Independent Retailers

Chris Ruane Excerpts

Wednesday 24th November 2010 Westminster Hall

[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.

[Chris Ruane (Vale of Clwyd) (Lab)]

I congratulate the hon. and learned Gentleman on securing this debate. I share many of his concerns. Does he believe, as I do, that many small businesses in our town centres face a double whammy when a national chain locates in the town centre, often selling the same products as smaller companies, but at a lower price? The rates for those smaller companies increase because the big national has come into town and allegedly increased the footfall. So those smaller companies lose both ways: their rates go up and their ability to sell cheaper goods goes down.

[Mr Cox]

I do not want this debate to appear a depressing, gloomy litany of problems for the high street. I prefaced my remarks with the kinds of initiatives that communities throughout the country are showing—business improvement districts, taking on regeneration and community trusts—as they fight to sustain their towns and town centres. All communities will have a similar interest.

I agree with the hon. Member for Vale of Clwyd (Chris Ruane). The small business in the high street needs special consideration from the Government. That is why I make my proposal to the Minister today and ask him to reflect on it.

On Monday, I met representatives at the Tavistock chamber of commerce and one trader said to me, “Mr Cox, 25 shops in Tavistock are currently unoccupied. Why should we not grant a rate-free period for a small business that is willing to take on one of those shops, with phased gradations up to the full sum, say, over three or four years?”

The Minister could adopt that measure, which would greatly benefit businesses setting up in our market towns throughout the country. Nowadays, they could probably get a rent-free period, but why not enable the local authority to grant a rate-free period? If we did that, it would be a small measure, but its overall effect would be disproportionate and would impact on the confidence of businesses to enter the high street, off-setting some of the difficulties that the hon. Member for Vale of Clwyd mentioned a moment ago.

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[Mr Cox]

I agree with my hon. Friend. In fact, I would go further and place in the hands of local councils the ability to grant a temporary rate relief for new businesses.

My right hon. Friend the Chancellor of the Exchequer has already introduced in the Budget a number of measures for new business and start-ups. It is a critical priority for this Government. But we could help shops setting up specifically in the high street. They are so valuable and important to the overall welfare and well-being of the towns that we represent. It would be a simple measure that would, cumulatively with others, have a powerful impact. I want to mention other measures, but I want to sit down soon because I am interested in hearing the experiences of other hon. Members.

The measure that I have proposed is consistent with the overall philosophy of this Government, which is to place into the hands of local communities’ councils the power to do something about the fabric and infrastructure of their communities. I urge the Minister to consider that measure.

Whenever one mentions high street shops, issues arising always include parking. I am dismayed and disappointed at how often local authorities, particularly county councils, seem to use parking as a generator of revenue. Time and again the national Government have urged local government—often with a measure of disingenuousness, given the fact that they have starved local government of the means with which to do its work, while piling extra responsibilities on it—

[Chris Ruane]

Will the hon. and learned Gentleman give way?

[Mr Cox]

Not now. I will come back to that.

[Chris Ruane]

It was going to be about starvation.

[Mr Mike Weir (in the Chair)]

Order.

[Mr Cox]

This is not meant to be a partisan point. I am not, on this occasion, having a jab at the previous Labour Government. I apply this point to all Governments.

So often, Governments say to local government, “You should be doing this and that”, but do not provide the wherewithal for local government to do it. Local government has to understand that it is no use proposing new and ever-increasing parking charges and not expecting to deal a blow not only to the morale and confidence of traders, but to their economic interests.

Good parking, easy access and quick-stop parking, as the commission headed by my hon. Friend the Member for Northampton South called it, are vital to the health of the high street. It is essential that, in our constituencies, local government consults traders, stands by their side and designs parking and transport systems in a way that helps traders and does not simply generate cash from the consumers and customers on whom they depend. That is an easy statement to make.

I am dismayed that Devon county council, a Conservative council, proposes parking meters throughout the county towns even though that is inappropriate in some towns. Towns are struggling on the edge—the precipice—of economic viability, and to add extra charges for parking when people could go down the road to out-of-town free parking, as the hon. Member for St Ives (Andrew George) mentioned, is an extraordinarily crass, clumsy action. I urge Devon county council to think again or at least ensure that its consultation is real and that it tailors any parking schemes to the economic interests of the high streets in the towns on which it intends to impose those charges.

It is vital that we get parking right. Not only must we have a sensible parking regime, with different structures for times of day and the ability to park free for up to an hour, which are vital, but it must be enforced sensitively. How many times, when one goes to the local town council—hon. Members may have heard this—does one hear them say, “If only we could just enforce these things relatively flexibly and intelligently”?

The memory of getting a £40 or £60 parking ticket in a town stays with the visitor. They are not likely to look favourably on the town if, after a few minutes, they get a parking ticket for overstaying. It is crucial that local governments understand such things, and I believe that the national Government can set a lead with advice and guidance.

To that end, I agree with the hon. Member for Rochdale, who mentioned the high street health check issued by the Department for Business, Innovation and Skills. That is an interesting innovation; I do not believe that it is anything more than a start, but it is certainly worth doing and I urge the Minister to follow it up. I have read the document with interest and it touches on some important issues. We need that kind of leadership. We need local leadership supported by local authorities and underpinned by encouragement and leadership from the Government.

This should be a crusade. I want to paint for the House a picture of the Minister on his white horse, dressed in shining armour and shouldering his lance.

[Chris Ruane]

Lady Godiva.

[Mr Cox]

He does not have the hair to be Lady Godiva, although he has a fine head of hair none the less. Picture him riding out on his white charger, shouldering his lance and flying the flag for the high street. I know that the Minister is a Cornishman, and speaking as a Devonian, we look across the Tamar river with admiration, regard and not a little envy. The sum of £132 million is being spent on the good people of Cornwall—and by Jove they deserve it—joining up every village, town and community to super-fast broadband. The people of my constituency are like small children pressed up against the window of the pie shop, envying the sight of the riches within.

Broadband is important, and in Cornwall people are getting access to that wonderful opportunity—as a Cornishman, the Minister will be delighted with that. In market towns, high streets and small businesses in the wider area, broadband is crucial. However, in parts of my constituency, people can barely get half a megabit, and the best speed is about 5 or 6 megabits. We will look at speeds of 100 megabits in Cornwall. I do not know about Devonwall; we might even apply to join. Tremendous advantages can be conferred by broadband, and I urge the Minister to remember the Government’s commitment.

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[Chris Ruane (Vale of Clwyd) (Lab)]

Apologies for my late arrival to this important debate, Mr Weir. As I said in my intervention, I share many of the concerns that have already been expressed.

Eight years ago, I convened a meeting on improving the retail sector within my constituency. I asked Professor Michael Carley of Edinburgh university to address my local retailers. He had just conducted research into 14 successful town and city centres around the UK, including market towns, seaside towns and inner cities. The meeting heard that a successful town centre needs three crucial things: first, it should feel safe; secondly, it needs to be clean; and thirdly, it needs affordable and accessible car parking—that point has been addressed in full by the hon. and learned Member for Torridge and West Devon (Mr Cox).

We have had 13 years of a Labour Government, but those issues have not been addressed in my town. It does not have a Labour local authority but an independent Conservative local authority, and although we have had the Welsh Assembly Government and 13 years of the UK Labour Government, the problems were not resolved. I hope that they will be resolved under this Government, although I fear that they will not.

[Mr Cox]

Cynic.

[Chris Ruane]

Absolutely. One reason is that local government faces a 40% cut to its budget. Many issues that need addressing, such as those of having a clean, safe environment, are functions of local government. In my area, Denbighshire, the funding will not be there. The local government is already offloading those functions to the town councils, but they do not have the funding either. If the environment is not clean, visitors will not be attracted.

We have made great strides over the past two or three years in my constituency. I could see the quality of the environment declining, so I put my town forward for “Wales in Bloom.” That was before the big society was mentioned, but we got 60 local organisations such as schools, Churches, banks, businesses, Nacro and the probation service. They all pulled together, and we came third last year and second this year—hopefully, we will be first next year.

However, people will not actively take part in improving their local environment if they think that the local authority is passing the buck and saying, “Will you do this for nothing? We are not going to pay for it anymore.” We cannot engage and have the big society if people feel that they are being used. A clean environment is essential, and the engagement of the public, private and voluntary sectors is key.

Let me pay tribute to the work of the probation service in my constituency. The community payback team has probably done as much work as local authority workers to improve the quality of the town. That is a great way to go about things. They are young men, and a few young women, who would perhaps have been sent to prison or an approved school. Instead, they were told to pay something back to the community where they committed a crime. Those people are tending the gardens, making the flower beds and engaging with the community.

If we are to reduce the number of prisoners, we need to get offenders working in the communities in which they committed the offence. I support the Government on that. I would not like to see people who have committed offences in poorer communities being taken away and made to work in a leafy suburb or town. I pay tribute to the community payback team that has done so much in my constituency to improve the quality of the environment, and to the local government workers who, on diminishing budgets, year after year, pulled out the plugs—indeed, planted the plugs—to make Rhyl the second best town for its size in north Wales according to “Wales in Bloom”.

The second issue is that of a safe environment. The west ward in Rhyl had 900 houses in multiple occupation and a high crime rate. Over the past 10 years, that has come down dramatically and of the 376 crime and disorder reduction partnerships in England and Wales, the county of Denbighshire, in which my constituency is located, was the third best performer. That was done by adopting a neighbourhood approach to crime and disorder reduction partnerships, with everybody getting around the table together and saying, “This is not just a policing issue; it is about social services, education, prisons and getting people back to work.” That is how we got on top of crime in my constituency and reduced it dramatically.

I do not want to be too party political, but we may be facing 20% cuts in policing. Last week, my hon. Friend the Member for Wrexham (Ian Lucas) joined me at a meeting with North Wales police. All the AMs and MPs in north Wales were invited, but I am afraid that no Conservative MP or AM attended. We were told that the number of police officers in north Wales will be cut by 200, from 1,600 to 1,400. The number of support staff, including police community support officers, will fall by 250. We cannot have cuts of that calibre without affecting front-line policing. I fear that the cuts will fall hardest in the poorest communities, where crime rates are highest. If we have these huge police cuts, that will make my task of helping to regenerate my town centre more difficult.

The third issue that I want briefly to address is affordable and accessible car parking. Again, the person in charge of the county’s finances is a Conservative councillor. They control the purse strings and thought that it was a good idea to stick up car-parking charges, which grew and grew over 10 years. The authorities use them as a milch cow, but I fear that they have killed the goose that laid the golden egg. Statistics from my local authority show that car parking increased until about five years ago, but then steadily decreased. I would not mind if the authorities ring-fenced some of the money from the huge car parks in Rhyl to improve the environment in the car parks or the town, but they do not; they cream the money off and do not put it back into the community to improve the shops or the retail offer.

We have such things as loading bays. I am not sure whether anybody knows what a loading bay is—I do not. I do not know how long someone is allowed to stay in one, whether they have to put their lights on or whether they have to put a message in the window. However, people get fines time and again. As the hon. and learned Member for Torridge and West Devon said, they leave the town very disappointed. Local councillors have said, “These are seaside towns. We need to sting the visitors rather than the locals for the car parking.” I do not think that we should be stinging anybody. We should look at car parking as a way of enhancing the retail offer in our communities, not as a way of punishing people or taking money from one area and gifting it to another.

That was just my short contribution on the environment, policing and safety, and car parking. If we can get on top of those issues, we will be doing well. I congratulate the Government on their excellent document, which I have only just seen and browsed through. It is a great little document, and I will take it back to Wales to see what we can do with it. Once again, I congratulate the hon. and learned Gentleman on securing this important debate. I hope that the Minister is listening, because we will be watching.

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[Mike Weatherley (Hove) (Con)]

I, too, congratulate my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) on securing the debate, and on a vibrant speech.

Adam Smith, the father of modern economic theory, asserted that Britain is a nation of shopkeepers.

[Chris Ruane]

I thought it was Napoleon.

[Mike Weatherley]

The Opposition may disagree about who said it first, but I assure them it was indeed Adam Smith.

It remains widely recognised that the small and medium-sized enterprise sector today will play a pivotal role in the recovery of our economy—and rightly so. All hon. Members will be familiar with tales of the local independent retailer who goes that extra mile to take care of their community. They provide essential services and fulfil the retail needs of those who are less mobile and most vulnerable. The idea that independent retailers are the heart of communities will not come as a revelation to most hon. Members present for the debate—if it does to any of them. Despite that, in February this year the Local Data Company reported in a study that one in eight high street shops lays empty.

The economic slowdown clearly had a role to play in the shuttering up of our independent high streets, but there are far more fundamental causes, which will not reverse with the advent of economic recovery. The report cited a combination of rising business rates, soaring rents and draconian parking restrictions as being to blame, and I know from speaking to my constituents in Hove and Portslade that the study paints a pretty accurate picture. However, my constituents would all add one key issue to the list: the massive over-regulation that the sector endures. Government’s role is to ensure that causes are identified and that there are market conditions that foster an independent retail sector. There is a balance to strike between deregulation and positive and protective legislation. I believe that the Government’s challenge is to sift through the deluge of regulation that we inherited.

Some hon. Members may know that I have recently been vocal about the tobacco display ban. To recap, that legislation was brought in without the benefit of a small business impact assessment. The cost to the independent retail sector of implementing it is assessed at £33 million. Independent analysis shows that in countries where the ban is implemented small shops are disproportionately affected and there is no health benefit. Indeed, it is estimated that 2,600 small shops may close as a result of that legislation alone. At the moment the Government do not have any plans to carry out an evaluation of its impact. Overturning that inherited legislation is but one example of the right and appropriate path of deregulation needed to protect our independent retailers. If we do not do so, our nation of shopkeepers will become a nation of clone towns, with local shop models of supermarkets replacing the traditional British independent offering. The Government are currently reviewing the legislation and I urge all hon. Members to speak to the Secretaries of State for Business, Innovation and Skills and for Health and to register opposition to that over-burdensome, soundbite regulation.

As late as July this year the London assembly added its voice to the many expressing concern for the sector in its report, “Cornered Shops”. The report indicates that 7,000 independent shops shut in the last 10 years alone—or 13 a week. That marks a long-term decline, exacerbated by the recent economic crisis and punctuated now by a continuing lack of access to credit, which we have heard about today. We all recognise the frustration at the fact that, after the bail-out of irresponsible bankers, those bankers are not doing their bit to lend to small businesses and kick-start the economy. Something needs to be done to ensure that access to credit is made simpler for independent and viable retail offerings—and quickly.

We have seen the rise of supermarkets in the past 10 years, and there has been an aggressive expansion in the past few years into the local stores format. Our planning law needs to recognise and cauterise that practice, which is slowly bleeding out our independent high streets. Planning law needs a sustainability test, under which multiple chains would need to demonstrate that any proposed application would not adversely alter the mix of small, medium and large stores on high streets. Supermarkets account for a massive 75% of the market and 80% of independent retailers say that multiples are the single biggest threat to their livelihoods. I certainly do not advocate getting rid of supermarkets and propping up failing independent retailers for the sake of it: both have their place in a healthy and modern economic mix; they are not mutually exclusive.

Although this is by no means atypical of the operating experience of all independent retail sectors, I shall give just one example of how the scales are tipped against newsagents. The National Federation of Retail Newsagents, and newsagents in my constituency, have told me that one of their biggest problems is the lack of control that they have in the newspaper supply chain versus supermarkets’ buying power. We need to protect our independent high streets, which are far more vulnerable than the multiple retailer end of the sector. Once they are gone, they are gone for good, as are the friendly face of our local independent retailer and the heart of our community.

I recently went to the ceremony for the independent achievers awards, which celebrated best practice in the sector. The energy in the room was electric with the buzz of the best independent, innovative retailers regaling one another with stories of how they had adapted to support their local communities and build up successful businesses. That is the sense of pride and enthusiasm that we need to regain.

Our independent retailers work long hours, seven days a week, all year round, only to combat increasing costs, aggressive competition from multiple retailers, decreasing profits, increasing bureaucracy and decreasing access to credit. We need to reinvigorate the small business sector with a package of measures. Scrapping the tobacco display ban would be a good start.

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[Justin Tomlinson (North Swindon) (Con)]

Thank you, Mr Weir; I will be on time.

I congratulate my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) on securing this excellent debate. It has captured the interest of so many hon. Members both because of the subject and because of his engaging delivery.

I am a big fan of small shops, for a number of reasons. First, I am the vice-chair of the all-party group on small shops and I am a member of the all-party retail group. I also come from a family of small business shop owners. I have many happy memories of growing up in the back of my parents’ wool shop, which was very handy in these colder days.

[Chris Ruane]

He didn’t want for a scarf.

[Justin Tomlinson]

That is right. As has been said, small shops provide diversity but also character and interest to the high street. My local authority, Swindon, is embarking on trying to secure significant town-centre regeneration but, ever mindful that we will always be competing with Oxford, Bristol, Reading and Bath, we need something that sets us apart from those other towns as potential shoppers head down the M4 and choose which ones to go to. Through small independent retailers, we can have that unique offering.

I shall start by being positive. A recent BBC TV programme was called “Mary Queen of Shops”. I am a big supporter of the idea that she put forward, which was that it is not all doom and gloom and that many retailers need to embrace changing customer expectations. I shall use just two quick examples, one of which was a struggling greengrocer’s that was very quiet in the daytime. She encouraged the people at that greengrocer’s to go out and get orders for delivering vegetables to people’s doors. In the daytime, when they were quiet, they could pack those boxes, and that increased their income significantly. The other example came from an area in the south-west that was a tourist attraction—I forget the name of the place—where there was a struggling convenience store. She had the store redesigned so that it became more old-fashioned, to buy into the tourism aspects of the area, and encouraged it to promote local produce, which had a story, and to have events inside the store. Again, that increased business.

There is a part that retail has to play; it is not just the Government and local authorities that have to act. However, there are other challenges. Many hon. Members have mentioned the banks. I get very cross when banks say to me that they are doing their bit; they have signed up lots of customer relationship managers. In my experience, they do not have the relevant business experience and they still rely on the computer, which all too often says no.

I support the comments that many hon. Members made about rates. In other debates, I have urged us to ensure that there is some flexibility in the rates system. We have so much spare capacity with empty shops and, using the rates system, we can help to attract the next generation of small retailers. That would not only tackle ghost high streets but create new employment opportunities, and surely a small rates contribution is greater than none at all.

I agree with many of the comments on parking. I am delighted that my local authority has cut parking charges and seen footfall and income increase, although I have just one proviso before we bash all local authorities. There was a lot of emphasis by the previous Government on encouraging green travel, which, perversely, encouraged councils to make it harder for people to park in their town centres.

Finally—because I am conscious of the time—I echo the support for the Conservative small shops commission, chaired by my hon. Friend the Member for Northampton South (Mr Binley), who has now left the debate. We should embrace and deliver the thrust of that, to restore pride and life to our high streets.