivotal role in the recovery of our economy—and rightly so. All hon. Members will be familiar with tales of the local independent retailer who goes that extra mile to take care of their community. They provide essential services and fulfil the retail needs of those who are less mobile and most vulnerable. The idea that independent retailers are the heart of communities will not come as a revelation to most hon. Members present for the debate—if it does to any of them. Despite that, in February this year the Local Data Company reported in a study that one in eight high street shops lays empty.
The economic slowdown clearly had a role to play in the shuttering up of our independent high streets, but there are far more fundamental causes, which will not reverse with the advent of economic recovery. The report cited a combination of rising business rates, soaring rents and draconian parking restrictions as being to blame, and I know from speaking to my constituents in Hove and Portslade that the study paints a pretty accurate picture. However, my constituents would all add one key issue to the list: the massive over-regulation that the sector endures. Government’s role is to ensure that causes are identified and that there are market conditions that foster an independent retail sector. There is a balance to strike between deregulation and positive and protective legislation. I believe that the Government’s challenge is to sift through the deluge of regulation that we inherited.
Some hon. Members may know that I have recently been vocal about the tobacco display ban. To recap, that legislation was brought in without the benefit of a small business impact assessment. The cost to the independent retail sector of implementing it is assessed at £33 million. Independent analysis shows that in countries where the ban is implemented small shops are disproportionately affected and there is no health benefit. Indeed, it is estimated that 2,600 small shops may close as a result of that legislation alone. At the moment the Government do not have any plans to carry out an evaluation of its impact. Overturning that inherited legislation is but one example of the right and appropriate path of deregulation needed to protect our independent retailers. If we do not do so, our nation of shopkeepers will become a nation of clone towns, with local shop models of supermarkets replacing the traditional British independent offering. The Government are currently reviewing the legislation and I urge all hon. Members to speak to the Secretaries of State for Business, Innovation and Skills and for Health and to register opposition to that over-burdensome, soundbite regulation.
As late as July this year the London assembly added its voice to the many expressing concern for the sector in its report, “Cornered Shops”. The report indicates that 7,000 independent shops shut in the last 10 years alone—or 13 a week. That marks a long-term decline, exacerbated by the recent economic crisis and punctuated now by a continuing lack of access to credit, which we have heard about today. We all recognise the frustration at the fact that, after the bail-out of irresponsible bankers, those bankers are not doing their bit to lend to small businesses and kick-start the economy. Something needs to be done to ensure that access to credit is made simpler for independent and viable retail offerings—and quickly.
We have seen the rise of supermarkets in the past 10 years, and there has been an aggressive expansion in the past few years into the local stores format. Our planning law needs to recognise and cauterise that practice, which is slowly bleeding out our independent high streets. Planning law needs a sustainability test, under which multiple chains would need to demonstrate that any proposed application would not adversely alter the mix of small, medium and large stores on high streets. Supermarkets account for a massive 75% of the market and 80% of independent retailers say that multiples are the single biggest threat to their livelihoods. I certainly do not advocate getting rid of supermarkets and propping up failing independent retailers for the sake of it: both have their place in a healthy and modern economic mix; they are not mutually exclusive.
Although this is by no means atypical of the operating experience of all independent retail sectors, I shall give just one example of how the scales are tipped against newsagents. The National Federation of Retail Newsagents, and newsagents in my constituency, have told me that one of their biggest problems is the lack of control that they have in the newspaper supply chain versus supermarkets’ buying power. We need to protect our independent high streets, which are far more vulnerable than the multiple retailer end of the sector. Once they are gone, they are gone for good, as are the friendly face of our local independent retailer and the heart of our community.
I recently went to the ceremony for the independent achievers awards, which celebrated best practice in the sector. The energy in the room was electric with the buzz of the best independent, innovative retailers regaling one another with stories of how they had adapted to support their local communities and build up successful businesses. That is the sense of pride and enthusiasm that we need to regain.
Our independent retailers work long hours, seven days a week, all year round, only to combat increasing costs, aggressive competition from multiple retailers, decreasing profits, increasing bureaucracy and decreasing access to credit. We need to reinvigorate the small business sector with a package of measures. Scrapping the tobacco display ban would be a good start.
I shall be brief because another hon. Member wishes to speak before the start of the winding-up speeches. I congratulate the hon. and learned Member for Torridge and West Devon (Mr Cox), who spoke with passion, knowledge and humour and is a true crusader for his cause. I particularly agree with him on rates. The Liberal Democrats would like eventually to move to a system of site value rating, but I totally agree that raising the threshold at which rates are paid would be a good start to help retailers. I believe that the Minister will confirm that automatic rate relief is in the coalition agreement and we will be implementing it soon—the sooner, the better.
The state of the country is very bad. As the hon. and learned Member for Torridge and West Devon mentioned, 12,000 independent shops closed in 2009. When people buy their consumables in the local economy, 50% to 70% of that money stays in the local economy. If they go to a large retailer, £7 of every £10 that they spend will leave the local economy. It is therefore very important that the Government give a lead on public procurement. There is a Government aspiration that 25% of procurement will come from small businesses. What is the proportion now and what steps are we taking to achieve that? I commend the Federation of Small Businesses, which has been a tireless campaigner on this matter, particularly with its “Keep Trade Local” campaign. That has been tremendous.
I want to ask the Minister a couple of other questions. Many retailers export, but when I was reading the Department for Business, Innovation and Skills business plan the other day, I could see no mention of support for retailers or small businesses seeking to export—unless of course it is arms that are being exported, which seems to be all right. Also, the hon. and learned Member for Torridge and West Devon talked about the local government role in assisting small business. It has been perceived in the past to be more of a hindrance than a help, although I am sure that that was not intentional.
I want to make the point about local government in relation to Rochdale. About two years ago, I suggested that Rochdale council introduce free parking across the town centre. It eventually introduced that a few months ago, with much reluctance on the part of senior council officers—it is not so much elected members who are the issue. I have to put it on record that the credit goes to a Conservative councillor, Ashley Dearnley, who had to drive that change through the local authority. Free parking on a Saturday is not the complete solution, but it does help.
Absolutely. I could not agree more with the hon. Gentleman. The point of local government is to show good political leadership.
The hon. and learned Member for Torridge and West Devon talked about the needs test and the local interest test, which would be a tremendous help. If we had that now, we might not have the situation that we have in my constituency of Solihull, where a huge Asda is being built on 3 acres of parkland on the main shopping street of Shirley. Will that stimulate custom for small independents on the rest of the high street? I doubt it. I think that it will bleed them dry, but we shall have to wait and see.
I welcome the help that the Government are already giving. With regard to regulation, we have the one-in, one-out policy and the sunset-clause policy and all the other aspirations that we are moving strongly towards. I would like to suggest consideration of small business as an automatic part of any pre-implementation review of new regulation and of the post-implementation review. It would be very good to build that into whatever legislation we produce.
With regard to the banks, I have a constituent who has an independent retail company. She applied for some help from the banks and was told, “Sorry. You’re in the wrong sector.” My right hon. Friend the Secretary of State for Business, Innovation and Skills is examining that, and I hope that he has a good go at ensuring that the banks give small business, independent retailers and everyone else who needs it the help that they deserve.
Thank you, Mr Weir; I will be on time.
I congratulate my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) on securing this excellent debate. It has captured the interest of so many hon. Members both because of the subject and because of his engaging delivery.
I am a big fan of small shops, for a number of reasons. First, I am the vice-chair of the all-party group on small shops and I am a member of the all-party retail group. I also come from a family of small business shop owners. I have many happy memories of growing up in the back of my parents’ wool shop, which was very handy in these colder days.
That is right. As has been said, small shops provide diversity but also character and interest to the high street. My local authority, Swindon, is embarking on trying to secure significant town-centre regeneration but, ever mindful that we will always be competing with Oxford, Bristol, Reading and Bath, we need something that sets us apart from those other towns as potential shoppers head down the M4 and choose which ones to go to. Through small independent retailers, we can have that unique offering.
I shall start by being positive. A recent BBC TV programme was called “Mary Queen of Shops”. I am a big supporter of the idea that she put forward, which was that it is not all doom and gloom and that many retailers need to embrace changing customer expectations. I shall use just two quick examples, one of which was a struggling greengrocer’s that was very quiet in the daytime. She encouraged the people at that greengrocer’s to go out and get orders for delivering vegetables to people’s doors. In the daytime, when they were quiet, they could pack those boxes, and that increased their income significantly. The other example came from an area in the south-west that was a tourist attraction—I forget the name of the place—where there was a struggling convenience store. She had the store redesigned so that it became more old-fashioned, to buy into the tourism aspects of the area, and encouraged it to promote local produce, which had a story, and to have events inside the store. Again, that increased business.
There is a part that retail has to play; it is not just the Government and local authorities that have to act. However, there are other challenges. Many hon. Members have mentioned the banks. I get very cross when banks say to me that they are doing their bit; they have signed up lots of customer relationship managers. In my experience, they do not have the relevant business experience and they still rely on the computer, which all too often says no.
I support the comments that many hon. Members made about rates. In other debates, I have urged us to ensure that there is some flexibility in the rates system. We have so much spare capacity with empty shops and, using the rates system, we can help to attract the next generation of small retailers. That would not only tackle ghost high streets but create new employment opportunities, and surely a small rates contribution is greater than none at all.
I agree with many of the comments on parking. I am delighted that my local authority has cut parking charges and seen footfall and income increase, although I have just one proviso before we bash all local authorities. There was a lot of emphasis by the previous Government on encouraging green travel, which, perversely, encouraged councils to make it harder for people to park in their town centres.
Finally—because I am conscious of the time—I echo the support for the Conservative small shops commission, chaired by my hon. Friend the Member for Northampton South (Mr Binley), who has now left the debate. We should embrace and deliver the thrust of that, to restore pride and life to our high streets.
Welcome to the Chair, Mr Weir. I congratulate the hon. and learned Member for Torridge and West Devon (Mr Cox) on securing this valuable debate. I commend all hon. Members for their brevity and their comradely manner in allowing everybody to contribute, which has made the debate all the better.
This is an important issue for all hon. Members, whether they represent towns, cities, villages or a combination of all those elements. Independent retailers are important in all communities, as is clear from the debate. We all recognise that we are in a difficult economic situation that has hit independent retailers hard over the past couple of years. However, there has been a decline in independent retailers in our communities over many years because of supermarkets, the increased use of private transport, differing demands and changing consumer habits. We must recognise that it is not only Government behaviour that has changed people’s use of independent retailers; it is a product of the different way in which people shop. The independent retailer network recognises that and successful independent retailers are consequently more flexible in their shopping times and offer greater quality and reliability in their products. Many are competing successfully with supermarkets by offering innovative and distinctive products that people want to buy.
All the speeches that have been made are worthy of comment. The hon. and learned Member for Torridge and West Devon has a long record of campaigning on this issue. He spoke clearly and eloquently about his community. On broadband, the Labour Government’s commitment of at least 2 megabits by 2012 has been removed by the Liberal-Tory Government. Unfortunately, his community will have to wait longer for satisfactory broadband services. I am sorry that Devon is not progressing as quickly as Cornwall. It is unfortunate that that commitment, which would have helped villages and smaller communities, has been reneged upon.
My hon. Friend the Member for Vale of Clwyd (Chris Ruane) spoke about Rhyl—few people know more about Rhyl than he does. He spoke of the importance of safety, cleanliness and presentability to all communities. We all recognise and value those things. It is important that communities are safe and we should recognise the important contribution that CCTV makes in our communities, including in my community of Wrexham.
The hon. Member for Newton Abbot (Anne Marie Morris) mentioned theft from shops, which is a big problem for smaller shops, where there are often fewer members of staff. It is clear that CCTV makes a major contribution to tackling that problem. I would not like to see the popular provision of CCTV in places such as Wrexham diluted by the Government. It is not clear whether the current review will lead to a reduction in CCTV provision. It has had a big impact in providing a safe and satisfactory shopping environment in my constituency. She also spoke about regulation, to which I will return.
I was interested in the contribution of the hon. Member for Aberconwy (Guto Bebb) on corporation tax. It was such a good point that the only other person whom I have heard make it is me. We talk too often about reductions in corporation tax. Those of us who have run a business as a sole trader know that those reductions do not result in any benefit for such individuals. We need to be more flexible in the way in which we use such provisions.
The hon. Member for Hove (Mike Weatherley) was right that the phrase “the nation of shopkeepers” comes from Adam Smith. The hon. Gentleman made an interesting point about regulation. I am sorry to disappoint him, but the Secretary of State for Health spoke only this week about additional regulation on tobacco products, with the introduction of plain labels. Far from following the hon. Gentleman’s advice, the Government are going in the opposite direction.
The hon. Member for Solihull (Lorely Burt) told us about Asda in her constituency, and it is also a major influence in my constituency. We all face the conflict between supporting the work of independent retailers, which are important to our communities, and wanting to bring more jobs to our communities, which supermarkets are very effective at doing. They often provide flexible terms of employment for those who want to work there. We must get that balance right, which is difficult.
The hon. Member for North Swindon (Justin Tomlinson) made a valuable contribution. I am pleased to hear of his work with the all-party small shops group and I am sure he will continue to make valuable contributions.
One of the most difficult issues for independent retailers is regulation. That is a difficult issue for all of us. Many of the proposals that have been made in the debate, such as on parking and charity shops, would require additional regulation and new legislation. It is easy to create good soundbites such as “one in, one out”, but it is more difficult to devise the regulation that is necessary to pursue particular policy ends without its being onerous for small business.
As a former Minister with responsibility for regulatory reform, I know that the Better Regulation Executive will provide excellent support to the Minister by nagging him on regulation—I am sure it will nag him just as avidly as it nagged me. Contrary to the perceptions of some Government Members, I did not used to wake up dying to regulate every morning, but tried to reduce regulation as much as I could. One of the previous Government’s most positive moves in reducing regulation was the forward regulatory programme, whereby Departments have to publish what they propose to regulate. It frightens Ministers when they see the length of the list they present. I am delighted that the Government are continuing with that programme, because it is a good discipline. Dealing with new regulation is in many respects more difficult than dealing with stock. It is quite easy to get rid of a regulation about driving horse-drawn carriages across particular heaths, but it is more difficult to prevent Ministers from legislating with new regulations. As we all know, independent retailers suffer disproportionately from regulation because they have so many other things to do.
We have a common aim of improving the position for independent retailers. There is a lot of imagination in the independent retail sector. When I was fortunate enough to be a Minister at the Department for Business, Innovation and Skills, I made an interesting visit to Westway in west London, where, under the ring road, there is a co-operative enterprise of different shops that offer distinctive products. If the hon. and learned Member for Torridge and West Devon has an opportunity to visit that enterprise, I commend it to him. It shows that when a community is changing, independent retailers often identify more quickly and appropriately the opportunities in the market, and are often more imaginative in the products that they provide.
We have discussed some interesting incentives such as rate relief and enabling students to consider taking on empty units for a limited period—perhaps for a month or two. We should encourage such flexibility at a local level. Contrary to the observation of the hon. and learned Gentleman, the Opposition want small business to succeed and see it as an important driver of economic growth. Economic growth is vital and it is regrettable that the Government have not yet brought forward their growth White Paper.
I agree with the hon. and learned Gentleman that growth is imperative. We want small businesses and large businesses to succeed. We need to convince our young people to run their own small businesses, which is something I did but would never have contemplated as a teenager—it just happened that way in the end. Doing so gives you individuality, freedom and potential, and we should be encouraging people to do it. We need to devise and put in place the policies to take that forward.
May I begin by congratulating my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), not only on securing the debate but on his characteristically eloquent and powerful advocacy of the arguments that he had marshalled? He ranged across some of the crucial touch points that allow our town centres, villages and high streets to prosper but that, in some cases, prevent them from trading at all. I want to touch on as many of those points as I can.
It has been an excellent debate and there have been a number of common themes. I will use the nine minutes or so remaining to tackle some of the wide range of issues, but I will canter through them, if I may use the white knight metaphor without too much danger, leaving it there for Members to mull over if they have strong stomachs. I will not get into some of the finer points or the broader issues around regulation. We have important issues such as business rates, planning, the role of high streets, town centre management and the commission that my hon. and learned Friend mentioned.
First, as someone who started his own business at the bottom of the previous recession, I share my hon. and learned Friend’s interest in and passion for enabling our independent retailers to start and grow. Times are difficult for many retailers, as well as other small businesses. The point that hon. Members in all parts of the Chamber have made is that small businesses, and small shops in particular, are not just vital parts of the local economy, but focal points for the community. We need to bear that in mind.
It is also important to bear in mind that at the moment, in some places, independent retailers are often feeling squeezed out by some of the larger chains, which can threaten to reduce consumer choice and competition. In the time that I have, without stretching the metaphor too far, I will seek to saddle up and tackle some of the practical issues, which our constituents are keen to learn about.
The Government inherited some plans that would not be good for small businesses, such as planned increases in small company corporation tax and in employer’s national insurance. We have made it clear that we will reverse both increases. For example, the impact of the planned national insurance rise, which we have now shown how we will reverse, would in the estimation of the Federation of Small Businesses have cost up to 57,000 jobs—often in the local shops that our communities value. We are, therefore, reversing the approach on employer’s national insurance, for the most part. On small company corporation tax, from next April we will be cutting—not increasing—the level of the rate on profits by 1%, which should be crucial for the viability and, indeed, profitability of many of the smaller retailers.
A number of people raised some powerful issues about charity shops. The question concerns when people enjoy special treatment but trade in areas that they had not previously traded in. I want to raise those issues with my ministerial colleagues.
The hon. Member for Hove (Mike Weatherley) mentioned tobacco displays, but the choice is difficult. We all want to ensure that underage smoking is tackled, but we do not want to penalise the smaller business unduly. We are having a strong discussion in Government on that subject, and the Secretary of State for Health will be making an announcement shortly.
The issue of business rates was raised by a number of hon. Members. When running a business, business rates sit on the overheads—they are fixed costs, so in good and bad times they affect people equally. That is why I can confirm in one case, and newly announce in two other cases, changes that address many of the questions asked in the debate about small business rates and the relief.
I confirm that we are doubling the level of small business rate relief in England for one year, with effect from this October, reducing the fixed cost for small businesses and helping them to continue to trade while the economy returns to growth. As suggested by hon. Members, that means that eligible businesses occupying properties with a rateable value of up to £6,000 will pay no rates, with tapering relief up to a rateable value of £12,000.
In practice, what does that mean? It means that more than half a million businesses in England will benefit, with 345,000 businesses paying no rates at all. In value terms, the saving amounts to £390 million. In particular, my hon. and learned Friend the Member for Torridge and West Devon will wish to know that we think about 65,000 businesses in the south-west will benefit. My right hon. Friend the Secretary of State for Communities and Local Government has announced that we intend to proceed with legislation to ensure that small business rate relief will be automatic. We made that commitment before the election, and we are honouring it. It will be set in legislation shortly.
Today, we announced our plans to change the rules so that councils can set further business rates locally, to respond to specific needs or to help high streets that are struggling and where a little local application of further discounts could help. It is a good local programme, funded locally, which will provide vital flexibility in our areas. I hope that right hon. and hon. Members will take those points further forward.
Planning was raised by several hon. Members. Independent retailers in the high street have been anxious about some of the changes made under the previous Government. This Government strongly support a localist approach to planning for the high street, which is why we have a clear commitment to the “town centres first” planning policy. In practice, it gives local authorities the ability to consider the vitality, viability and diversity of shopping districts when considering controversial planning applications.
Ministers are also making it clear that any specific changes to national planning policy will be brought forward through the national planning framework. There is, therefore, clarity and an element of consistency. We are committed to returning power to local communities, to enable them to shape the development of their areas, which is why we will present to Parliament a simple and consolidated national planning framework covering all forms of development. The announcement will be made soon, in particular on how we propose to progress the framework and on the implications for specific areas of planning policy. However, to be very clear, the principle of “town centres first” is a vital part of that framework.
I will canter on, if I may, because I feel honour bound to mention a couple of questions asked by other Members.
On procurement, the answer for the hon. Member for Solihull (Lorely Burt) is 16%. Measures for transparency and removing red tape will help. If she looks at the UK Trade & Investment website, rather than at the Department for Business, Innovation and Skills one, she will find the export advice that she seeks.
I turn briefly to two other things, one being rural broadband, about which my hon. and learned Friend the Member for Torridge and West Devon is keen to have answers. We are determined to ensure that we do not just have a slight improvement—2 megabits—but that we have super-fast broadband right across the country. Our commitment is to deliver that by 2015, backed by a £530 million package. We are piloting it, in particular, in rural areas—we understand their difficulties—such as the highlands and islands of Scotland, Herefordshire, Cumbria and North Yorkshire. The commitment is clear, and we want to ensure that we deliver on it.
Lastly, I turn to the broader question. My hon. and learned Friend was, under the chairmanship of my hon. Friend the Member for Northampton South (Mr Binley), part of the commission referred to in the debate. A vital beginning to that process is the document—the tool—that I am holding, entitled “Healthy High Street?”. The process is about understanding the holistic issues that affect town centres—whether planning, parking or whatever. I happily and strongly commend the proposals, which have come from the retail industry jointly with the Government. The document begins a process to strengthen town centres.
Times are tough for retailers, which is why we are tackling their costs, dealing with planning and are open to helping them in the months and weeks to come.