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That was said on 18 May this year. The Conservatives, however, still cling to their policy of opposing the SBS.

Small shops have been quick to take advantage of the support that the SBS has to offer. The small firms loan guarantee scheme is a good example. It helps small companies with good business ideas to obtain
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loans when their lack of the collateral normally required as security by the lender would otherwise make borrowing impossible. Since the SFLG began, about 100,000 loans valued at more than £4 billion have been guaranteed, and since 2003-04 nearly 20,000 loan guarantees have been agreed under the scheme. I suspect that the Conservative party would not continue to support such measures. Current monthly use amounts to about 650 loans, with a total value of around £40 million a month. The average loan tends to be about £70,000.

Small retailers have benefited. The scheme was strengthened considerably in April 2003, when changes were made that brought retail and other local services such as garages and hairdressers into the scope of the scheme. The number of small firms loan guarantees offered to the retail sector since April 2003 stands at 2,925. Between 2002 and 2005, 218 loans, valued at £13.6 million, have been granted in the hon. Gentleman’s county of Norfolk. On his own doorstep, we are providing direct resources and funds to support the creation of small businesses or enable them to be sustained. Perhaps he would give some recognition to that.

Another key area of business support is the Business Link service, which is a crucial part of the Government’s campaign to promote enterprise. Business Link will fast-track customers to the expert help that they need—whatever the issue. Its service is delivered through advisers in customers’ local areas. Over the past four years, the number of customers using Business Link has doubled. The customer satisfaction level—I emphasise that we are talking about small businesses—is at a record 91 per cent., and 96 per cent. of customers are willing to recommend the service to others. Again, the Conservative party has shown no desire to continue with this direct support for small businesses.

The hon. Gentleman raised the issue of the Office of Fair Trading grocery market reference. He will be aware that I cannot directly intervene in such matters, but it will be useful and appropriate if I respond where I can. The UK competition framework has established the OFT and the Competition Commission as independent statutory bodies. The Government wished to remove politics from competition decisions, allowing expert independent competition bodies to take decisions on mergers and markets. I am sure that Members in all parts of the House will recognise the benefits of that revised structure.

On 9 May, the OFT announced its decision to refer the grocery market to the Competition Commission for a market investigation. The evidence compiled by the OFT suggests that the planning regime acts as a costly barrier to entry, making it difficult for new stores to open and to compete with those already in the market. In addition, big supermarkets have significant land holdings, which could aggravate barriers to entry or otherwise harm consumers. In some instances, supermarkets have attached restrictive covenants when selling sites. The OFT also found that there is evidence to suggest that the big supermarkets’ buying power has increased, and that some aspects of their pricing behaviour, such as below-cost selling and price flexing, could distort competition.


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Although the OFT has been specific about the issues that it feels could present a problem within the market, the Competition Commission investigation is not limited to considering only those issues identified in the reference document. They could include competition in the food supply chain—farmers are an example—and/or non-groceries sold by supermarkets. It is for the Competition Commission to make that decision.

The supermarket code of practice, which regulates the relationship between the big four chains and their direct suppliers, is not affected at this time, and remains in place until the companies bound by it—Tesco, Sainsbury’s, Asda and Morrisons—are released from the undertakings that form the basis of the code. It will be for the Competition Commission to make recommendations in its report on whether it believes that the code should be maintained, amended or repealed.

I turn now to rural post offices. The Government recognise the important role played by post offices in the delivery of services to rural communities, and have taken steps to maintain their presence. In November 2000, we directed Post Office Limited to prevent avoidable closures of rural branches, and since 2003 we have supported the rural network to the tune of £150 million per year. That subsidy helps the company to maintain the network of rural branches. That is in stark contrast to what we inherited from the Conservatives in 1997. Between 1979 and 1997, the previous Government presided over 3,500 closures, and produced no policy on how to ensure that the network could continue to remain relevant into the 21st century. In addition, about two thirds—900—of directly managed Crown branches were converted to franchise status with no clear strategy.

It did not take long for this Government to recognise that, following decades of decline and under-investment, drastic action was necessary to get the business on track and to secure its long-term future. We set about producing policies that would help achieve that—something that the previous Government had totally failed to do. We set about reversing the decline. Some £500 million was injected to help fund the “horizon” IT infrastructure, and since 2003 the Government have not only committed £150 million a year until 2008 to support the rural network; on top of that, we have put £210 million towards the urban reinvention programme, including some £30 million of investment grants to improve and modernise remaining branches. Not a single penny went to the post office network under the Conservative Government. Indeed, year in, year out, of the profits made by the Post Office, almost 95p in every pound was taken by the Conservative Chancellor to be reinvested in other parts of the public sector. One example was paying large-scale unemployment benefit, instead of reinventing the Post Office to provide a modern service. I will not yield to any Conservative on investment, and future investment, in post office services. This Government have invested the amazing sum of more than £1.4 billion in the past few years in modernisation and retooling of both the directly managed Crown network service and the rural and urban network services.


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The Government’s policy of preventing avoidable closures in rural areas has benefited the constituency of the hon. Member for North-West Norfolk over the past 12 months—something that he either does not know about or has just ignored. Both the Brancaster and Syderstone branches reopened in late 2005, and the Brancaster Staithe branch is due to reopen later this month on 22 June. There are two temporary closures at Walpole St. Andrews and West Newton, and Post Office Ltds rural transfer advisers are working hard to fill the vacancies. I will advise the hon. Gentleman further on the reopening of those two post offices.


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We have had a debate about Sunday shopping, and the hon. Gentleman will have to wait a little longer, as I am still reviewing the issue in terms of the consultation that has taken place.

If anyone is thinking about opening a small business, they should do it now. There is no better time under a Labour Government achieving the world’s most stable economy. Vote Labour and get yourself a small business!

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Eleven o’clock.


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