House of Commons Hansard Debates for 2 Jul 1997 (pt 4)

Mr. Breed: I agree with my hon. Friend. That is one of the many issues that need to be addressed in a comprehensive review.

The situation in the high street has been made worse recently by the amalgamation of building societies, some of which have moved from the high street, and the

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reduction of the number bank branches. Often, such units are harder for ordinary retailers to occupy. They stand empty, gathering dirt and dust and creating blight on the high street. Town centre planning policies must take account of those new developments, which affect almost every high street in every town. They are changing the shopping scene and the way in which we use our high streets.

I hope that the Government will urgently consider ways to support the remaining small retailers. They have a distinct function, particularly in respect of competition. They are fighting a difficult battle, but if there is not to be a further drift to what would be almost a monopoly for the large supermarket retailers, which now have some 60 to 70 per cent. of all retail sales, some provision needs to be made for small retailing units in our high streets.

The former Government recognised the problems of small village post office stores. Many grateful post office storekeepers in my constituency were very pleased. Although it came rather late in the day and was rather modest, that initiative addressed the problems. Virtually the same problems are hitting our high streets. Some towns are considering the use of town centre managers to co-ordinate the activities of retailers in the high street by bringing them together to market themselves more forcefully to local consumers to provide some measure of competition for large out-of-town retailers, but they need additional assistance. If the retailing centres that form a valuable part of our smaller towns are not to decline further and family businesses are not to continue to close, they need support.

10.26 am

The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): This has been an important and interesting debate. I congratulate the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on having chosen the topic. I thought that the debate would range far and wide, and it did, but it focused on some real concerns. Many issues were raised and much of what the hon. Gentleman said chimed with what was said by other hon. Members. I hope to be able to respond as fully as possible. The headline topic for this debate is small retail shops. The feelings expressed by many hon. Members show how socially essential we believe small independent retailers can be.

We had the privilege of hearing the excellent maiden speech of my hon. Friend the Member for Motherwell and Wishaw (Mr. Roy). He paid a sincere and well-deserved tribute to his predecessor, who is a friend of us all. I have no doubt that what he said about his constituency, his pride at having been born and brought up there and his great feeling for the area will mean that over the years he will be a fine and able representative and make an outstanding contribution to the work of the House. We also heard a good contribution from the hon. Member for South-East Cornwall (Mr. Breed), who echoed some of the concerns that have been mentioned.

The contribution of this vital sector is important. Small retail shops provide the variety, choice, vitality and diversity that consumers desire. It is that vitality, diversity and convenience which the public--the people we represent--miss so much when those shops disappear. I shall explain later how the new Government are determined to improve matters by forging an effective partnership with all sectors of business in this country.

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I shall first put the United Kingdom's retail sector into context. Retailing is vital to our economy. Sales of about £160 billion mean that it accounts for almost one quarter of gross domestic product expenditure. Retailing gives direct employment to almost 2.5 million people, with many others providing services to support that activity. The retail sector also accounts for more than 30 per cent. of the UK's commercial property portfolio. Those are impressive statistics.

Mr. Kirkwood: It is helpful to place the sector in context and show its importance and value, but is the Minister satisfied that the statistics available to her are disaggregated to the extent that she can identify what is happening in the high street? The statistics are important and powerful, but I suspect that the vast majority of that value is generated by much bigger businesses than some of those on which we are focusing this morning.

Mrs. Roche: It is interesting that those independent outlets contribute about 25 per cent. of the figure--they play a significant part.

Today's debate has provided us with an opportunity to acknowledge the significant part that small retailers play in our day-to-day lives. Many people enjoy having the daily newspaper delivered through their front doors, although I suspect that hon. Members' enjoyment depends on what the daily newspaper has to say. Unlike the independent newsagent, however, we do not have to get up at 4 or 5 o'clock in the morning to organise deliveries. At the other end of the day, when people drop in at their local convenience store to buy essential items that they need, they may meet a shop owner who has already been working for more than 12 hours. It is a hard, competitive and difficult life. As the hon. Member for Roxburgh and Berwickshire and others have said, competition from larger supermarkets and other retailers has made business even tougher.

The hon. Members for Roxburgh and Berwickshire and for South-East Cornwall mentioned the problem of crime, which is a real problem for many of our small retailers. The Forum of Private Business, one of our small business organisations, has done a great deal of valuable work on this subject, which is a matter of concern. There clearly needs to be close co-operation between the police, local authorities and the business community to ensure that our town centres are as safe as possible. I know that when my right hon. Friend the Home Secretary introduces the crime and disorder Bill in the near future he will have those considerations very much in mind.

The reasons why retail competition is so strong are as many and varied as the topics in today's debate. Changing life styles and expectations, differing family circumstances, new product ranges and consumer services, the growth of supermarkets and other large stores, have all combined to produce a dynamic sector. If one stands still in retailing, as in any business undertaking, one loses ground.

Mr. Andrew Stunell (Hazel Grove): The Minister spoke about crime, a subject which causes as much concern in small shopping centres as in large town centres. The outgoing Administration made grants available through the Home Office for closed circuit television in many centres. Does the Minister agree that that programme should be developed and extended in future? There is plenty of scope for partnership between

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local authorities, retailing organisations and local traders groups, but financial prompting is often needed. Perhaps the Government will see their way to providing it.

Mrs. Roche: In opposition, we always supported closed circuit television, which can be very useful. In the Wood Green shopping area in my constituency, we are about to install closed circuit television after an enormously successful pilot project. A possible assault on a police officer was prevented and a missing child was returned to its parents. I agree that close co-operation between all the major players is necessary and I will bring the hon. Gentleman's remarks to the attention of my right hon. Friend the Home Secretary.

While considering the good things that the sector has to offer, we must acknowledge that there has been a substantial reduction in the number of retail businesses in the past 10 years. Almost 50,000 retail businesses have disappeared in that time, the vast majority of which have been single shops. While some of those businesses may have been taken over by larger retailers, the hon. Member for Roxburgh and Berwickshire graphically described, through the example of Hawick, what many hon. Members will also know from their constituency mailbags and surgeries--that a large number of those small retail businesses have been forced to close. That has brought severe hardship to the shop owners and their families, as well as in many cases the loss of lifetime savings and even retirement nest eggs. The policies of the previous Administration have certainly contributed to the pain suffered by independent retailers.

I do not intend to dwell at length on the failures of the previous Administration, but I feel that I must comment on the approach taken to planning policy, an important subject which the hon. Member for Roxburgh and Berwickshire outlined. The latter part of the 1980s saw a virtual free for all on retail planning which led directly to the disappearance of high street diversity and a reduction in consumer choice. I acknowledge that two attempts were made in this decade to reimpose tighter retail planning guidelines and that the sequential test for new retail shopping developments, together with impact assessments, now provides local planning authorities with a much sounder base against which to judge planning applications.

As my ministerial colleagues have made clear, we do not propose to review the English retail planning guidelines at present, although we are concerned to see them applied firmly and consistently and to monitor their effectiveness. However, the review of the Scottish retail planning guidelines which started in March is continuing.

Those stricter guidelines were too late, however, to save many small independent retailers. It was a classic case of leaving the stable door open for too long. While I accept that consumers have welcomed some of the new out-of-town developments, the consequences of the then Government's planning guidelines for small high street retailers cannot be over-estimated. There are too many examples of shopping centres and high streets closing. People do not go to areas where there are boarded up shops, and a vicious circle is created. People do not want to go to shops in those areas, so the shops close and crime proliferates. We all have experience of that as constituency Members of Parliament.

What do the new Government want to do? First, we have made it abundantly clear that we regard small firms as vital to the success of an enterprise economy.

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A healthy, vibrant small business sector creates wealth and employment and generates new ideas and products--small retailers fall within that category. We are determined to deliver the right conditions so that small retailers and other small businesses can thrive and grow.

The Government are firmly committed to making Britain a prosperous and competitive nation. Last month, my right hon. Friend the President of the Board of Trade outlined the Department's agenda to achieve that. It is a programme to forge a real and effective partnership with business. The "Competitiveness UK" agenda comprises a number of different elements and I assure hon. Members that the role of small and medium-sized enterprises, especially small retailers, will be part of that agenda.

Unified business rates have been mentioned today and there is no doubt that the system is widely disliked and perceived as being unfair. That message came out loud and clear at the "Your Business Matters" conference set up by the previous Government. It also emerged from the report undertaken by the Institute of Directors, which brought together some of the comments made during that consultation process. The small retail sector has certainly had to bear the burden of that system.

We are committed to carrying out a full consultation with the business community about returning to a locally set rate. One of the advantages of localising the system is that it gives a locus for the major partners--local authority, police and business community--to get together on many issues, such as closed circuit television, cleaning up town centres or other exciting initiatives in the high street. Where the local authority, police and business community--especially the small retail sector--all work together, the effect in terms of delivering an enhanced service cannot be underestimated and we strongly support such collective efforts.

Several hon. Members mentioned the growth of charity shops--an issue which is frequently raised by the retail sector. Our debate has been a well-balanced one and it has been acknowledged that the alternative to the presence of charity shops would probably be vacant premises, boarded-up shop windows and a generally rundown appearance. However, I also understand the strength of feeling among small retailers who regard charity shops as unfair competition.

This is a sensitive issue and Parliament has previously recognised the importance of charity shops to the fund-raising efforts of charities. In the United Kingdom, we are proud of the generous support that so many people give to various charities. Specific legislation allows, in certain circumstances, a partial and discretionary relief on rates. Charity shops are, of course, a valuable source of revenue for the charities concerned and I am sure that we have all seen reports of how charities' funds have dropped dramatically recently. Charity shops often enjoy the benefits of being staffed by volunteers and of reduced rentals for the property.