Independent Retailers

Andrew George Excerpts

Wednesday 24th November 2010 Westminster Hall

[Mr Cox]

I agree with the hon. Gentleman, to a large extent. The main issue that I have heard is that charity shops are selling new goods. More and more charity shops are setting up on the high street, and instead of selling the donated goods of many hundreds and thousands of well-wishers, they are selling a whole range of brand-new goods—often sports goods and clothing.

It is not hard to understand the chagrin, confusion, dismay and disappointment of a shopkeeper, selling the same product lines, on hearing that the charity shop next door has been given not only the mandatory 80% relief, but the other 20% that the local authority can give. The charity shop might, therefore, be paying no rates at all. Its waste is treated as commercial, but the private shopkeeper is unable to have their waste treated thus, and it would seem to the struggling shopkeeper—who, after all, will be here in many years and is supplying a vital service for the community, bringing about a sense of well-being and contributing to the local economy—that the playing field is not even.

I do not suggest, as the hon. Member for Rochdale (Simon Danczuk) noted, that we should be anti-charity-shop, but I do propose to the Minister that we need to look at a protocol for local authorities, which would allow them to consult local shopkeepers about the product lines that might be sold in a charity shop. Such consultation would help, but equally we need to look at whether charity shops that are selling brand-new goods should receive the rate relief that they currently do.

[Andrew George (St Ives) (LD)]

Does my hon. and learned Friend not also agree that on the non-regulatory side there are things that the Government could do, simply by using their influence? For example, there is the established practice of upward-only rent reviews, which informs the rates charged in town centres. I urge him to highlight that issue and, on the regulatory side, to ensure that the free parking from which out-of-town retailers benefit is properly valued, because of the consequences that it clearly has for their competitors in town. Free parking gives out-of-town retailers an enormous advantage, and that is not properly reflected in their rating levels.

[Mr Cox]

My hon. Friend has, with uncanny empathy, predicted my next set of points, although he did not express them with the same eloquence as I would have, and probably not the same passion. I shall, therefore, go on to make the points, and a few others besides.

Rents and rates are a vital issue for high street shops and independent retailers, and my hon. Friend makes a very powerful point about upward-only review clauses. I would welcome the Government’s investigation of that issue, because the Conservatives’ commission into small shops in the high street recommended that we examine it to see whether we could make inroads into the unfairness. I want, however, to come on to rates.

I hear about planning, rates and charity shops, and rates come up time and again when I talk to small businesses in my constituency. The system is byzantine; it is incomprehensible. Walking into a local business, I sometimes find that the pub or petrol forecourt, for example, has had its rates lifted by thousands of pounds in the past year or two. In 2009, there was a 5% rise for inflation. A transitional relief scheme came to an end, so shopkeepers and business people were hammered by large rate rises.

However, the small business rate relief has not kept pace. Many businesses that are regarded as small—we would all regard them as such—are no longer covered by the relief. I urge the Government to consider raising the threshold for that relief. The Government could, importantly, immediately and urgently, translate the Conservative manifesto commitment, with which I have no doubt my Liberal Democrat friends will agree, to make small business rate relief automatic. It should not depend on an application. The rate authorities are able to see whether a business complies with the conditions necessary for small business rate relief, so why do they not simply apply it?

I implore the Minister to lend impetus to our examination of this issue. If we can raise small business rate relief, increase its threshold and make it automatic, we will do a lot to cause a sigh of relief up and down high streets.