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Empty Homes (Value Added Tax)

Mr. Jonathan Shaw accordingly presented a Bill to reduce Value Added Tax paid on the renovation of long standing empty homes: And the same was read the First time; and ordered to be read a Second time on Friday 6 November, and to be printed [Bill 223].

8 Jul 1998 : Column 1100

Orders of the Day

Competition Bill [Lords]


5.10 pm

Mr. John Redwood (Wokingham): I beg to move amendment No. 2, in page 2, line 42, at end insert

(e) resale price maintenance for over-the-counter medicines'.

Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss new clause 4--Exempted goods--

'( ) The Chapter I prohibition does not apply to an agreement relating to the resale price of goods of a class which are the subject of an order made under section 14 of the Resale Prices Act 1976 (exemption of goods by the court).'.

Mr. Redwood: I am grateful for this opportunity to speak on amendment No. 2 and comment on the rather good new clause tabled by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), which directly bears on the same problem.

In many of the debates on the Bill, the Opposition have pointed out that one of its unfortunate consequences--which I trust was unforeseen by those who drafted it--will be the closure of many smaller pharmacies. We have continually argued that the Bill makes it more likely that resale price maintenance will have to go. We have had confirmation of that view and various explanations from Ministers in Committee. Ministers would like the nation to believe that the threat comes from Brussels rather than from their actions and legislation. However, we will seek to show that pharmacies are threatened by the Bill and the Government, as well as by the possible threat from Brussels to which Ministers like to refer.

There are some agreed matters in this debate. It is agreed that, if resale price maintenance is abolished, some pharmacies will close. Indeed, Ministers have suggested that hundreds will close. It is common ground for about 170 Labour Members and for Opposition Members that that would be extremely damaging.

Mr. Tim Boswell (Daventry): Where are they?

Mr. Redwood: My hon. Friend asks where all those Labour Members are. It would be good to have them here expressing concern about their local pharmacies. However, the Whip on duty, who is now going through contortions trying to show that he has a sense of humour, has done a good job of ensuring that there will be no

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dissent and no expression of opinion or strong views by Labour Members in defence of the pharmacies that they know will close.

The Minister for Competition and Consumer Affairs (Mr. Nigel Griffiths): Perhaps the right hon. Gentleman can tell us why the Community Pharmacy Action Group does not support the amendments.

Mr. Redwood: I trust that the Minister will restrain his impatience a little, because it will give me great pleasure later in my analysis to take the House through the position of the Community Pharmacy Action Group and its advisers, Lawson Lucas Mendelsohn.

It is agreed that there is a substantial threat of closure, and that it comes from the abolition of resale price maintenance. It is also agreed, I think, that we can go this far in asserting agreement--that some combination of possible Brussels investigation and this legislation will cause the end of resale price maintenance.

The Minister will doubtless say, as he did in Committee, that there is an investigation under the existing system, but he should remember that there have been investigations before. The most recent concluded that the arrangements were in the public interest. If the Bill did not change the law, it would be possible for the retail pharmacies to win their case under existing law and arrangements as they did before, and continue thereafter to benefit from the advantages that resale price maintenance brings them.

It may help the House to remember why RPM is important to pharmacies, and why there are sensible alternatives for customers who rate price above service. This is important, because the typical local or rural pharmacy provides service and advice. That is often expensive. The number of customers may be limited, but they appreciate the whole service--not just the ability to purchase the goods once the right one has been identified. To sustain the considerable costs of this service, there is a system of recommended and maintained prices which enable pharmacies to recoup the costs of providing the full service and advice through a slightly higher margin than would otherwise be the case.

Mr. David Chidgey (Eastleigh): Does the right hon. Gentleman agree that retail price maintenance would become insignificant if the professional services provided by pharmacists were properly rewarded? Should not the President of the Board of Trade talk to her Cabinet colleagues about getting the Department of Health to pay properly on time, rather than keeping chemists waiting 90 days to pay bills?

Mr. Redwood: The hon. Gentleman makes an excellent suggestion. It is a pity that the President of the Board of Trade is not present to hear that advice. I trust that her Minister of State or the Minister for Competition and Consumer Affairs will pass it on. I do not wish to repeat the allegation made outside this House that she is insignificant. She holds an important office of state, and I hope that she will consider that kind suggestion from her allies in government, the Liberals. I associate the official Opposition with the idea that the NHS should pay its bills on time. That would help the cash flow of many small and larger pharmacies.

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Pharmacies need something more than the NHS paying its bills on time. They have traditionally enjoyed the protection of slightly higher prices, which provide them with extra money. That has been found to be in the public interest under the law that the Government are trying to replace.

Dr. Stephen Ladyman (South Thanet): Given the right hon. Gentleman's comments about the presence of my right hon. and Friends and the powerful case that he is making for community pharmacies, has he wondered where the hon. Member for Tunbridge Wells (Mr. Norman) is this afternoon? As the chairman of the Asda supermarket chain, he launched the complaint against resale price maintenance with the restrictive trade practices court. Why is he not here to debate these important matters?

Mr. Redwood: It shows my hon. Friend's strong sense of conflict of interest that he does not wish to be here to make the business case that is firmly held by Asda. He knows that the official Opposition strongly disagree on this occasion with Asda, fine company though it is. We will vote in favour of support for retail pharmacies. I am not a spokesman for my hon. Friend the Member for Tunbridge Wells (Mr. Norman). He is wisely not here tonight because he has other important business.

Although the case is now being taken forward by the executive management of Asda and not by my hon. Friend, his absence shows how sensitive he is on this important point. I should have thought that Labour Members would want to give him credit for that, rather than trying to coax him into making a statement that they would doubtless misconstrue against him.

Dr. Ladyman: I am grateful to the right hon. Gentleman for his continued patience. I understand the conflict of interest that has been created. Does he have any information about which Lobby the hon. Member for Tunbridge Wells will join this evening?

Mr. Redwood: I have already made it clear that I do not speak on this occasion for my hon. Friend the Member for Tunbridge Wells. I speak for the Opposition, and I am making our position clear. I suggest that we move on to more weighty matters that relate to the future of many of retail pharmacies. [Laughter.]

Many Labour Members think it is amusing and that the only interesting thing is the position of my my hon. Friend the Member for Tunbridge Wells, who is a fine Member of this House. They should concentrate on what worries their constituents, who are not asking about my hon. Friend's position. They are asking what, if anything, the Government will do to help community pharmacies. Will they tonight, by their inaction and vague statements, sign the death warrant of hundreds of small pharmacies, as I think they will; or will they listen to the urging of the Opposition, and, for a change, do something that might help those businesses?

Mr. Nigel Griffiths: The right hon. Gentleman promised the House that he would answer the question I put to him: why is the Community Pharmacy Action Group not supporting the amendment? It is because it supports us.

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