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Mr. Hilton Dawson (Lancaster and Wyre): Does my right hon. Friend agree that, in pursuing the worthy objective of an urban renaissance, we should encourage distinctive urban centres, so that we do not end up with the uniformity of development that we have seen in the past? We should celebrate diversity and regional and local differences in our town centres.
Mr. Caborn: I could not agree more, and that is what we are trying to do. We are trying to change the whole concept of the planning regimes in this country and we want local authorities to be proactive, not reactive. Many initiatives are emerging in our city and town centres. I recently visited Manchester to open some flats that had been developed from an old broken-down warehouse. All those flats had been sold before the conversion had taken place. When designers and architects use their imagination, there is a market for the result. If professional people can be persuaded to stay in towns and cities, their disposable income starts to have an effect on the type of restaurants and shops in the area, and a virtuous circle develops.
We also want to develop the individual character of our towns and cities. We have some beautiful cities that can be said to be European, and there is no reason why we cannot develop some of those cities, as has been done in Barcelona. Shops and supermarkets are beginning to accept their responsibilities as part of the urban
renaissance. That approach to planning and investment in the inner cities has brought out creative talent instead of letting the market rip, which produced the situation that we inherited. Even the Conservatives accepted that before they left office, and introduced PPG6, which we welcomed.
The new approach to regenerating smaller centres and building them up to meet a wide range of everyday needs is part of our approach to tackling social exclusion. We want to ensure that everyone has good access to shops, especially food shops, and that will often mean ensuring that appropriately sized supermarkets are opened in local centres.
Mr. Nick Gibb (Bognor Regis and Littlehampton):
This is an important debate. A number of concerns have arisen in recent years about the food retailing industry. The growth of large supermarkets in out-of-town locations has been a fact of life for 20 or 25 years, and has taken place in Europe and the United States as well as in the United Kingdom.
The reasons for that growth are many, but unclear. They include social changes: people lead increasingly busy and demanding lives, and want to do their shopping in one trip once a week, at stores with easy parking. Other factors include increased pedestrianisation in many town centres, and the success of supermarkets in improving quality, choice and variety and in bringing down prices.
The motion tabled by the Liberal Democrats mentions
The growth of out-of-town supermarkets has had a damaging effect on smaller retailers and town centres, as I know only too well from what has happened in Bognor Regis and Littlehampton. Moreover, despite the gains in efficiency and economies of scale that supermarkets achieve, the prices that they charge are considerably higher than in similar enterprises in the United States. An effective campaign has been run by The Sunday Times to expose such price differentials.
There may be many reasons for those differentials, as no doubt the Competition Commission will report. Transport costs are higher in this country, especially after the Government's huge hike in diesel prices. [Interruption.] In total, the Government have increased the escalator from 5 to 6 per cent., and there has been more than one increase in any given year. The result is
that diesel prices are 21 per cent. higher than when the Government came to power. The escalator is higher and faster than it used to be. It should be ended, because it is making the problems worse.
Mr. Martlew:
If the cost of DERV has gone up so much, why have supermarket prices risen by only 1.5 per cent. since the Government came into power?
Mr. Gibb:
One cannot have one's cake and eat it too. Either there is a problem, or there is not. In this case, there is a problem. One of the key contributors to it is the high price of diesel, as we shall see when the commission reports.
The second problem is the price of land. We live in a crowded island where planning guidance is very strict, for worthwhile reasons. The result of the two problems that I have set out--high prices for diesel and for land--is that the prices charged by the supermarkets are also high. A more important factor still is the absence of fierce competition between the large, multiple retailers.
The third element that needs to be highlighted is that the British farmers who supply supermarkets do not receive a fair price for their produce. That is especially apparent in the fact that falling livestock prices have not been passed on to the consumer. The price of pork provides a stark example. There has been a catastrophic fall in pig prices over the past couple of years.
Dr. Howard Stoate (Dartford):
The hon. Gentleman makes a valid point about farm prices. A farmer in my constituency tells me that the price of his cabbages has not gone up for seven years. He receives 15p a cabbage now, and he got 15p a cabbage then. Supermarkets put their prices up year after year, so why is the poor old farmer receiving exactly the same price he was paid all that time ago?
Mr. Gibb:
The hon. Gentleman makes a fair point, although I am keen to get away from the consensus that appears to be developing.
Lack of competition among supermarkets affects consumers, but it affects suppliers too. There is concern that the supermarkets have almost monopsonistic purchasing power over their suppliers, and that that position is being abused. Supermarkets set high environmental, hygiene and quality standards for farmers and suppliers, and strict employee welfare conditions are required; yet, if the price or quality is better overseas, they are happy to switch to suppliers who do not enforce those conditions.
The environment is my fourth concern. It is suggested that out-of-town developments eat up the fast-diminishing stock of our countryside and that more such shopping means more car journeys.
All four of those concerns are real. The multiples supplied 86 per cent. of the United Kingdom grocery market in 1998, and are expected to account for 32.5 per cent. of all UK retail sales by 2004. However, the issues are also complex--no simple answers exist. Competing and contradictory interest groups represent concerns on either side of the argument.
It is all very well for Liberal Democrats Members to represent one set of interests in the House while Liberal Democrats locally represent different interest groups with contradictory policies, but the official Opposition, like the Government, require a joined-up policy. Commentators on these matters--the Liberal Democrats in particular--suffer from a lack of intellectual honesty or consistency that verges on the hypocritical. On the one hand, they are concerned that prices charged by supermarkets are too high in comparison with those of Europe and the United States; on the other, any suggestion that a new entrant to the market might force prices down raises concern about damage to town centres and smaller retailers.
If the supermarkets charge prices that do not drive out smaller stores, they will make larger profits which the Labour Government will deem too great. If they cut their prices, they will be accused of being predators. We need a balanced approach to enable competition to flourish, to allow the economies of scale enjoyed by the supermarkets to be passed on to the consumer and to enable farmers to be paid a decent price for their produce. We also need policies that enable our town centres to maintain a critical mass of viable shops and that protect an ever-dwindling stock of unspoilt countryside.
"the rapid expansion of out-of-town superstores under the Conservatives".
Like the Minister's speech, that is a facile and juvenile approach to a complex issue. It does no credit to the Liberal Democrats, or to the Minister. However, although it was one-sided and simplistic, the Minister's speech was slightly less polemical than the motion and will contradict many speeches made by Liberal Democrats in constituencies around the country.
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