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The most important subject was raised by the hon. Member for Southampton, Test (Dr. Whitehead) and others. I understand why the Minister said that, to her regret and that of others, the Bill will not include any mechanism for controlling national expenditure on campaigns that are clearly targeted at individual seats. The logic is that that will be dealt with by Sir Hayden Phillips’ review of party funding. I am not too bothered about who is the worst offender, but it is clear that parties with the most money nationally can now deploy that money in increasing numbers of target seats. We are not talking about £10, £100 or £1,000, but potentially tens of thousands of pounds. This applies to campaigns that would begin, in effect, now—a year after the previous general election—and take us right up to the calling of a general election. The only way in which parties manage to get out of the current rules is by being non-specific and seen to be nationally funded. Instead of saying, “Support Bridget Prentice as candidate for Lewisham, East,” or, “Support Oliver Heald as candidate for North-East Hertfordshire,” they use the party leader’s name. My party and I are very
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clear that Sir Hayden Phillips must deal with that. We expect recommendations and will put in our evidence accordingly, and we expect legislation to come out of the review in good time for the next general election. Otherwise, there will be no level playing field. We see this as unfinished business. I hope that there will be consensus, even if only on this one issue, so that we can move forward. We must return to debate this as soon as Sir Hayden Phillips’ review is over. We will certainly allocate time for that, and I hope that other parties will too.

Bridget Prentice: On photographs, we will consult political parties to ensure that there is support for that. I put on the record my endorsement of the splendid work done by my right hon. Friend the Member for Walsall, South (Mr. George) and the hon. Member for Somerton and Frome (Mr. Heath) in bringing the issue of observers to the Floor of the House.

Lords amendment agreed to.

Remaining Lords amendments agreed to.

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Committee appointed to draw up a Reason to be assigned to the Lords for disagreeing to their amendment No. 8 to the Bill: Mr. Michael Foster, Mr. Oliver Heald, Simon Hughes, Martin Linton and Bridget Prentice; Bridget Prentice to be the Chairman of the Committee; Three to be the quorum of the Committee.— [Mr. Michael Foster.]

To withdraw immediately.

Reasons for disagreeing to Lords amendment No. 8 reported, and agreed to; to be communicated to the Lords.


Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Magistrates Courts

Question agreed to.

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Small Shops

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

10.1 pm

Mr. Henry Bellingham (North-West Norfolk) (Con): I am pleased that the Minister for Trade will reply to the debate and feel flattered that a Minister of such seniority is staying up late to do that.

The debate is important because it is about small shops, which are a vital part of not only the small firms sector but the rural communities that they serve, as well as suburban and urban communities. They are often the focal point of the community, especially when a shop is combined with a post office and probably a newsagent. Villages and urban wards that do not have village shops or a shop at the centre of the community lack something important, which goes to the core of community spirit.

There has been a substantial decline in the number of community stores—indeed, 2,000 closed last year. As I go round my constituency, I see shops that have closed and villages with no shop. Not long ago, villages such as Pentney near King’s Lynn had a shop, a pub and, indeed, a garage. Now there is nothing left in that village and the heart has been taken out of it. I am afraid that such occurrences are all too regular. Let us consider the number of closures of unaffiliated independent stores: there were 35,500 stores in 2000 whereas there were 25,893 a month ago—a reduction of 10,000 in a relatively short time.

Many hon. Members from all parties, but especially Conservative Members, have shown a great deal of concern about post office closures. In my constituency, 10 closures have happened in the past five years. Four closures of urban post offices happened under the urban post office renewal scheme. Those four closures in King’s Lynn had a significant and debilitating effect on the local community.

I want to consider the different sorts of shops and some of the threats to them, and perhaps examine the more promising points for the future. Most proprietors of small shops, newsagents and small pubs are innovative and proud people. The role of the small shops sector within the small firms sector is also important. Indeed, 90 per cent. of all businesses are classified as small businesses, and 75 per cent. of the entire work force are employed in small to medium-sized enterprises. That is important, particularly at a time when dark clouds are beginning to gather over our economy. I will not go into too much detail about that, but we know that the trade figures for the last quarter were shocking—the worst on record. We also know that the United Kingdom has fallen in the World Economic Forum’s rankings from fourth to 13th, that business investment is at an all-time low and that productivity is falling.

I do not believe that the extra jobs being created in the public sector will be sustainable in the short to medium term, so we shall have to look to the small firms sector to provide the employment that is vital to this country’s economy. That is why it is important that Her Majesty’s Government do everything in their
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power to make life easier for small firms, and for small shops in particular, but I submit that they are not doing that.

Let us take small post offices as an example. They have been hammered by the Government’s decision to introduce automated credit transfer. There was a time when our constituents could go into post offices in villages, suburbs and towns to draw out their benefits and perhaps spend that money in the shop on sweets, groceries or newspapers. Now, they are forced to have that money paid into their bank account. We warned the Government that that would lead to post office closures but they took no notice whatever. They set up the Post Office card account, but that is to be abandoned in five years’ time. What a shambles.

We are not asking the Government to give post offices large grants. We are simply asking them to use their power as a provider of services to locate as many of those services as possible in post offices. That is where the Government can help the small firms sector and small shops. We know how much pressure those shops are under from the competition from superstores.

That brings me to the Competition Commission’s inquiry into the United Kingdom grocery market. There are many concerns involved here, including the vast market power of the four largest retailers, their ability to sell at way below cost, their tendency towards predatory pricing, their buying power and their inordinate power over suppliers. All of us who represent farming constituencies or constituencies near to farming areas know the power of those retailers over suppliers and growers and over the rural economy. It is an invidious power, and it is very damaging.

That power is combined with the power of those retailers to get planning permission and to build up large land banks. We all know that when they are turned down for a planning application, they apply again and again until they get planning permission. They have the power and the finance in their shareholders’ funds to drive the system into despair and to get what they want.

Mr. Peter Bone (Wellingborough) (Con): I congratulate my hon. Friend on securing a debate on this important topic. Does he share my concern that the supermarkets’ latest tactic is to buy the small shops and turn them into local supermarkets? That is destroying another part of our heritage.

Mr. Bellingham: My hon. Friend is right. That is happening in all our constituencies. When it first started to happen, we thought that perhaps the Tesco community stores, or some of the other community stores that were taken over by the large retailers, might be a good idea. But now we have seen a number of traits such as predatory pricing and below-cost selling, and that has a damaging effect on the surrounding shops.

It is important that the Government widen the scope of the Competition Commission’s inquiry. As I understand it, its scope is to be limited mainly to planning and land banks. That is far too narrow, and I hope that the Minister will comment on that.

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Mr. Stewart Jackson (Peterborough) (Con): Does my hon. Friend share my concern, with regard to the ongoing investigation, that the Office of Fair Trading differentiates between a local community store such as a Tesco Metro and a hypermarket, which might be only a mile away? It considers them to be operating in different markets even though they have the same economies of scale and supply chain issues. What does my hon. Friend think of that?

Mr. Bellingham: That is an important point. I am grateful to my hon. Friends for supporting me in the debate, because it shows how strongly they feel about the issue. The Minister will have to take away those points and I hope that he will be able to answer them in about 10 minutes’ time.

I should like to make a quick point about the Sunday trading legislation. The Sunday Trading Act 1994 may well have been good for the consumer, but it certainly was not good news for small shops. It tipped the balance of retailing power decisively in favour of the multiple stores and the out-of-town sheds. HMG are in the process of reviewing the legislation with a view to extending the trading hours of large retailers. I can tell the Minister that there is overwhelming opposition in my constituency to any change to the legislation. I have received hundreds of cards and letters from people who work in shops and on stalls and a very large number of representations from organisation such as the Association of Convenience Stores, the Federation of Small Businesses, the Rural Shops Alliance and the National Federation of Retail Newsagents. The overwhelming feeling among those in the small firms sector is that there should be no extension of the legislation. Furthermore, it would be daft even to consider legislation while the Competition Commission inquiry is ongoing. I hope very much that the Minister will consider that.

There are other concerns as well. I should like to mention the impact of smuggling and counterfeiting. One of the less savoury phenomena of recent years is the rise of the rogue traders who sell counterfeit goods and smuggle tobacco and alcohol. Indeed, I saw the other day that one fifth of all cigarettes sold in the UK are illegal. That is having a damaging effect on the small shops sector and I hope that the Government will take it on board and address it.

Regulation gives rise to huge concern—we could debate it for many hours—and I want to make two very quick points about it. I am concerned about the rise in regulation. The British Chambers of Commerce’s “Burdens Barometer”, which is an ongoing measure of the accumulated combined total cost of regulations on business, has now hit £50 billion since the Government came to power. That excludes the minimum wage, which Conservative Members support. [ Interruption. ] We do indeed support it; we are on record as saying so. [ Interruption. ] I was not a Member then, and I do not think that any of my colleagues who are present were Members then. We support the minimum wage, and when I was shadow Minister for small business and employment, I made it very clear that we supported it. There is no question of a flip-flop; we have a firm policy.

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A change in the Whitehall culture is needed, because the Government have presided over larger and more intrusive government. The bigger the Government get, the more task forces they spawn, the more agencies grow up around them and the more they interfere. Why cannot they send a signal straight away? Rather than having a Better Regulation Task Force, let us have a deregulation taskforce. Let us include sunset clauses in much of the legislation that is introduced. Let us put an end to gold-plating as soon as possible. If we do that, we might just change the culture of Whitehall in relation to the small firms sector and ensure that the Government start to think about small business, rather than just emphasising their credentials in the big business and larger business community, where, quite frankly, there is a totally different agenda.

I want to say a quick word about garages. Nothing is more depressing than driving through a village and seeing a once-thriving local garage standing empty, probably soon to be replaced by upmarket housing. There are numerous examples in my constituency. Villages such as Grimston, Brancaster and Magdalen had thriving village garages, with shops attached. In some cases, a post office was attached as well. Many other garages are hanging on by their fingertips. I went past a garage the other day where fuel was being sold at £1.06 a litre. Most of those garages have stopped selling fuel, but HMG could consider the whole planning regime relating to small garages and their change of use. Could not HMG also examine closely the fuel supply arrangements for smaller independent outlets that do not have the buying power of the multiples?

The outlook for small shops is bleak. The Government have ignored that crucial sector of the economy. One brighter light on the horizon, however, is the farm shop movement. In my constituency, several small farm shops have opened recently. There is one at Knight’s Hill in South Wootton run by the Melton family. There is another in Bircham run by the local publican, William Poole, in conjunction with the Carter family. The Sandringham estate at West Newton is also about to open up a farm shop, which will incorporate a butcher’s, village shop and post office and which will sell meat from its red poll herd.

Public demand is changing fast. The public are getting more and more fed up with supermarkets refusing to label food properly, especially beef, pork and bacon. They are getting fed up with the crazy lack of concern for the environment shown by large retailers who source products from far-flung destinations when there are home-grown alternatives. They are also fed up with retailers having a cavalier attitude and a total disdain for the organic movement. That is why many members of the public up and down the country are beginning to speak with their pockets and demand higher standards. They are not getting those standards in supermarkets and large retailers, but they are getting them in farm shops. That is why the increase in farm shops, particularly in rural areas, is very healthy.

Mr. Philip Hollobone (Kettering) (Con): I congratulate my hon. Friend on a brilliant analysis of the threat to small shops in our country. Did not Napoleon Bonaparte say that England was a nation of
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shopkeepers? Is not it a shame that, 200 years on from when he uttered those words, we should have the need for such a debate in the House of Commons?

Mr. Bellingham: My hon. Friend’s remark is perceptive. Small shops and their proprietors are often the backbone of our communities. They are the people who provide the social focus in villages, towns and suburbs and who care about the community. The service that they offer can also be social, as they provide a place where people meet, converse and feel that they are part of a thriving community. The Government do not properly understand that.

With the exception of what is happening in the farm shop movement, the outlook for small shops is bleak. It will be even bleaker if the Government do not start to listen to what is being said by organisations such as the Association of Convenience Stores, the Federation of Small Businesses, the Forum of Private Business and the Rural Shops Alliance. The Minister is new to this job. He is back in a senior position in the Department of Trade and Industry, and I welcome that. I am sorry that he is no longer in the Cabinet, but perhaps he will have a chance to return to it before too long. Perhaps if he really grips this issue, runs with it and becomes a champion of small shops, he will build up his credentials as someone who cares about the small firms sector. If he does that, and the Government start to listen, there may be more grounds for optimism than I have outlined tonight.

10.18 pm

The Minister for Trade (Mr. Ian McCartney): I congratulate the hon. Member for North-West Norfolk (Mr. Bellingham) on securing this debate. I am glad to have the opportunity to discuss the issues that he raises. As a Conservative Member, however, he has some selective amnesia. He said that he supports small businesses, but we should remember that one small business went bust every minute of every day under the Conservative party in government. He said that he supports the national minimum wage, but the Conservatives said that the national minimum wage would cost 2 million jobs. We created the minimum wage and we also created 2 million jobs. As for support for rural post offices, his party closed 3,500 rural post offices in its last period in government. Let us have the debate and discussion, and I hope that I will be able to demonstrate that the Government not only value small shops but small businesses generally in the community and in society.

Retail is of great importance to the prosperity of the United Kingdom economy. Eleven per cent. of our enterprises are retailers: more than 102,500 stores. UK retail sales were worth approximately £249 billion in 2005. Retail is also important in providing employment opportunities. Just under 3 million people in the UK are employed in retail—one in 10 workers. Small retailers have a vital role to play in the success of the retail sector and the provision of jobs. Of course large businesses are important—very important—but small retailers contribute to a vibrant and diverse sector.

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The convenience store sector is thriving, notwithstanding what the hon. Gentleman said. The Institute of Grocery Distribution, a key research organisation for the sector, estimates that sales in convenience stores—stores measuring less than 280 sq m, about the size of a tennis court—represent about 20 per cent. of total grocery retail sales in the United Kingdom. The IGD forecasts that convenience stores’ share of the total grocery retail market is likely to continue to rise, increasing from 20 per cent. to nearly 24 per cent. by 2010.

Enterprise is vital to a growing and dynamic economy. To encourage and assist enterprise, we need to create the right support mechanisms. The Government provide a range of support measures for small businesses, including small shops—something that the hon. Gentleman conveniently forgot to mention. Small businesses can obtain grants, funds, loan guarantee schemes and advice through our network of business links. In addition, we ensure that the valued experience and knowledge contained in bodies representing smaller retailers is captured through involvement with our key retail forums. I hope that I am right in thinking that the hon. Gentleman indicated that the Conservative party would support those forums and their continuation.

The retail policy forum and the retail innovation group give small businesses a voice at the heart of Government, and they use it in an effective way. Together the Association of Convenience Stores, the British Hardware Federation, the Horticultural Trades Association and the British Retail Consortium are working with the Department of Trade and Industry. About 70,000 small shops are involved. Recent informed exchanges on the possibility of extending Sunday shopping hours demonstrate the importance of the relationship.

Members of the Virtual Retail policy forum are partners with the DTI’s retail unit. They include the National Federation of Retail Newsagents, the Rural Shops Alliance, the Independent Retailers Confederation and the Giftware Association. At every level, small business in each sector is involved in a real business partnership with Government. The Small Business Service, an agency of the DTI, is a specialist centre of expertise in Government to champion the sector and help small businesses to flourish. It is a shame that the Conservative party is still committed to abolishing that service. The purpose of the SBS is to help produce an enterprise society, to ensure that Britain remains the best place in the world in which to start and grow a business, and to promote enterprise and a climate in which small businesses can flourish.

The Federation of Small Businesses supports the continuation of the SBS. A recent National Audit Office report quoted it as saying that it

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